Should You Stop Budgeting and Set up a Spending Allowance?

Budgeting can be simplified, automated, and centralized online, but that doesn't do much to inspire people who need to control spending. Budgeting is similar to dieting in that, after the initial zeal of a New Year's resolution to lose 20 pounds fades, motivation can be hard to come by.

But just because budgeting can be boring (or downright depressing if your finances are a mess) doesn't mean it's not necessary. The daily tasks of managing money and occasionally making financial sacrifices are part of life as a grownup.

Are Budgets Doomed to Fail?

Budgets aren't doomed to fail so much as they're "doomed" to need revision. Rare is the person who can create a budget in January and follow it perfectly the rest of the year without having to make adjustments. Cars need repairs. Kids need braces. Sometimes you need to console yourself with a great pair of boots because it's cheaper and more immediate than seeing a therapist or running away to Tahiti. But the sooner you get back in the saddle and retake the reins, the better off you'll be, even if you have to adjust your route a little on the way back home.

Automated Bill Payments Can Be Useful Financial Tools

One budgeting technique that even budget-averse people find useful is automated bill paying, and you can set it up with most, if not all, of your monthly bills. You can also automate contributions to emergency savings and retirement accounts. You'll avoid late fees and avoid the panic of realizing your electric bill is due and you're out of stamps and have to find time to drive there and pay in person. Automate all your regular bills and what you have left over is what you can use for other savings goals, spending on necessities, and spending on non-necessities.

Next step: Sign up for Mint and track all your spending in one place, quickly and conveniently.

Automated Payments with Pre-Set Spending Allowance

Some people are able to come to terms with money management by automating monthly bills, and allocating a set spending allowance from what's left over. If this keeps your accounts in the black and your financial stress to a minimum, then it can be a great way to go.

But it's not magic, and it can't cure deep-seated money management deficiencies. Some people simply won't stop spending once their monthly or weekly "allowance" is used up, and end up using credit cards to make up the difference. While this is OK on occasion, if you're regularly outspending your spending allowance, then you probably need to make more fundamental changes, like getting a cheaper apartment or looking for a better paying job to free up funds.

Income Still Has to Be Greater than Outgo

When you want to lose weight, the bottom line is that calories ingested have to be fewer than calories expended. The same is true with budgeting: the amount you spend has to be less than the amount you make, or you'll find yourself in an ever-deepening hole of debt.

There's no one set way to ensure your income exceeds expenditures, and what works for one person won't work for another. But whether you set up a budget using an online tool like Mint, or whether you automate bills and divide up what's left over into a series of envelopes for different purposes, it's ultimately about ensuring that the money coming in exceeds the money going out.

Is It a Budget if You Don't Call it One?

Like "dieting," the term "budgeting" is a sensitive word for some people. But whether you call it a financial plan, a spending plan, the envelope method, or something else, the goal is always the same: making the most of your money. You may have to try out different ways of managing income and spending to find the one that's best for you. In general, the more you can automate, the easier it will be, and the more likely you'll be to stick with it.

Budgets aren't doomed to fail. What's doomed to failure is any type of money management system that's unrelated to your particular reality. Fortunately, the tools you have available to you today are more powerful, convenient, and customizable than ever, and that's one reason people love MintMint can automate the tracking of your finances after a quick, initial setup process. Automate your bill paying, and you remove even more budgeting hassle. However you choose to manage your finances, Mint can be used to make it simpler and keep you on track.

Next step: Sign up for Mint and track all your spending in one place, quickly and conveniently.