Why you should personalize your budget
There's no single 'right' way to spend. Your needs and goals are unique, and your budget should be, too.
The financial planner suggested that they not put money into retirement or their young daughter's education fund. Instead, they should focus on building a cash reserve equal to six months' living expenses.
Yet shouldn't people in their late 20s be throwing money at retirement, because of the magic of compound interest? And isn't a three-month emergency fund, or even a $500 emergency fund, acceptable these days?
Wait . . . that would mean there's more than one way to budget. Can that be true?
Yep. Here's how the planner phrased it: "Their family budget won't look like other families' budgets, but it doesn't have to. It should instead reflect their unique priorities and constraints."
Stop thinking your spending plan has to mirror your brother's, or your friend's, or Dave Ramsey's. Your needs and priorities are as unique as you are, and your budget should be, too.
One size doesn't fit all
There's no single "right" way to do it because not every piece of money advice applies to every situation. MSN Money columnist Liz Weston addresses this in "3 money tips for every income," noting that, for example, "guidance that makes sense for a middle-income household might not apply if you're under the poverty line."
Certain rules are pretty absolute: Pay your bills, pay your taxes, craft some kind of emergency fund, think about retirement. But the way you do these things is different from what anyone else does. (Post continues after video.)
Understand: I believe that everyone needs a budget. (Or a spending plan, a spending intention plan or whatever you want to call it.) This can be done on paper, with online budgeting software found at sites like Adaptu and Mint.com, or even in your head.
I'm in that third camp. My budgeting isn't so much a series of line items as it is a general way of life. Specifically, I live as well as I can on as little as possible so I can fund my retirement and set aside money for those rainy days. Frugality means that I have everything I need and some of what I want.
The way I live, and budget, wouldn't work for everyone. But not everyone looks like me.
Your mileage may vary
A budget means freedom. That sounds like a contradiction in terms, since "budget" connotes rules and regulations. But when you know you've got enough to cover your obligations and still plan for the future -- while also allowing for some fun in the present -- then you sleep very well, thanks.
How you get there is up to you.
Educate yourself; MSN Money's "Personal finance" pages are a good place to start. Be intentional about spending, rather than letting dollars dribble aimlessly out of your wallet. Envision the future instead of thinking, "I'm too young to worry about retirement."
Think about what you want and set out to get it. But don't turn yourself inside out to keep up with some imagined "right" way to budget. Your spending plan probably won't be exactly like your best friend's. Remember: It doesn't have to.
More on MSN Money:
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
WHAT IS FRUGAL NATION?
Donna Freedman's Frugal Nation blog is for readers who want to live cheaply -- whether due to necessity or a lifestyle choice. It explores living sustainably and making life more meaningful at the same time.
ABOUT DONNA FREEDMAN
Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.
Starting Monday, this site is joining forces with MSN Money Smart Spending. Here's why.
VIDEO ON MSN MONEY
Yes, sometimes retail therapy has a place. Just try to be aware of shopping to beat the blues, and don't overspend.