First "The Cheapskate Next Door", then financial journalist Liz Weston... now it's my turn to come out of the closet, so to speak, as a financial professional who doesn't keep a "budget", at least not in the traditional way. Don't get me wrong! As many of my clients can attest to, I don't dispute for a minute the value of tracking expenses. In fact, I am convinced that thoughtful spending is the single most powerful tool in everyone's financial planning toolkit.

Nevertheless, whether you call it the "B" word, a spending plan, cash flow management, or [insert euphemism here], I tend to agree with many of my clients who wrinkle their noses in horror and recoil at the prospect of keeping track of expenses at a detailed level. The very idea of spending that much time staring at little numbers - perhaps some red - is off-putting enough to many that it simply doesn't get done, no matter how big the potential reward.

And therein lies the problem, as well as the solution.

Let's say you attend the annual meeting of a company you're considering as an investment. The CEO steps to the podium and says, "Good morning, everyone. We had another great year! However, I can't tell you exactly how great because, per usual, we didn't produce an annual report."

Shareholders in the audience begin to ask questions: How much does the company pay its suppliers? Can it get better deals on its contracts? What's the size of the payroll? The CEO can't answer any of these, eventually saying, "Listen, I have no idea where our revenue goes. I just know that the phones still work, the lights are still on, and my paycheck clears. Isn't that good enough?"

We hope you'd leave that meeting with no desire to buy shares of the company, wondering what kind of business doesn't keep good books. Yet this is how most people operate, with only a vague idea of where their money goes.

"Too much money is as demoralizing as too little, and there's no such thing as exactly enough."
-- Mignon McLaughlin, The Second Neurotic's Notebook, 1966