Budgets and Diets Are a Waste of Time – Redux!

by Krantcents · 73 comments

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Budgets and diets are a waste of time!  Most, if not all personal finance (PF) bloggers are probably surprised I would say that.  A budget or diet is not the answer for overspending or overeating.   If these things worked for everyone, there would be no debt or overweight people.  A budget or diet is intended to help us reach a financial or personal goal.  Do budgets or diets even work?

I spent my entire career preparing budgets, five (5) year plans, strategic and business plans.  After thirty (30) plus years of planning, it is probably odd that I am saying budgets are a waste of time.  Am I suggesting to just live without a budget?  Not exactly, keep reading!  Most people know nothing about budgets and just blindly put one together and expect some magical solution to their overspending.  That won’t happen!

Budgets are a structure for your financial goals

Most PF bloggers suggest to use a budget to manage your money.  A budget is a structure to help you achieve your financial goals.  A budget is the result of planning your financial goals.  How much time do you spend planning your financial goals?  This is the most important part of planning.  It is the motivation to help you through the tough times when things do not go exactly the way you would like.  It is the difference between success and failure!

The more thought you put into the planning process, the more likely you will be successful.  Where do you start?  I often see worksheets online as a template for budgets.  You could certainly just fill it out and see if you have a surplus or loss after you pay your bills.  If you are happy with the results, you have a budget or do you?  Have you thought about any of expenses?  Are you making the best use of your money?  For example, you could spend too much in rent or for your mortgage.

How to make a more effective spending plan

Are you able to check off all the boxes?  Are you saving for retirement and emergencies?  Too often, we get caught up in the day to day kinds of things versus what we should think about for the long run.  This is just some of the issues you need to think about in that planning process.  See, it is not enough to just fill in the blanks with your rent or mortgage payment.  You need to answer some questions about your rent or mortgage payment.  Can you reduce the amount you pay for housing?

Can you refinance your mortgage and reduce your payment?  Let’s say you can shave off a hundred dollars, what do you do with the savings?  Do you add to retirement savings, repay debt or what?  There are a lot of decisions which require some thought.  How do you know if your new payment is appropriate for you?  Should you move, downsize or take in a boarder.  There are even more questions that you should ask yourself before you ever take on a mortgage or rent an apartment.

Personal tangent!

When my daughter graduated college, she was on top of the world.  Her first job would not support her lifestyle.  She was lucky; she had me to counsel what to do.  She moved home after graduation to save for the move in costs of an apartment.  As luck would have it, she took over her grandmother’s apartment when she moved into assisted living.  Her “rent” was the equivalent of one week’s wages!  When her brother graduated college three (3) years later, he shared in the cost of the apartment.  Keeping their expenses low made it very easy to save money for retirement and savings in general.

More planning and questions!

The budgeting process starts with lots of questions, many of them about what you spend your money on versus just recording them.  Whether you earn minimum wage or millions of dollars a year, the only difference is the magnitude of the expense.  Budgets and diets have one significant thing in common.  You cannot live without money or food!  Taking the time to analyze your spending will yield much more than you realize.  Analyzing your eating will do the same.

Many diet books or programs ask you to record the foods you eat every day.  It is supposed to make you aware of your eating habits.  Taking the time to think about what you eat is as important as how you spend your money.  I used my planning approach with weight loss when I lost thirty-five (35) to forty (40) pounds thirty-four (34) years ago.  I thought about what I ate that caused me to gain weight.

Another personal tangent

I went through the holiday season of 1977-78 and gained about fifteen (15) pounds.  My cause was eating candy bars at 3 PM and overeating at dinner because of stress.  You see, I love desserts or sweets!  Both of which was plentiful during the holiday season.  Add in some stress at work and I was out of control.  I tried diets before and they worked for a short time and I went back to my old habits.  My solution was more pragmatic.  I replaced my bad choices with better choices.

Not that different from budgeting!  I brought more fruits and vegetables to work to replace the bad foods.  In roughly ten (10) to twelve (12) weeks, I not only lost fifteen (15) pounds, but it went so well that I lost close to twenty-five (25) additional pounds.  I surprised myself with success and it motivated me to raise my goal.  This success encouraged me to start an exercise program and I have kept the weight off for all these years.

Find your own solution!

