|

Why Budgeting Sucks (and What to Do Instead)

ByRobert Goudie Updated on Budgeting, Education

Why Traditional Budgeting Fails

We’ve all been told that the key to managing money is to create a budget and stick to it. Track every dollar, set spending limits, and make sure you don’t overspend in any category. It sounds good in theory!

But let’s be real—most people fail at budgeting. Not because they don’t care about their money, but because strict budgeting is rigid, time-consuming, and difficult to maintain long-term.

You might start strong, logging every coffee and grocery run, but life gets busy. Unexpected expenses pop up. One month, you go over in groceries but under in entertainment—does that mean you failed? For couples, it can create friction, with one person treating the budget as law and the other feeling like they’re constantly being policed.

Traditional budgeting focuses too much on small expenses and not enough on the big financial moves that actually build wealth.

That’s why I don’t believe in tracking every dollar. Instead, I use a big-picture approach that prioritises the financial decisions that truly matter—while allowing you to spend guilt-free on everything else.

The “No-Budget” Approach: Focus on Big Wins

Instead of micromanaging your spending, I focus on these three key areas:

Home Loan Payoff – Instead of stretching out a 30-year mortgage, automate extra repayments to shave years off your loan. The interest savings alone can far outweigh small budgeting tweaks.

Superannuation & Investments – Are you investing enough for retirement? Super is a great vehicle for tax benefits, but you should also consider investments outside super for financial freedom before retirement age.

Emergency & Future Savings – Having accessible cash reserves means less reliance on credit cards and loans when unexpected costs arise.

Once you’ve allocated funds to these priorities, the rest is yours to spend however you like—guilt-free.

This removes the stress of tracking every little expense while ensuring that your financial future is still being taken care of.

Why This Approach Works Better

Less Stress, More Freedom – No more spreadsheets, logging expenses, or feeling guilty for small indulgences. If your financial priorities are funded first, there’s no need to sweat the small stuff.

Automates Financial Success – Instead of relying on self-discipline, automate your mortgage overpayments, super contributions, and investments. When it’s set up to happen automatically, you don’t have to think about it.

Focuses on What Actually Matters – Cutting back on small expenses won’t make you rich, but owning your home sooner, investing regularly, and securing your future will.

Works for All Income Levels – Whether you earn $60K or $250K a year, prioritising big financial moves makes more impact than cutting out lattes.

How to Implement This “No-Budget” Plan

Identify Your Big Priorities – What financial goals will actually change your life? Think: paying off debt, funding retirement, or building investments.

Crunch the Numbers – Work out how much extra you could allocate each month toward these goals. Even small adjustments (e.g., an extra $200 toward your mortgage) can make a big difference over time.

Automate It – Set up automatic transfers to ensure your priorities happen first. This removes temptation and decision fatigue.

Spend the Rest Freely – Once your major financial moves are covered, whatever’s left is yours to enjoy. No more tracking every coffee or meal out.

Review Every 6-12 Months – Instead of daily or weekly budgeting, do a bigger-picture check-in a couple of times a year to adjust as needed.

Final Thoughts: A Smarter Way to Manage Money

Traditional budgeting tries to control every little expense, but it’s not sustainable for most people. The better approach? Focus on automating big financial wins first, then spend the rest without guilt.

By prioritising home loan repayments, investing for the future, and having a financial safety net, you’re securing long-term wealth and financial freedom—without stressing over whether you spent too much on dinner last week.

Forget budgeting. Focus on the big wins, automate your plan, and let your money work for you—without the hassle.



The information provided in this article is general in nature only and does not constitute personal financial advice.  

