Don’t get us wrong: Here at Everyday Money, we believe budgeting is important. However, we do take a different stance from some other financial professionals. We don’t think that budgeting is something that every person needs to do all the time.

There are times and situations when budgeting is extremely beneficial, or even essential. But there are other times when it’s OK to put your budget on the back burner for a while. 

Remember, money doesn’t have to be your life – the best thing to do is look at your current situation and your goals and decide what you need right now. Maybe that’s strict budgeting, but maybe it’s not.

So how do you know when you should be budgeting? Let’s take a look at times when budgeting is necessary, optional, and unnecessary.

You need to budget if…

…money is tight. Making and sticking to a budget is essential when there’s not much difference between your income and your expenses. When you don’t have a big cushion of extra money each month, you need to track every expense to make sure you aren’t moving toward debt.

Debt is a vicious cycle – it’s much easier to stay out of debt than to pull yourself out of debt. Sometimes going into debt is unavoidable (e.g. emergency medical bills). And sometimes taking on debt is a calculated choice that’s the right call (e.g. taking out a small business loan). 

But unnecessary consumer debt (e.g. maxing out a credit card on stuff you want but don’t need) is something you generally want to avoid. And when you don’t have a lot of money, every unplanned dollar you spend can push you closer to that unwanted debt. 

So if you and your partner are in a place where your necessary expenses (rent/mortgage, utility bills, childcare, food, etc.) take up most of your income, you should budget. Allocating your income and then tracking your expenses will help you avoid making spending decisions that land you in debt.

You might not need to budget if…

…your finances are stable and comfortable. A strict weekly or monthly budget might not be necessary if your income and spending are predictable and unchanging. For example, if you’re not prone to making impulse purchases and you typically live a frugal lifestyle, you may not need to track every single transaction. 

Also, there are times when it’s best to take a short break from budgeting. When life is difficult, trying to follow a budget often ends up being too much, and that’s OK. If you are dealing with trauma, loss, grief, or extreme stress, it might be best to just let your budget slide for a little while.

You don’t need to budget if…

…you’ve got a lot of disposable income and you’re responsible with it. Does your monthly income far exceed your expenses? If so, you probably don’t need to maintain a strict budget. When you have a lot of extra money left over after you pay your bills each month, you may be able to just keep a casual mental budget and check in with the actual numbers every so often.

You also don’t need to budget when you’ve been sticking with a plan. Budgeting gives you the freedom to do things you might not be able to do otherwise, and it allows you to take occasional breaks because you’ve already planned and saved for everything. 

For example, let’s say you’ve spent a couple years planning your dream vacation. You’ve included vacation savings in your budget so you have all your expenses covered and don’t need to worry about paying for travel and lodging and food. You’ve set all your bills on auto-pay and have part of your direct deposit routed to your emergency fund

This is a great time to take a break from budgeting! Go on your vacation and enjoy the feeling that everything is under control financially. Following the budgeting plan gives you the freedom to take a break from it when you need to.

Make your budget work for you

A budget is a powerful tool that gives you control over your money and helps you reach your financial goals. That said, a budget isn’t the be-all and end-all of personal money management. There are times when budgeting isn’t necessary or when taking a break from the budget is the best thing for your mental health and quality of life. 

If budgeting is the right step for you and your partner, there are several ways to do it. Ledgers, spreadsheets, and apps are all tools you can use for your budget. The best method is the one that you will use consistently.

If you don’t have a budget yet, we can help! Start by going through our free resources, which are designed to help you identify your financial values and learn the basics of budgeting. When you’re ready to put your budget in place, check out BudgetingBlocks™. Our innovative system makes budgeting fun and easy by allowing you and your partner to visualize your money.