Budgeting always seems to tally your categories after you've spent - whether the spending was planned or not. Still, since I could be wrong, I did some searching. This if from ptmoney.com (first time visit)
"Budget = Restrictions
One of the biggest issues I have with the concept of budgets is the restriction factor. I know that, as a personal finance blogger, I’m supposed to be ok with cutting back, but I really don’t like the idea of enforced restrictions on my spending — even when I’m the one creating the restrictions with a budget. My personal money style is that of a spender, and a budget cramps my style.
To me, budgets are about limitations. With a budget, I try to set a limit on different categories of spending. Once I hit that limit, I’m supposed to be done. There’s no spontaneity. Unless, of course, I budget that in, too. But it seems kind of pointless to budget in what’s supposed to be fun, spontaneous spending.
After a while, the budget starts to chafe, you feel restricted, and you start to feel a little bit harried, forced to count every penny — and possibly pinch each penny as well. It’s exhausting, and, in my case, it sucks the joy right out of spending money.
Instead, with a spending plan, I find there’s a little more flexibility. Just because I don’t like budgeting, and I like spending, doesn’t mean that I ignore the basics of good financial practices. Instead, I plan some of my spending ahead of time to make sure that my most important funding priorities are met.
Before I spend on entertainment, recreation, dining out, and travel, I make sure that the essentials are covered. My funding priorities include:
Tithing to my church
Charitable donations
Monthly obligations (mortgage, insurance premiums, utilities, groceries, etc.)
Retirement account
Emergency fund
Effort to build dividend income portfolio
Long-term spending goals (vacation, car down payment, home improvement, etc.)
As far as I’m concerned, once those funding priorities are met, other spending categories don’t matter. I automate most of my funding priorities, so that is all taken care of without conscious effort, and recorded in my personal finance software.Reactive vs. Proactive Financial Planning
Another difference I see between budgets and spending plans is that one seems reactive, while the other is more proactive. To me, a budget seems reactive. It’s as if you’re on the financial defensive, cutting spending and trying to avoid “overspending” in each category.
It’s a position that seems to encourage a lack of control. In my mind, having a budget is a lot like being at the mercy of your money.
On the other hand, a spending plan evokes feelings of purposeful spending. In my mind, a spending plan is about taking charge of my finances, and directing my money. I can choose the way I direct my resources, planning to fund my most important priorities.
It just seems more positive to focus efforts on creating a spending plan that puts you squarely in charge of your financial destiny. Rather than thinking, “I can’t only do this much this month,” as a budget encourages you to think, a spending plan allows you to say, “I’m going to do this with my money.” Perhaps it’s not a big difference, but it reveals a lot about the mindset.
With the budget mindset, money is always scarce. Even if money isn’t scarce in your situation, the budget mindset seems to set up financial scarcity, since you know there is a cap on what you can spend in certain categories.
Your spending plan, though, indicates that you have some sort of direction and purpose for (at least some of) your spending. It implies that you have the money to meet your goals, and that you are in charge of your money habits, deciding where your resources should be used next."
This guy is obviously wise beyond his years. Ha-ha!
Once all my automatic payments are set up, everything else is discretionary. If I choose one month of restaurants $400 and bookstore $200, and then the next month restaurants $120, bookstore $20, spur of the moment canoe 3 day weekend $300 no categories have to be juggled as everything is out of the monthly discretionary up to the limit of that free-spending category. I never borrow from the auto pay accounts, and can basically not worry about them. They've been set up in advance; I check the monthly statements to make sure they are on track. With worrying about money lessened I am actually able to save more