Similar Posts

Harvesting Financial Success

Harvesting Financial Success

Updated on Budgeting, Education, Finance

Spring is the perfect time to rejuvenate your financial habits as well as your garden!  Here are 5 ways to set you, and your garden, up for success:  1. Plan your garden: Start with deciding what type of garden you want. In other words, get clear about what goals you want to achieve and by when. Once you have your list of goals prioritise them, so you know where to focus your efforts.  Tip: If a goal is large and will take some time to achieve, set yourself some smaller goals with shorter timeframes along the way.   2. Pull out the weeds: You don’t see garden designers on TV rushing in to plant a new garden without getting rid of the weeds first. In financial terms this is the same as eliminating bad debt. Bad debt is debt used to purchase things that don’t go up in value, like cars and household goods. Financing purchases with credit card debt (where the entire balance isn’t paid off each month), personal loans and perhaps ‘buy now, pay later’ facilities mean paying very high interest rates or late fees. Your total cost ends up much more than the original purchase price. These are your weeds – pull them out and don’t let them take hold again!  3. Prepare the soil: A key element to a flourishing garden is good soil. For us this is managing our cashflow. For many people our income is fairly consistent, so the focus is on managing outflows. Think of this as a spending plan not a budget. The ‘B’ word has a strong association with denial and, much like a diet, too much restriction can be counter-productive. Be honest when completing it as you need to know exactly where your cash is going. Your adviser can be a huge help with this. It’s an opportunity to look at your spending and think again about your goals. Is the enjoyment you get from three streaming services more than what you’ll get from achieving your goal? What do you want more?  Tip: Ways to reduce spending often require some planning. Taking lunch to work can save a heap of money. Too rushed to do it in the morning? Make something the night before – and remember to take it with you the next day!  4. Plant your garden: This is where things start to take shape! Gardens often start small so think of this as your initial investment which over time becomes larger and larger. In your financial life this is the power of compounding. To help those initial plants fill out your garden quicker you can add other small plants over time. This is known as dollar cost averaging or adding regularly to your initial investment to boost the effect of compounding.   5. Protect from pests: Your garden will appreciate some help to guard against pests and disease. In the same way it’s a good idea for you to protect your biggest asset – your ability to earn income. Income protection and other types of life insurance can protect you against unexpected events and prevent all the hard work you’ve put into your financial garden from unravelling.  Success requires commitment because, just like droughts which affect your garden, there will be times when reaching your goal seems hard going. Don’t abandon your dreams! With clear goals, elimination of bad debt, a realistic cashflow plan, disciplined regular saving and protection of your biggest asset, you’ll be harvesting rewards season after season!  The information provided in this article is general in nature only and does not constitute personal financial advice.    

Building financial resilience

Building financial resilience

Updated on Budgeting

Resilience is the ability to quickly recover from setbacks, and while setbacks can come in many forms most of them will have a financial component. So what can you do to build financial resilience? Expect the unexpected Rarely do we get advance warning that something bad is about to happen to us, so the time to develop your resilience strategy is now. And while we don’t know the specifics, we can anticipate events that would throw our finances into disarray. A house burning down or a car being stolen. Not being able to work due to illness or injury. The death of a breadwinner or caregiver. With some idea of the type of threat we face we may be able to insure against some of them. If you have taken out any type of insurance policy you’ve already made a start on your resilience plan. Create buffers You can’t insure against every possibility, but you can build financial buffers. This might simply be a savings account that you earmark as your emergency fund that you contribute to each payday. If your home loan offers a redraw facility you can also create a buffer by getting ahead on your mortgage repayments. Buffers can be particularly important for retirees drawing a pension from their super fund. Redeeming growth assets for cash in order to make pension payments during a market downturn can lead to a depletion of capital and reduction in how long the money will last. By maintaining a cash buffer of, say, two year’s worth of pension payments, redemptions of growth assets can be deferred, giving time for the market to recover. Cut costs The Internet abounds with tips on how to cut costs and save money. In difficult economic times cost cutting can help you maintain your financial buffers and important insurances. Key to cost cutting is tracking your income and expenditure and yes, that means doing a budget. Find the right budgeting app for you and this chore could actually be fun. Invest in quality There are many companies out there that have long track records of consistently pumping out profits and dividends. They may not be as exciting (i.e. volatile) as the latest techno fad stocks but when markets get the jitters these blue chip companies are more likely to maintain their value than the newcomers. This is important. The more volatile a portfolio the more likely an investor is to sell down into a declining market. This turns paper losses into real ones, depriving the investor the opportunity to ride the market back up again. The other key tool in creating resilient portfolios is diversification. Buying a range of investments both within and across the major asset classes is a fundamental strategy for managing portfolio volatility. With a well-diversified portfolio of quality assets there is less need to regularly buy and sell individual investments. Unnecessary trading can create ‘tax drag’ where the realisation of even a marginal capital gain triggers a capital gains tax event and consequent reduction in portfolio value. Take advice Building financial resilience can be a complicated process requiring an understanding of a range of issues that need to be balanced against one another and prioritised. Your financial planner is ideally placed to assist you in developing your own, personalised plan for financial resilience.   The information provided in this article is general in nature only and does not constitute personal financial advice.

