Is Tracking Your Spending as Good as Budgeting?

12.08.08 | Money Management | 0 Comments | by junger

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Can you hit your financial goals without budgeting your spending each month? What about if you're tracking every penny you spend, but not setting aside certain amounts for each category?

For the past year or so, we've been tracking all of our purchases to find how much we are totalling at the end of the month, but not planning out how much we will spend for groceries, entertainment, and other expenses that fluctuate month-by-month.

Since we're automatically setting aside money for our retirement and short-term goals, we know we're saving — and pretty aggressively, too.

But would it be better to establish budgets for the expenses that change every month?

This month, we're trying it. (We used to do this when we first started saving money, but stopped after a while).

The past few months have been a bit expensive — our out-gos have been higher than our incomes. But since we treat savings as expenses, we're basically moving money from our cushion into savings.

Our paycheck to paycheck mentality makes our checking account levels relatively low, but this forces us to really watch what we spend.

What do you think: If you're automatically set to save money, is tracking your spending as good as budgeting?

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