Why "Finance Experts" Keep Saying Budgets Don't Work
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- เผยแพร่เมื่อ 20 ก.ย. 2024
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There’s a word for people who think budgeting doesn’t work-and that word is “wrong.” But in this video, we’ll hear what some of those people have to say about budgeting and set the record straight on why you need a budget.
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Thanks for the shout out George. I would love to cook your favorite food for you.
Hi money mom! We love you
@@M_SC George is a tool and a loser... What a disgrace... He needs to back to daddy Dave...
"Budgets don't work. You should write down where you spend your money and adjust it so it reflects your values instead."😂
shaking my head* 🤦♂
Tracking the spending is the most important part.... Someday, she may understand this.
It’s not a budget, it’s a spending plan 😉
These people make me laugh. Years from now I hope they look back and see how silly they used to be.
They’re talking about the difference between saying “this is how much my essentials cost, this how much I’m going to save/invest, and the rest I can spend however I want” vs saying “I’m going to spend $X on groceries this month, $Y on clothes, $Z on hobbies, etc etc.” and budgeting out every possible spending category.
My budget is the reason I could save for an engagement ring, down payment on a house, a new car, and invest towards retirement consistently. Truly would’ve been lost without it.
A zero based budget literally changed my relationship with money so that I don’t have to justify large spends anymore, because I have already allocated money to them via the budget.
What got you to this point. It's the biggest hurdle I have when talking to people about a budget?
Everyone on here rebranding “Budget” lmao 😂
Ramit charges his clients and asks for people to spend 20$ on a book that just relabels "budget" as "money plan/CSP".. He is the biggest hypocrite in the industry. Shameless.
Budget, Conscious Spending Plan, Mindful Disbursement Blueprint, call it what you want.
I don't like budget. It's never worked for me and it never will. Instead, I prefer to write down what I'm going to be spending for the next month to see where my money is going.
This is much more effective than budgeting. This is the hack Dave doesn’t want you to know. He’s been suppressing this for decades.
You cracked to code
Same thing... 🤔
I like it, but what shall we call this plan for spending money? I wish there was a word for this spending plan...
🤯 I wonder if George ever considered this.
I mean damn if you don’t like the word “budget”, replace it with “money plan”. Idk..at the end of the day it’s beneficial to know where your money is going!
Ramit’s CSP is a budget, he just refuses to admit it
if it works for people, does it matter??
He just charges too much to offer just a budget 🤣🤣🤣
I like Ramit, but his CSP is just a rebranding of the 50/30/20 budget. It’s not “budgeting” because his percentages are flexible, 50-60/20-35/20-25. lol
Ramit is a hypocrite. his whole book is just copying and pasting what other people have been saying for 10+ years.
@@mart1n10601 he wrote the book over 10 years ago, so he wasn't copying and pasting what people hadn't said yet.
Bro how are they all buying XAI550P quickly
If rest is going down then XAI550P is somehow going up
Elon knew the XAI550P idea and the key changes coming with it, better be prepared for a large run
For the next bullrun and yes that's still out there, XAI550P gonna be the main horse
I think the key points in most of these videos are:
- don't spend too much time budgeting
- automate high priority buckets like savings
- look back at your expenses and remove the low priority ones from your budget
Been collecting the XAI550P this cycle as that has the right place in this time
How is XAI550P better than anything else right now?
The XAI550P uses different AI which has not been used by anyone, it makes sense and it should allow steady growth with no human interference needed
If it sounds like a new graphics card model, it's a scam!
Please do a collab with Ramit! I'd love to watch that episode. Ramit teaches budgeting, just doesn't calls it a "Concious Spending Plan" lol
This is like my toddler who hates Mac and cheese, but loves it when I give her “pasta with cheese sauce”😂 It’s a budget no matter what you call it.
Instead of a budget we use a spending plan. That's a budget!!! These people are deluded. Of course each month will be different. That's why you BUDGET ahead of time. I have a spreadsheet that is extended out one year in advance so I know what is going to happen each month. I allow for irregular expenses, I overestimate my expenses, I underestimate income and this is AFTER my automatic 25% 401k contribution. I have no idea what these people are thinking.
They are trying to be 'innovative' for content.
It was stupid of me to sell $76,000 worth of NVDA stocks without reinvesting. (Buying bonds or CDs is not for me). I’d rather stay 100% cash, or are there any other stocks that can 10x in 6 months? I have 180k ready to be reinvested..
