Guess what? It's ok to guess.


The first time I set up a budget was way back in 2006 when YNAB was just a spreadsheet for Excel. I’d just added up my credit card debt and I knew I’d need to budget my way out. I set up my categories and entered my income and started working my way down the screen. $60 for the electric bill, $945 for the mortgage and so on.

Then I got down to the grocery category. I stared at it for a long time. How much should I budget for groceries? I had no idea. What did I spend on groceries last month? Again, no idea. I remember feeling like I should know this. It was pretty discouraging. So I did the only thing I could think of.

I guessed. Yup, I just guessed. I figured I was about to learn a lot about my spending and I should just be flexible. I remember making lots of guesses in those early days.

I suppose I could have logged into my bank online and searched through past transactions, but I didn’t think of that. And honestly, even now, it doesn’t sound very appealing.

There’s something very freeing about guessing. You know you’re guessing so you don’t have to be right. There’s much less pressure when you remove the need to perfect. Perfection is overrated anyway. We learn more by reflecting and adapting to information.

We often think perfection in budgeting means setting a budget and sticking to it. But every month would have to be “normal” for that to work. When was the last time you had a normal month? There is no such thing! Thanks to Rule Three, perfection is defined by sticking to the process of budgeting. You evaluate the budget as the month unfolds and make sure that things are still lined up with your priorities. Ahhh, that’s perfection.

If you’re just starting and you’re in the same situation I was, you’ll be guessing a lot. Then, with the help of Rule Three, you’ll be adjusting a lot when you’re guesses aren’t right. But this is a really, really good thing. You’ll gain crystal clear awareness of what’s going on financially. That will lead to better decisions about money.

You’re also going to get lots of practice refining the budget. You’ll be massaging things here, tweaking things there, and constantly reevaluating your priorities. They’ll start to become obvious and will jump right out at you. When you can align your spending with what matters, money management becomes a much more positive and rewarding experience.

Over time something magical will happen. Your guesses will get a lot more accurate. This is partly because you’ll be more aware of your spending habits, but also because you’ll have some data to look back at. For me, I budgeted too little for groceries when I first started. I was constantly adjusting that category. After about 6 months, I was able to see what my average grocery spending had been and I was able to use that as a guideline moving forward.

But don’t worry if that doesn’t happen right away. Enjoy the journey. Enjoy the guessing. When you make an adjustment say, “Hooray! I saw a problem and I fixed it! Go me!”.

My guess is all this guessing will eventually put you in pretty good financial shape.