Dealing with Post-Christmas Blues

Dealing with Post-Christmas Blues

Updated on Budgeting, Education

The days leading to Christmas, holidays and celebrations are exciting, frenetic times. They’re a whirl of parties and social engagements, gifts and food to be purchased and travel arranged. The rush to get things organised builds into a great festive crescendo then…well, it’s over. If you’ve ever awoken on New Year’s Day feeling a tad flat, you’re not alone. Don’t beat yourself up; the Post-Christmas Blues is a well-documented condition. After the sparkle and colour of festivity, the hamster-wheel banality of real life seems pale and unappealing. Worse, the weather is hot, the kids are bored and fractious, and taking decorations down is never as much fun as putting them up. Then the bills arrive. The despondency you’re feeling is real, in fact, in a 2015 study by the National Alliance on Mental Illness (a US based mental health organisation), two-thirds (64%) of people surveyed admitted to feelings of depression and anxiety after Christmas. Symptoms include fatigue, tension, frustration, sadness and a sense of loss. If you’re nodding while reading this, the good news is there are steps you can take to reduce the physical, emotional and financial impact of the Post-Christmas Blues. Here are some ideas. Exercise – exercise every day, even a walk around the block, and if you have people staying over get up early and take time out for yourself. Get plenty of sleep – stick to a normal bedtime routine and ensure you don’t burn yourself out. Eat and drink in moderation – it’s not called the silly season for nothing. Moderation means enjoying yourself without overdoing it. Maybe try these two simple guidelines: 1. Never go to a party on an empty stomach. 2. Learn to love mineral water. If you feel pressured to drink alcohol, take mineral water and a slice of lime, over ice, in a spirits glass. They’ll never know the difference! Gift buying and holiday arranging is exciting, and it’s easy to lose track of how much you’ve spent. We have 12 months lead time so planning ahead is your best strategy. Consider these ideas: List who you’re buying for and set a spending limit. Don’t feel pressured to spend more or keep up with anyone else. If your credit card has taken a beating over the holiday season, speak to your adviser about a debt reduction plan. They’ll help you get back on track, and then structure a budget for the next year. The December/January period can be difficult for many reasons. If you feel yourself becoming overwhelmed, don’t soldier-on. Organisations like Lifeline Australia (13 11 14) or Beyond Blue (1300 22 46 36) are only a phone call away. Alternatively, if it’s a relaxing chat you’re looking for, why not ask a friend over for coffee? It may be just what they need too. The information provided in this article is general in nature only and does not constitute personal financial advice.  

Super in your 20s: Boring? Doesn’t have to be!

Super in your 20s: Boring? Doesn’t have to be!

