Budgeting for a "Surplus": Playing Games or Playing it Smart?

I see a pattern in several of the budgets I’ve reviewed lately. I can’t quite put my finger on it, so I’m hoping you’ll jump into the discussion and help me clarify the idea.

It goes something like this:

I get the impression some people purposely budget too many dollars to certain categories. I think they do it (and this is where I need some help clarifying the idea) for two reasons:

1. Fear of over-spending. Some people seem to really hate seeing red negative numbers in their budget – ever.

2. Desire to celebrate the “surplus.” At the end of the budgeting period, when they have money left over, they can call it a win and funnel the money elsewhere in the budget.

If this is actually happening, I consider it a budgeting blunder. Not a heinous financial crime, but definitely a miss.

It pushes the assignment of dollars to those important goals to the end of the budgeting period – which means everything else comes first. This is the opposite of using Erin’s “find the money” technique to force progress into your budget.

It also negates the power of Rule Three: Roll with the Punches. Remember – overspending is normal, it’s expected, and (when managed correctly) it’s okay! Guess what? Jesse – YNAB’s founder – overspends like the rest of us. Why else would he have built Rule Three into the method?

Put dollars in the categories that move you closer to your goals, then mentally padlock them. If you have to break that padlock on the 29th of the month to buy groceries, that’s fine.

I’d much rather see you force dollars into your “get ahead” categories early than wait till late in the month when it feels like you just can’t spare a penny.

Does this resonate with you? Is budgeting for a “surplus” something you’ve done?