My approach to budgets or diets is different than most!  Just blindly following a budget or diet does not work!  It doesn’t work because it is artificial or some cases it can be extreme.  There is never one solution for anything and trying to use one size fits all  solution will not work!  The only way to make it your own is putting in the time planning and thinking about your choices before you make them.

I would never suggest my “diet” or “budget”, however I would advocate my approach of planning and developing your own solution.  Not only will you make it your own, it will become your motivation to help you through those rough times.  Budgeting is not just tracking your expenses and a diet is not right for everyone.  Planning is taking a deeper look at your expenses and eating habits before you start tracking either.  Traditional budgets and diets are a waste of time!

Photo by:  sunshinecity


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My Financial Independence Journey January 29, 2013 at 2:38 am

Budgeting is a process for me. I started with my expenses and then built a budget off of that. I quickly realized that it wasn’t a very good budget and so I started modifying it. As I got a better handle on my expenses I began setting targets. Could I reduce this expense or eliminate that one. It’s always been a give and take between what’s really happening with my money and what I would like to happen.

But in the end if I wasn’t measuring my income and expenses and making plans, I wouldn’t be able to push a 50% savings rate. It’s just too easy to overspend.

Krantcents January 29, 2013 at 6:57 am

It is the process of assessing whether you need an something or should you spend the money elsewhere. Most people just fill in the form and do not give much thought to the process.

Holly@ClubThrifty January 29, 2013 at 4:27 am

We are budget lovers but we just do what works for us. We write our budget on the 1st of the month and include anything that needs to go into it in addition to bills. Then we determine what we can save or prepay our mortgage with and we do it. When we didn’t have a budget, we just spent all of our additional money!

You’re right. Dieting doesn’t work. Only changing your lifestyle does. I used to struggle to stay thin when I was younger but now I don’t have to since I changed my lifestyle.

Krantcents January 29, 2013 at 6:59 am

Sounds like you are on the right track, but your budget should really be done n an annual basis. You can always adjust periodically.

Michelle January 29, 2013 at 5:27 am

We make a budget but don’t keep track of it. I’m more of a cash flow type of person.

Krantcents January 29, 2013 at 6:59 am

Cash flow is another form of a budget, but you should review your expenses to see if you can lower them.

Tb at BluecollarWorkman January 29, 2013 at 5:41 am

Agree. Blindly following some budget or diet made up by some dude online or some chick’s book is dumb. You have to sit down and figure out what’ll really work for you. And it’ll fail a lot. Yep. Lots of failure. But without that failure, you won’t figure out what works best for you! Let me try A, oh A failed. Okay, then let me try B, oh B failed. Okay, then let me try C, oh C failed. Okay, then let me try D, oh hey, D kinda worked. Let’s see if I add in E. You get the point. I think people get discouraged when they try something and it fails. But they shoudl really see the failure as a success becuase they’ve X’d one thing off their list of things to try! And if they sit down and really look at numbers, the amount that they try and fail shoudl go down becuase they’re not doing it so blindly!

Krantcents January 29, 2013 at 7:02 am

Yes, successful people keep trying. You are probably learning a lot from making changes. I do a mini analysis on my expenses every time I pay the bills.

Grayson @ Debt Roundup January 29, 2013 at 8:34 am

I used a basic budget in order to notice my trends. Then I looked a spending trends to see where my money was going. I keep a very rough budget now, but I have my money under control and can keep on top of my trends. If you have never had a budget, then I would recommend one, but there are many that don’t need or follow a budget because it does nothing for them. You have to follow your spending trends.

Krantcents January 29, 2013 at 10:18 am

Watching your spending trends is important, but only if you make changes. In addition, you want to see if the level you sue as a baseline is right for you.

Kathleen, Frugal Portland January 29, 2013 at 8:38 am

I couldn’t agree more! It might just be semantics, but people want to cheat on their budgets and their diets.

Krantcents January 29, 2013 at 10:19 am

It isn’t so much cheating as resisting change. It is hard to change and there are lots of things that keep us from reaching our goals. Change is just one of them.

Bucksprout January 29, 2013 at 8:47 am

Replacing bad choices with good choices is a simple and brilliant idea. Unfortunately I think most people who manage their money poorly cannot recognize a bad choice vs a good choice.