Updated on Education, Superannuation

Superannuation is for the oldies, right? In some ways that’s true, but even in your twenties there are good reasons to take a bit more interest in your super. The average 25-year-old has around $10,000 in super, but the decisions you make now, even with relatively small sums of money, could earn you hundreds of thousands of extra dollars over your working life. Are you getting any? Earn more than $450 in any given month? Then every three months your employer should be paying 9.5% of that into your super fund. Usually you can choose your fund; if you don’t, it gets paid into a super fund of your employer’s choice. If you don’t know if your super is being paid, or the fund it’s being paid into, ask your employer. If you think you’re missing out, search ‘unpaid super’ on the tax office website (ato.gov.au) to see what you can do. This is your money. Where have you got it? Had more than one job? If you have a lot of little super accounts the money can disappear in a puff of fees and insurance premiums. Simple fix – combine your super into one account. Is it working for YOU? Your money is going to be stuck in super for a long time, so you want it to be working hard for you. Most funds offer a range of investment choices and some will do better than others. What do you want? Buying a new car. Travelling, Having fun. Let’s face it, there are lots more exciting things to do with your money than sticking it into super. The choice is yours but think about this: If Mum and Dad retired this year, they would need a minimum of around $61,909 per year to enjoy themselves. If that doesn’t sound like much now, by the time YOU retire inflation could have pushed that annual amount to around $214,248. That means you will need to have at least $3.71 million in savings! Sure you’ve got 40-plus years but that’s still a lot of money to save up! It can be done if you start early enough – and you don’t need to miss out on enjoying life now. Starting early and adding a bit extra when you can makes a big difference. Let’s work on another 40 years before you can retire. If you start now by making an extra post-tax contribution of just 1% of your annual income to super, ($350 from a $35,000 salary – and the government could add to that with a co-contribution) at an 8% investment return could add an extra $149,000 to your retirement fund. If you wait 20 years before starting to make that extra contribution, you’ll only get a boost of $49,000. $100,000 less! Continuing this small extra contribution as your salary increases will turbo boost your super fund balance. Imagine your retirement party?! So, still find super boring? That’s okay; you’re not alone. But instead of finding the time to organise all this yourself, contact us today and we will review your current super, any insurance required, the investment choices and prepare a strategy to get your super into shape – then you can get back to enjoying life!   The information provided in this article is general in nature only and does not constitute personal financial advice.

Is FORO ruining your retirement?

Is FORO ruining your retirement?

Updated on Education, Finance, Retirement

FORO – the fear of running out. I’d never heard the expression until I met Mark and Susan. Of course I’d heard of FOMO, the fear of missing out, but never FORO. As the newly-retired couple sat across from me, explaining how they were so afraid of running out of savings that they were not enjoying the retirement they’d worked so diligently for, I grasped the meaning of FORO immediately. They rarely went out for dinner, bought anything new or – heaven forbid – took a holiday. After a lifetime of saving hard, paying off a mortgage and raising a family, Mark and Susan were naturally frugal, but FORO had left them feeling vulnerable and afraid of the future. After two decades as a financial planner, I’d come across this situation before, although, it is unfortunately becoming more common. Mark and Susan had never sought financial advice before and weren’t sure what I could do to help, but came to see me because they didn’t know where else to turn. When I assured them that there was plenty I could do to help, they visibly relaxed. I explained that the key to overcoming FORO was having a well-structured financial plan. After I outlined my 5-step strategy, they were eager to proceed. The steps we took were as follows: 1. Conduct a financial assessment By thoroughly assessing their current financial position (superannuation, savings, investment and social security entitlement), I formulated a picture of where they were at, and their future cash flow projections.  2. Establish a sensible strategy Working together, we identified essential living expenses and discretionary expenses, then allocated funding that balanced financial security with lifestyle goals. Next, we determined a retirement investment portfolio with a sensible withdrawal rate to support their retirement plans. 3. Create an emergency buffer In my experience, the what if factor is a major concern for retirees. What if…I become ill? What if…the fridge breaks down? What if…the car dies? These questions, and more, play on peoples’ minds to the point where they fall back into a FORO mind set. To ease their anxiety, I recommended they include a contingency fund in their portfolio to ensure that unplanned expenses were covered. That way, if something unexpected pops up, their retirement lifestyle strategy remains on track. 4. Enjoy the early years FORO had been holding Mark and Susan back for too long. I explained that hobbies, travel and social activities are crucial to mental well-being. So once we had established a responsible financial plan, I showed them how they could afford to spend, sensibly, and enjoy themselves. I especially encouraged them to make the most of their early retirement years, while they were fit and energetic. 5. Schedule regular reviews The final step in the process was my ongoing commitment to Mark and Susan. Retirement planning is not a set-and-forget strategy; it’s a journey through every stage of life – physical retirement being one of those stages. By regularly reviewing their financial position, I helped Mark and Susan monitor their spending and investment performance, and made portfolio adjustments that kept them in control of their retirement plan. Last week I bumped into the couple on the street. They were glowing with excitement and told me they’d just booked a Pacific cruise. Of course, I was thrilled for them – it was a big tick off the bucket list! But when Susan said they’d turned FORO into FOMO and were living their best lives, well, I’ll just say it was one of those moments when I absolutely love my job! The information provided in this article is general in nature only and does not constitute personal financial advice.