I completely agree. It's not just about the dividends or profits, Diversifying a portfolio can be a smart move and i always advise one gets a professional to help out.
I’m currently working towards FIRE with a focus on dividends & growth investing. Since 2014, I’ve built a portfolio made up of 30% NVDA, 25% SCHD, 15% VOO and over 30% in digital assets, thanks to my CFA. This strategy has helped me earn $49,000 a year in dividends. Back in 2014, I only earned $21 in dividends.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Searched the web and saw her profile and accreditations, someone with great experience I must say, thanks!
It's disappointing to think anyone falls for these obvious scams...
Hit 250k today.Appreciate you for all the knowledge and nuggets you had thrown my way over the last months. Started with 24k in April 2024…
I would really love to know how much work you did put in to get to this stage
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear that you saved me from huge financial debt with just a small Investment, thank you Alesia Haas you're such a life saver
As a beginner in this, it’s essential for you to have a mentor to keep you accountable.
Alesia Haas is also my trade analyst, she has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.
Same, I operate a wide- range of Investments with help from My Financial Adviser. My advice is to get a professional who will help you, plan and enhance your management skills. For the record, working with Alesia Haas, has been an amazing experience.
I'm favoured, $30K every week! I can now give back to the locals in my community and also support God's work and the church. God bless America,, all thanks to this same Alesia Haas.
HAHA .. George is right. They're really all just telling you not to do a budget, but to do a budget instead.
My own method for budgeting is kinda intense. I budget the normal way and then reverse budget to make sure my numbers align every month. On my reverse budget, I pretty much sort those purchases into categories so I know where I'm spending so that I know exactly how much I'm spending on each category so I can make adjustments as needed. Also, with my credit card I never autopay. I always like to manually pay so I stare the number in the face and realize how much I spent.
Seriously, every "budgets don't work" guru then turns around and tells people to create a budget by another name. 😂 It's just a psychological trick to get you to pay attention to your money without technically calling it a budget. So they tell you what you want to hear, "you don't need a budget" and then get you to do one without knowing it. Brilliant if you think about it. 🤣
Even though I agree that it is a rebrand of budgeting my pushback is when we talk about it’s behavioral, if calling it money dials or automating your money makes people pay off debts and have a plan, I’m not mad at it. Forget semantics, let’s succeed with money
I think the 'problem' exists where the influencers are trying to make it sound like it's not a budget. It would be better to not call it anything...they are just trying to put their own wording on 'budget' and make it seem like it's new and innovative. You either budget, or you don't.
If they said 'budgets work, but the mindset is really what determines if you stick to it' then it would be more honest that it's the same thing. Don't just change the name, cause then the mindset doesn't change and eventually the person will get tired of doing the 'new named' budget.
@@megan2478I mean, I think there really is a space where you can be good with money without creating a budget. Neither me nor my parents have had a strict month to month budget. We’re all living decently enough without major debt on relatively modest means. The thing about a budget is that it requires a particular behavioral temperament to stick to. But if you just naturally have a conservative and conscientious temperament about money, you don’t always need the budget. You start with an ultra conservative spending position, see how much you have left at the end of the month, and viola, you know how much per month you can deviate from the conservative position. From there, you just kind of sense when you’re spending too much based on how much you deviate from a spending pattern you already know works.
So for example, I don’t make any special effort to track how much I spend a month on groceries. I just shop deals, buy bulk where sensible, aim for the cheapest version of the things I like and throw as little away as possible. The only math I need is the math I do in the store to make sure my dollar is going its farthest. But my grocery budget is easily limited by my appetite. I could have room for $200 more in “the budget” and it wouldn’t really matter because I simply don’t need it.
I gauge how well I’m doing by whether I’m reliably putting $300-400 in savings a month. If I miss a month, I need to know the reason. Usually the reason is car insurance renewed, or some other one time expense. Just by having the general expectation of saving $400 a month, I know that I can’t alter my spending behavior by more than that multiple months in a row. I’m a creature of habit and I don’t spend by accident. My spending is consistent not because I track it, but because *I* am a consistent person. Everything I don’t normally buy is immediately noticeable and measured against my expected savings. Everything I normally buy is some unknown number that leaves $400/month in my pocket.