Krantcents January 29, 2013 at 10:21 am

Very true! If you take a good look at your spending, you will recognize you do not need to make all those choices. Starting is the first step to success!

jefferson @SeeDebtRun January 29, 2013 at 9:03 am

i think that budgets are certainly useful.. many folks who are having financial issues have no idea where their money is truly going, and seeing the numbers spelled out clearly in a spreadsheet can be enlightening..

Krantcents January 29, 2013 at 10:22 am

That is why a log of your spending or eating helps you identify the problem. A budget may or may not do any more unless you really dig into the numbers.

Money Beagle January 29, 2013 at 9:12 am

I think budgets can be a useful tool but it’s just that: a tool. A budget alone isn’t going to save someone’s financial world from crumbling down, but in concert with good spending and saving habits, can work as a tool to create financial stability.

Krantcents January 29, 2013 at 10:24 am

I agree that it can be useful if it helps you dig deeper into finances, but it is not a panacea for financial irresponsibility.

Brick By Brick Investing | Marvin January 29, 2013 at 9:24 am

I think both can be very useful but the very first thing you have to obtain is the will to stick with them. I have seen the best budgets and diets fail because the person implementing them didn’t have what it takes to stick with it.

Krantcents January 29, 2013 at 10:28 am

Any goal is just a wish if there is no plan or discipline to succeed. I think it helps to make the goal very important. Everyone succeeds at something and they found their motivation somewhere. Good health and finances should be an important goal.

The First Million is the Hardest January 29, 2013 at 9:37 am

I agree with Marvin, neither one will work if you don’t stick with them. I think people place a lot of emphasis on budgeting because the first step most people need to take in order to improve their financial lives is to pay attention! It alone wont solve the problems, but it’s important to the overall process.

Krantcents January 29, 2013 at 10:31 am

I have often said that a budget is a structure to achieve your financial goals, but it is more than just filling out a form. Like goals, you need to monitor your progress and adjust your efforts. You also need to take a good look at the numbers to see if they are appropriate. Discipline is important too, but so is motivation.

John S @ Frugal Rules January 29, 2013 at 10:03 am

I could not agree more! I love to budget and go over it annually to ascertain if any adjustments need to be made, that said it’s a tool. This tool is one that needs to be personal and one that is moving you towards something. I think many of the times why budgets fail is because they’re not made personal and no planning is going into it. It requires a level of work/thought to determine what’s important to you and developing a plan to get you there.

Krantcents January 29, 2013 at 10:33 am

All of your words also describe goals too. After all a budget is a method to reach your goals. I suggest that everyone digs deeper into the numbers to really manage your money not just fill out the form.

Joe Saul-Sehy January 29, 2013 at 2:46 pm

You nailed it, KC. The communication and thought in a budget is the catalyst, as is the relationship with food in any “diet” change.

Krantcents January 29, 2013 at 5:20 pm

Thank you, going through the motions of budgeting or dieting does not work. You have to take a look at the expense if it is necessary or can it be reduced.

Glen @ Monster Piggy Bank January 30, 2013 at 3:44 am

I agree and disagree with this post.
First off I love our budget and there is no way we would be as far advanced on our mortgage without our rigorous budgeting.

But I also understand that a budget isn’t for everyone and that blindly following a budget can lead to problems.

A budget needs to evolve with you and always needs to be accompanied with diligent tracking of your expenses.

Krantcents January 30, 2013 at 6:54 am

I am glad your budget is working for you. Budgeting is more than filling out a form, it requires a great deal of thought in the preparation to determine what is necessary and what is not.

Jules@Fat Guy,Skinny Wallet January 30, 2013 at 7:16 am

We have to do what works for us. I know that on my weight loss journey, people are always critiquing me. I am doing what is best for me. I am always very conscious when it comes to talking to others about their journey, because it is theirs! Budgets definitely are the same way!

Krantcents January 30, 2013 at 7:39 am

Funny, how everyone has an opinion whether weight loss or something else. Change is difficult enough without criticism, find some supportive people and stay away from the critics.

John@MoneyPrinciple January 30, 2013 at 3:52 pm

There is a lot of similarity between diets and budgets – both are flawed because the real trick is to eat and exercise healthily and know how to spend. Frugality is like bulimia – dangerous for all. Life is for enjoying if at all possible – too many people in the world of course don’t have that luxury but that doesn’t make it wrong, we need to enable them via innovation and good planning.

Krantcents January 30, 2013 at 4:22 pm

Although I keep a low profile lifestyle, I never feel deprived. I travel, enjoy time with family and friends and spend judiciously.

