4 Money Experts Who Don’t Like Budgets

Famed financial advisor Suze Orman recently declared, “I hate budgets” in a Wall Street Journal article . Ramit Sethi, host of Netflix’s “How to Get Rich,” was just a little nicer when he said, “I don’t like budgets ” on LinkedIn.

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And they aren’t the only two financial pros who are proudly anti-budget. But why do they agree that regular investors should put their financial focus elsewhere?

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Suze Orman Compares Budgets to Crash Diets

Orman likens budgeting to a crash diet, where consumers who are obsessed with every dollar they spend (or every calorie they consume) are unable to sustain focus and will end up binging.

“If you restrict, you limit, you cut back, you don’t buy this, you don’t buy that, and then all of a sudden, you explode and you go out and you buy everything at once,” she explained.

Orman noted that a little planning ahead can go a long way: If you are 25 and set aside $100 per month to put into a Standard & Poor’s 500 index fund through a Roth IRA until you are 65, you will likely average annual returns of 12% and have $1 million saved in those four decades.

She also said knowing the difference between “wants” and “needs” is important and claims that budgets don’t help consumers discern between the two. Orman suggested splurging on wants that truly enhance your life — she recommended never eating out and has said she would rather be caught dead than buying a cup of coffee from a vendor.

She encouraged the average investor to take the time to determine what represents a good guilt-free purchase and what you could easily do without.

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Ramit Sethi Believes Budgets Are Exhausting

Sethi agreed with Orman on many points, noting that “pointless” budgets “can drag you into the weeds of $3 questions.”

He also said budgets “make us feel bad about ourselves; they don’t provide any forward-looking information.”

The wealth expert preferred a forward-thinking approach that involves conscious spending and more of an offensive approach than a defensive stance. Sethi also encouraged individuals to lift the restrictions of budgeting and focus on “automating your finances so you can live your Rich Life. Once you understand your overall numbers and adjust them so they align with your goals, you get to live life outside of the spreadsheet.”

His advice also encompassed focusing on the big wins rather than getting caught up in the weeds of day-to-day budgeting. Sethi added that you should “spend extravagantly on the things you love, [and] cut costs mercilessly on the things you don’t.”

Sethi’s Conscious Spending Plan covers four ways to take control of your money:

1. Fixed costs: Rent/mortgage, utilities and debt should represent about 50% to 60% of your take-home pay
2. Investments: 401(k)s, Roth IRAs and other investments should account for 10% of your take-home pay.
3. Savings: Savings for vacations, a house down payment and an emergency fund should be about 5% to 10% of your take-home pay.
4. Guilt-Free Spending: From dining out to new clothes, this category can equal as much as 20% to 35% of your take-home pay.

The Rest of the Pack

Ormen and Sethi are not alone in their sentiments on budgets.

Some experts called it the “B” word. Others said budgets aren’t worth the stress they cause.

Well-known financial journalist Dana Miranda recently wrote “You Don’t Need a Budget: Stop Worrying About Debt, Spend Without Shame and Manage Money With Ease.” The book claimed the “rigid, one-size-fits-all advice — usually written … with little perspective on the money struggles that many people face — is unrealistic and only creates stress and shame.”

Likewise, financial expert and bestselling author David Bach said, “A budget is a burden.”

All of these professionals agreed: Whether conventional budgeting is falling out of favor or not, you need to be mindful of your spending and invest in your future.

This article originally appeared on GOBankingRates.com : 4 Money Experts Who Don’t Like Budgets