A budget is meant to constrain your desire to spend. You only need to track categories of expense when your natural behavior causes your spending to outweigh your hoarding. But there *are* people who do not feel this strong innate desire to spend. Whose behavior rarely exceeds their income to begin with. For us, correcting for a sudden large expense is as simple as cutting back on everything at once, and then branching out again once we see the increased savings our retreat resulted in.
Awesome shoutout to Dawn at Centsible Living With Money Mom! She's a very kind woman with great advice on a great channel. Glad you gave her some exposure here and were very kind to her even though you disagree a little bit. Love the snow globes!!
I love her too!!! She has such great advice!
If Caleb and George can come together and find common ground, I wanna see Ramit and George give it a try..... maybe bring in Dave! haha
Ramit says budgets are dumb but tell people to make a "conscience spending plan" instead. To me tho, a budget is a budget no matter what fancy name you want to call it 😂
The best plan is the one that you actually follow. Budgeting does work if you follow your budget and adjust when necessary. Budgeting doesn't work if you're inflexible and/or don't follow your budget.
I learned about Ramsey in 2019 and budgeting changed my life!! In 5 years, I was able to pay off all of my debt, build up my savings, and put my dollars toward my priorities instead of wondering why I was broke every month. 10/10 - would recommend budgeting LOL.
Yes!! A friend of mine told me about DR back in 2016 when I was complaining that I had paid $50k in interest on my student loans!
At the time I was in debt around 400k total between mortgage, student loans, credit cards and car payments, with a take home income of around 80-90k.
I went full gazelle intense and rice/beans and within 6 years I had everything paid off and net worth millionaire within 8 years!
One of the key activities in budgeting is a 'post-mortem analysis' of what you actually spent last month and the 'holy crap' moments when you realize how much you waste on eating out, take out, food deliveries, Amazon Prime stuff, streaming, or your favorite weakness.
I'm glad you were gentle with money mom Dawn - she is adorable and doing the best she can ❤
Exactly
Don't be afraid of the word budget
I never called my money spending strategy a budget. I always considered it tracking every purchase in a spreadsheet and I couldn't be bothered. I always had and refined what started as 401k match employer, throw 1k into savings/month, underspend as much as I can, and if i had ~2 months of spending in my checking, i grab a chunk and move it to savings. And if that number is say 5k, if i drop under 5k, I would just say last month me was a jerk, now I gotta spend less this month. Now its basically the same, but I have more refined values, especially for fixed costs, and consciously invest excess. What I want to work on now is keeping another savings account, separate from efund, for "big unnecessary purchases" i.e kitchen renovation
I managed to retire early without ever using a budget. Pay yourself first is the only rule I used. Automatically divert 25% of your pay to saving / investing. Then you can freely spend the money in your check account each month. Don't take on debt other than a mortgage. QED.
It's a minimalist approach to budgeting but that's still the same principle. A bit more details could have opened more opportunities and more organization but for people who are very reluctant to track all their expenses, that can help.
the idea that budgets feel restrictive probably means that folks are being too specific with their tracking, planning, w/e you want to call it. At the minimum, specifically track your required expenses (housing, utilities, debt payments, etc). After those things are taken care of, see what is left. If slicing up that leftover amount feels too restrictive, just stop slicing it up so much and be free to spend it as you see fit (or don't). Over-tracking can feel like a waste of time but not tracking at all gets you in trouble.
Budget is an expenditure plan, it works as a "reference" (a tool) for managing your resources (including money); you have to print your needs, dreams and context on this, and adjust it during your life.
I love how many people are like "Budgets are the *worst*! Do this instead" and then describe a budget.
People just don't understand what a budget is.
Instead of keeping a budget, I find a reason to enjoy saving, and the natural result is I save a lot. It’s similar to finding a physical activity you enjoy and automatically getting the recommended amount of exercise. I enjoy saving because it gives me incremental freedom to spend more time with loved ones without worrying about earning more or spending less money.
Budgets are fantastic! Not having money is not an income problem, it is more of a money management problem as 70% of people live paycheck to paycheck. I love you George!
This is what state of education in United States has resulted in. All of the people in these videos are "budgeting" yet doing everything to claim it's not budgeting.
Budget - "an estimate of income and expenditure for a set period of time"
Once I started my flexible zero-based biweekly budget which includes some items that are automated, I’ve been able to save as much as 33.9%-41.38% in each pay period and 73.81% for two pay periods towards my HYSA. I’ve also maxed out my retirement contributions and have been able to also invest a little. Keeping a budget has certainly worked for ME! 🤑
I am a Certified Financial Counselor, and it is not the idea that "budgets" do not work it's the fact that people do not want to be held accountable for their spending habits. Putting the information in black and white is something most people cannot handle. I use a variation of the baby steps which I have adapted through many years, and it works great!
whats your variation of the baby steps?
