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Trial and Error

QUESTION: Ben in Nashville and his wife want to know the best way to learn how to efficiently budget other than by trial and error. Dave tells him trial and error really is the best way.

ANSWER: You know, truthfully, trial and error is the best way, and that’s why we say in The Total Money Makeover it takes about 90 days to get it right. The more years and months that you budget, the more accurate you’re going to be—the more able you are to anticipate things. So just cut yourself some slack. It’s not something you can microwave. It’s more of a Crock-Pot thing. Just give yourself some grace.

I don’t mean just bail on budgeting or to give yourself grace to go on a spending spree, but I am saying that if you just make an error straight up on the budget—you just underestimate something or overestimate something—just correct it the next month. Keep at it.

The thing that you’ve got to think about is the first month you did a budget: 70–80% of it was accurate, but the other 20% will drive you nuts. Then the second month you do it, you’re going to knock off about half of that stuff. You won’t do it again. You’ll get it right. The third month you do it, you’re only going to have three or four things that pop up every so often that you just miss—you didn’t think about that. “Dad-blame it! We were doing so good, and then we forgot about that,” you know?” It’s that kind of an experience, and you’ll adjust. But you’ll get most of the kinks out of it—90-something percent of the kinks out—within 90 days. Three budget cycles—three months—and you’ll find most of your trial-and-error things.

That is the most efficient way that I’ve ever come up with because there’s just no way to say . . . there’s no template that’s big enough or detailed enough for your life because your life is different than the people next door to you.

We have general guidelines and ideas and concepts and a few forms—as you found—in the back of The Total Money Makeover book. But still, at the end of the day, there’s just a lot of stuff that’s hard to figure out, and it just shows up and smacks you in the face.

Just say, “It’s okay if we’re not perfect the first two months. The third month, we ought to be getting pretty close to perfect. From then on, we’re not going to be perfect, but we’re going to have a discussion about those little areas.” Your miscellaneous category, so to speak—your mad-money category for each of you—is going to get smaller and smaller as you more carefully refine the budget and more thoroughly refine it, but I think you’re probably doing better than you’re giving yourself credit for.

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