Kim@Eyesonthedollar January 30, 2013 at 6:05 pm

I saw the title and it almost broke my heart until I read on. What you say is absolutely true. I used to try and stop our spending by saying, we’re going on a budget. We lasted about two weeks then we’d go reward ourselves for going two weeks without buying something. Just like going on a deprivation diet and then pigging out when you can’t stand it anymore. You have to change your lifestyle before either will work.

Krantcents January 30, 2013 at 8:48 pm

Extremes never work whether budgeting or dieting. A little planning goes along way to creating a personal framework to reach your financial goals. Question every expense whether you need it or not and what level is reasonable. Nothing should just be accepted!

Tony@YouOnlyDoThisOnce January 31, 2013 at 3:25 pm

Pretty bold post, man! But I appreciate the point of view. Bottom line is you need to execute!!

Krantcents January 31, 2013 at 5:43 pm

I like to be provocative! It has been on my mind for a while and the article about college coaches stimulated writing it. As a former CFO, I look for trends in business, investments and life in general. I saw my numbers sliding and I needed to do something.

Sarah Park February 3, 2013 at 12:54 am

Budgeting is very essential for me in order to taste success. In business, we are here to earn money and not to waste one. Budgeting is a good system in order for us to maximize every penny we have.

Krantcents February 3, 2013 at 8:05 am

In business, it is a formal process mainly because they are employees . Without a budget, it would be very difficult to keep everyone on the same page. I question budgets for individuals (or couples) unless they really dig into the numbers and raise enough questions to really analyze the situation. Just going through the motions or filling out a form is never enough to make a good budget.

Integrator February 4, 2013 at 4:33 pm

I think one of the key aspects that people that don’t realize is the tracking, monitoring and follow up to the budget. A budget is not some static plan that gets done once and gets filed away. If you can’t track and modify based on your progress its useless . It should be a living document.

Like you I’ve done a lot of strategic planning in my professional life. The whole point of these things is to track your progress against these tools. Not to do it once and forget it.

Krantcents February 4, 2013 at 5:33 pm

I think there is 2 parts to the budgeting process. First you really need to dig into the numbers and make sure you understand them before you start setting goals. Next, you need to monitor your progress and adjust your efforts to reach your goals.

Thomas S. Moore February 7, 2013 at 11:42 am

Nice I really like this post. I agree that people just kind of refuse change and in some cases just don’t know any better. If you never really saw a good budget how would you know you are doing the right thing. Sadly more people around you are going to tell you to spend money on a car or get that expensive apartment. Few will be willing to move home or take the bus. For some they think budgeting is being able to do everything they WANT. They forget about 401k, savings, retirement, college etc. instead its about budgeting to buy clothing, go out to eat have fun. I guess you can say the budget to spend all of their money.

Krantcents February 7, 2013 at 12:57 pm

Thanks, the best budget is what helps you reach your financial goals. Could a better budget achieve more? Absolutely, but maybe you would not follow it. I usually start with the outcome or goal and work backwards. Very similar to weight loss. You want to loss 15 lbs. in 8 weeks, so you would lose 1.5 to 2 lbs. a week.

Cat February 11, 2013 at 9:57 am

I like how you changed from the “budgets and diets are a waste of time” to “traditional budgets and diets are a waste of time” as the post went on.

Nothing you want to do and work at to grow is a waste of time. Trying a new budget and not saving enough money was not a waste of time. It was a step in the right direction to recognizing your faults and your room for improvement.

I don’t diet. I live a healthy lifestyle. When people ask me why I am only eating vegetables or why I choose water at dinner, the answer is that it is my lifestyle choice.

Trying budgets, and trying diets, is what led to my lifestyle choices. I failed many times before, but I always get back up and start again. I made an emergency fund, thank you Dave Ramsey, and then I spent it all and didn’t know how to start again. Little by little it built itself up.

I’m glad that you don’t try and put your plans on other people, and you recognize that they must make plans that are more suitable to their individual personalities.

Krantcents February 11, 2013 at 4:24 pm

Thanks, I use titles to be provocative or to get your attention. I do believe that budgets or diets are never the answer. Understanding what got you into trouble and what will get you out of trouble is far more important. The actual structure to help you achieve your financial goals can be a lot of things. My approach is different, I make savings a priority and live on what is left. I control my spending and watch my expenses like a hawk. It works for me because I have many years of doing this.

