More Than Half of Us Don’t Keep a Budget or Know How Much We Spend

This circular pie chart of people is divided in half to represent half of the population who don't budget.
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Never jumped on the budgeting bandwagon? You’re not alone.

A little over 55% of Americans do not use a budget to manage their hard-earned income, according to a new survey by The Penny Hoarder.

A similar 56% of survey respondents said they didn’t know how much money they spent last month.

But there’s a good case to be made for tracking your money. The survey of 1,900 Americans conducted in May also found that those who kept a budget were more likely to know how much they spent last month and were less likely to say they had splurged on something that hindered their ability to pay bills.

While following a budget can help people keep tabs on their spending and reach financial goals, many Americans simply don’t think it’s necessary. At least that’s what half (51%) of those who said they did not budget gave as their reason.

Nineteen percent said they didn’t budget because they didn’t have the time or energy and another 19% chalked it up to lack of organization. Just 6% of Americans said they don’t budget because they know they’ll overspend anyway.

These results didn’t particularly surprise Rebecca Wiggins, executive director of the Association for Financial Counseling and Planning Education.

But taking the time to create a meaningful spending plan goes beyond debits and credits, she said.

“It is all about creating alignment in your life — connecting your values to your money in a purpose-driven plan that allows you to stay in the driver’s seat,” Wiggins said.

How We Budget: Spreadsheets, Apps and Proven Methods

Of the survey respondents who said they do follow a budget, about 40% manage their money with a spreadsheet. Nearly 17% of those who budget said they use a zero-based budget, 14% use a budgeting app, 12% are fans of the cash envelope method and 7% follow the 50/30/20 method.

Of those who said they used budgeting app software to keep track of their spending, Mint was the most popular (accounting for nearly 42% of those who use a budgeting app). EveryDollar was second (17%), followed by Mvelopes (8%), You Need A Budget, or YNAB (4%) and finally, Personal Capital (3%).

What Else Our Spending Reveals

The Penny Hoarder asked people about their spending and budgeting habits broadly. Clearly, we have some dirty little secrets. Other key findings from the survey:

  • About 1 in 4 say they’ve hidden a purchase from a significant other in fear of how they would react.
  • Nearly 1 in 5 admit they have splurged on a purchase in the last two years that caused a strain on their ability to pay bills.
  • Fifty-nine percent of Americans view themselves as savers while 41% say they are spenders.
  • Half of Americans say they currently have no credit card debt. Twenty-two percent have less than $5,000 in credit card debt and about 8% have credit card balances between $5,000 and $9,999.

Here’s How to Get Into Budgeting — or Not

Budgeting doesn’t have to be painful. Think of it this way: It’s an opportunity for you to be in charge of where your dollars go.

You’re the master over your money. If your first budget isn’t serving you well, scrap it and try a new one.

However, if you’re among the half of Americans who just can’t get on board with budgeting, that doesn’t necessarily mean you’re destined to struggle. Living below your means and automating bill payments and savings deposits can help you meet your financial responsibilities and goals without a formal system.

You might also consider simply tracking your expenses rather than developing a full-blown budget. That way, you’ll be able to take note of how often or how much you’re spending and where you could cut back if you’re struggling.

Budget or no budget, we all want to live our best financial lives. Having awareness of how much money you make and where those hard-earned dollars are going will help you get there.

Feeling overwhelmed? Create a budget that works for you with our budgeting bootcamp!

Methodology: The Penny Hoarder used Google Surveys to conduct a national survey about people’s budgeting habits with 1,938 people completing the survey from April 23, 2021 to May 18, 2021. Survey responses are weighted so that each response is representative of the U.S. population.

Sponsor: Credit Sesame sponsored this survey, which was conducted independently by The Penny Hoarder’s editorial team.

Nicole Dow is a senior writer at The Penny Hoarder. Chris Zuppa, The Penny Hoarder’s multimedia content creator, contributed to this report.