@@thebestthingthatneverhappe6729 Getting at least the 401k match if offered is the first step, people might be in debt for 10-25 years and never get to investing, doing it up front with a match starts the snowball rolling, debt avalanche vs snowball always, paying off the house is debatable :)
You have a better chance of saving/having money with a budget than winging it.
As an avid 'YNAB 4 Budgeter' im glad George did this video.Having a plan for my money before spending is the best route people can take if they want financial security and peace of mind.
I've been budgeting for 5 years and it has honestly changed my life.
I cut out BS spending and have been able to pay off an extra $30,000 from my mortgage.
I do really like Ramit's advice but it is just weird that he refuses to admit his plan is a budget too.
No see you don't get it! It's a Conscious Spending Plan! Totally different!
Uh oh, Ramit on the thumbnail. Cue the “shots fired” meme.
George hitting us with a Jocko reference and the word tactical in quick succession is the new Chad George we need.
A budget is literally a spending plan. We talk about the budget and spending plan on projects at work. We talk about it when we’re planning vacations or buying a car. “What’s our budget?” I even talk about calorie budgets or time budgets. It’s literally just a planned way to spend finite resources.
People acting like a budget is a pair of shackles stopping you from doing something. The only thing a budget does is tell you where your money is going. Not where it HAS to go.
I EMPATHIZE with young people who watch these people. This is SABOTAGING the youngsters for failure.
I watch your videos with pleasure. Your videos are a real treat.🍅🥇🤟
Just a way to sell to people a budgeting program without calling it a budget. 😂
I want to say "I quit budgeting because it felt like a waste of time". The reality is that after about 3 years of pretty consistent month to month budgeting, I've comfortably lapsed into a negative budget with a sinking fund. This is actually pretty tight to the Ramit not-a-budget approach, as I understand it.
My budget takes various categories and sets a monthly “limit”. The goal is to continually be informed month over month on if you or over or under the budget in aggregate. Some months might be a little higher in use but others can be way lower. Goal is over the long term to be at or under for the year. Give yourself grace, life happens. Stay informed by your budget, have a plan, allow flexibility, and enjoy your successes.
Been successfully budgeting for 12 years so I find it very hard to believe that “budgets don’t work” 😂 Sometimes it’s people’s discipline that doesn’t work, not the budget 🤦🏻♀️
If you want to be financially free, you must control your money. That’s a budget!
The most important part of a budget is to add extra money to make it flexible
I've budgeted for decades, but it's a very simple approach. Everything that can be automated for bill payment is, payroll deductions for money into investments, emergency fund, etc. We know how much money we have left over for the non-automatable items such as groceries, discretionary spending, etc. That much money goes into the checking account and we manage our spend accordingly. If we blow too much money on holiday snow globes (we do, on rare occasion) we're going to be eating beans and weenies unless we have a cushion built up from prior months (we do).
Dawn is a lovely lady, we've watched her for years ❤ I feel like she's being taken out of context here a little, she emphasises PERSONAL Finance, how we all have finances that might look different but can work off Ramsey principles. I enjoyed this video (and your commitment to snowglobes) but wanted to clarify xx
I'll be the contrarian. I've never budgeted in my life. I also don't have anything automated. On average I invest/save 75-80% of my income. Should I start making a budget? Why?
George! I love your videos bro. So helpful, so dang funny. You're one of my top favorite TH-camrs :) Keep doing what you're doing! You're making the world better and helping people a ton. Blessings
Exactly - budgets don't work for the same reason diets don't work. Most people don't want to put in the effort.
And if you can make them simpler (easier) there's a bigger chance of them sticking.
Budgeting and automatic savings are powerful together.
My roommate who likes to blow all their money thinks budget means "I don't have the money." They are always borrowing money from others while I rarely ever have to do that because I stick to my budget. I don't care how much you make. If you are at zero before your next paycheck then your income don't mean nothing.
