Why isn’t budgeting necessarily the smartest way to handle one’s finances? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by David Bach, Personal Finance Expert and 9x NYT Bestselling Author, on Quora:
Let’s be brutally honest on this one. Budgets simply don’t work for most people.
Here are six reasons budgets don’t work in the real world.
Budgets suck. They’re not fun to live with. And so most people don’t.
Budgets take time. And you’re too busy to create one, much less stay on one.
Budgets are complicated. Figuring out how much money you’re going to spend on every little category can drive you crazy.
Budgets lead to fights. If you’re someone who wants to budget and you’re married, or in a relationship, in almost every case you will fall in love with your financial opposite and then fight about the budget.
Budget don’t last long-term. I have seen firsthand as a financial advisor that people who say they will budget to save and invest never stick to it long term. In a nine-year career at Morgan Stanley I had one client budget and invest for more than six months. The rest all quit – just like dieting.
So what works if budgeting doesn’t work? What works is AUTOMATION.
You need to make your entire savings and investment plan and financial life AUTOMATIC.
I wrote a book called The Automatic Millionaire that teaches this one step approach to building wealth. It was a #1 NY Times bestseller, spending over 31 weeks on the bestseller list. It’s sold over 1.5 million copies, and it will show you exactly how to automate your financial life in less than an hour. We just recently updated this book and you’ll find it at.com.