Rob @FinancialSprout February 14, 2013 at 7:42 pm

I think that planning is the key to success. If you know what your situation is, you’re in better shape than most others. It’s always a good idea to budget, just so you are cautious of your financial situation.

Krantcents February 15, 2013 at 6:57 am

As a lifelong planner, I always plan, but a budget is just a framework for you unless you dig into the numbers. I believe in really analyzing the numbers and look for alternatives for some expenses.

Kylie Ofiu March 13, 2014 at 2:33 am

I hate diets. I believe in lifestyle changes, not following some sort of diet specifically. For a ‘diet’ or new healthy eating plan to work it needs to be flexible and a change of mindset. A diet is an eating plan that has an end, which is when most people revert back to their poor eating habits.

I think budgets are a useful tool, but I agree they are similar. I think a plan for your money, having financial goals and working towards them are more important and help more than just focusing on the budget. The budget works with your goals, but it only works if you are dedicated to it.

Krantcents March 13, 2014 at 6:57 am

Diets and budgets are similar! It is up to the individual to make them successful or not. I tend to make a spending plan and replace some bad eating habits.

Peter March 13, 2014 at 8:57 pm

As much as I’m an advocate for budgeting, I still haven’t found a way that works for me. For me, I just don’t spend as much as I possible like I’m on this constant spending fast. I have fixed cost for stuff and I just live by the minimalist philosophy.

Krantcents March 14, 2014 at 6:58 am

I start with the goal! It is how much I want to save and work backwards. It is a matter of choices and how much I can reduce my expenses.

Ryan @ Impersonal Finance March 14, 2014 at 7:52 am

I totally agree that budgeting and dieting can be a waste of time for those with their finances under control/on automation and what not. But, I think if someone is starting out, deep in debt, and with no idea of how to control their habits, the budget is a very useful tool to show them where their money needs to be directed. They, as you said, are a useful tool in structuring your finances. A lot of people could use structure.

Krantcents March 14, 2014 at 4:04 pm

I am not opposed to structure, it has been a huge part of my success. Most people budget all wrong! I am suggesting to really analyze your expenses, just don’t accept that it is right or necessary. Question everything including your spending!

Jamie @ Degree Source March 14, 2014 at 10:07 am

Thanks a lot for this very helpful article! It’s definitely filled with wonderful insights that made me rethink how I budget my money. It will surely help many people discover their own unique methods of budgeting that will work best for them.

I believe budgeting is essential, but doesn’t come in a “one size fits all” process or system. We should certainly work out the best one for us if we want to manage our finances well and be able to save up and grow our investments. Furthermore, we should make sure to have enough funds in the future to cover our retirement and children’s educational expenses.

By the way, I did get some good tips for dieting here. Hehe. And it motivated me to reach my weight goal and financial goals at the same time. Thanks again!

Krantcents March 14, 2014 at 4:06 pm

You’re welcome! I made a career of budgeting. Most people do not do what is really necessary for a good budget. They just jot down their expenses and never question whether the expense is necessary or appropriate. You need to analyze your expenses and do something about it.

Tie the Money Knot March 17, 2014 at 9:24 am

I think that creating good habits and setting up systems for success is a great way to go. Now, this might entail budgets and diets at the outset to get us started and moving in the right direction. Longer-term, being able to simply make the right decisions without the “overhead” of excess tracking time and effort would be preferable.

Krantcents March 17, 2014 at 3:59 pm

I agree and it is all about your choices. It always gets down to your choices and which ones you make will help you succeed vs. fail.

My Money Design March 17, 2014 at 6:40 pm

I’ve got to agree that budgets should be more like guidelines and less something you stress over. That philosophy has worked great for both my money and my health.

Krantcents March 18, 2014 at 7:02 am

A budget is supposed to be a structure to help you achieve your financial goals. I use some of the elements in a spending plan.

Taylor April 13, 2014 at 7:53 am

You read my mind. I did try budgeting, but I would just get SUPER depressed when I was over on any line item. Now, I guess I have a reverse budget I concentrate on putting predetermined amount of money towards my long term goals first each month ei savings and debt. Then after I’ve satisfied those goals I live on the rest.

Krantcents April 13, 2014 at 10:06 am

That should work fine! I make saving a priority and have it automatically deducted from my paycheck and live on the rest.

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