I have saved so much money by budgeting! I watch where every dollar goes and what i spend my money on
In the military I had 3 categories in my budget. 1,2 and 3. 1 was savings and retirement investing. 2 was bills and items I need, phone and mil clothes mostly. And 3 was everything I don't actually need. Travel, eating out. Made it easy. I met my savings goals and i could see when I was eating out way too much. Now i gotta have line items because I have other expenses. But it doesn't have to be hard.
I spend 2 hours making my new budget at the beginning of every year and then 15-30 minutes every two weeks to plug in all my spending. It really isn’t that hard to do.
I like planning for everything yearly because I know if I need to spend more during one pay period than I have allocated money for a category, that I just need to spend less during the following pay period to even it out.
I think the issue is..... budgeting is good, not every budget has to be the same. You do a monthly budget, works for you, mine is only the next fortnight and works for me, a friend has a 12 month budget works for him.
Budgets work, but they are all different and has to work for the person doing it, or it will fail. Anything longer than 1 pay cycle for me will fail, but a single pay cycle budget, I have paid most of my debt, and now have investments and savings.
A budget is needless for me, because I'm a tightwad who pinches each penny until Lincoln screams!
No words. Way to set them straight George
They're not talking about when all of a sudden twice a year you get a bill for $1,600 for your car insurance. If you don't budget for that the previous 5 months then you're screwed
Budgeting works for my family. Sometimes we spend less on groceries and the left over money could either be rolled over for next month’s groceries or to be used for other expense that comes up unexpectedly etc
Literally every successful company follows a budget. Take a lesson from the wealthy, make a budget.
I did spend one month tracking my spending, before doing a zero-based budget for the first time. I really had no idea where my money was going. But however you say it, budgeting gives you power and control. I used to wind up with $4.15 in my checking account until my next pay. Now I have a float where I'm consistently moving some to savings (where my debit car can't reach it.).
I💕 my budgets. Have one weekly, one monthly and my yearly savings.
Mr. Kamel- If a budget is "flexible", then (drum roll please) IT'S NOT A BUDGET!
Why do people avoid budgeting as much as possible? Just that simple budget and spend less than you earn, period.
It takes my wife and I about 10 minutes to update our budget every month.
Love the video George. So in other words, these budget haters are basically saying: "have a budget, just don't call it a budget"!😂😂😂
I watch Ramit too "Focus on the $30k questions and not the $3 questions" .... yeah, I "get it" but especially when starting you MUST focus on the $3 questions to generate margin. It's hard but you have to start somewhere.
Budget doesn’t work! We have never budgeted. Just buy what you need.
I budget like the Government...they know everything...Is that wrong?
If you 'automate' money spent, then it really part of your budget. Services, light, rent, automate them..yes. The rest of your money, you figure out best to spend..called budgeting.
Calling a budget a diet is brilliant! Not like, "Oh, I'm on a diet," but like when a doctor asks you what your diet looks like. 50% of my diet is on eating out and Gucci. Not good!
I don’t use a budget, I use an envelope system in ynab 😜
I LOVE budgeting lol would be totally lost without the accountability
That reminds me I forgot to add this mornings breakfast burrito to my budget plan
I'm in my 20s, make a middle-class income, and I agree that budgeting is overrated and unnecessary. This is true at least when it comes to zero dollar budgets that Ramsey recommend. I care much more about cash flow management and back logging all my transactions to see trends in my spending. The only thing I budget for is guilt free spending, which is just an allotted amount that I can roll over month to month. It's the only section of my finances where I don't track what I'm spending it on. I can be carefree with this.
Ramit makes a budget but does it differently. He also mostly has top 3% earners on his show. Also, LOVE you got Centsible Mom on your show!
I don’t have a budget even though I know I should. I do however track my incoming and outgoing through an app. And it does make me more conscious of what I spend.
I automate and enjoy what’s left
Modern monetary theory lived out personally leads to bankruptcy. Everyone and everything needs a budget
If budgets were easy, everyone would do that and stick to it… Just like working out
I’ve never found a budget to be useful for me personally. If you are paying yourself first (ie hitting all your savings goals), the rest of the money is yours to use as you wish. The idea of tracking every single individual spending category and worrying about being a dollar over here or there is more time than it’s worth (for me).
Cut out the Name Dropping,........lol 😂 to George!
I’ve budgeted all my life and did not go without , now late 50s and living like no other, I’m not without let’s just say
The point about obsessing over the budget is maybe a good point. I typically spend 3-4 hours every day playing with my budget. I am the nerd being criticized in that video. One of my friends said I look at my budget as often as most people look at social media