I have admitted it before, The Rockette have never lived on a formal budget. The closest we come to real budgeting is what I label retroactive budgeting. This is when you come up with reasonable spending amount for the different categories like groceries, clothing, entertainment, etc. Then at the end the month you compare the actual totals to your suggested limits.
When we were in the midst of shedding our 70k in debt, we did this almost every month. As the debt shrunk, so did frequency of our retroactive budgeting. I have been trying to decide whether this is a negative thing.
Three things happened as our debt decreased and was eliminated.
- Our behavior and spending patterns changed. With less debt and new spending habits our monthly totals feel within a reliable range.
- As the immediacy of the situation abated, so did our intensity. Our intensity got us through the tough times and turned the tide, but then our attention slowly began to leak elsewhere.
- I felt like we earned the right to not check. Not checking as closely became the reward!
The thing is, changing the direction of the net worth train and your financial habits is heavy tiring work. Work that pays off down the road and work that removes stress. For those of you that are in the midst of an intense debt struggle, this can be a light at the end of the tunnel. For those of us who weathered the storm and are in cruise control, you know that freedom that is created from not having to worry and stress over your finances.
Sometimes, I think I am sacrificing financial efficiency, because of laziness. Other times I remember that the reason I got out of debt was to have the freedom to focus on other areas of my life without having my finances dictate decisions. Obviously, I think the latter is more often the reality or else I would be much more diligent about checking.
What are the readers opinion on the matter? Are you earning the right to ‘slack’, or are you going to better off if you stay focused and efficient?