Although Jane and I both very recently wrote articles about how we’ve been tracking every dollar we spend lately, (check out Jane’s Budgeting article Saving Money Like You’re In the Depression Era and my budgeting article How Tracking Money is Like Weighing Yourself), I want to write here about a way to possibly not track your money at all.
This is kind of the method I was unofficially using before I started tracking every dollar this past month using the Goodbudget app. The method involves taking a savings percentage off the top of your income before you spend any of your money on anything else. The word “savings” is general and can include any of the below:
–Contributions to an Emergency Fund
-Contributions to any savings account
-Contributions to a retirement account – such as a 401K, an IRA, or a Roth IRA.
-Paying down any debt- such as a student loan, a credit card, or accelerating your mortgage payments.
-Contributions to your child’s college fund- such as a 529 Plan.
So here’s how to live the anti-budget life:
- The second you get paid, decide on a percentage of your income to contribute towards savings.
2. If you never save anything, you can start with as little as 1% to save. The way to figure this out is to simply knock 2 zeros off the amount. So if you get paid $2000 biweekly, contribute $20 every time you get paid. Make $1000 biweekly, contribute $10 every time you get paid.
3. If you’ve been saving already, for retirement, for a house, to pay down credit card debt, to have a good emergency fund- saving for anything really- then you can easily incorporate this tactic to make saving money even easier. Whenever you make any money, save a certain percentage towards any and all of your goals. I usually do it this way- the second I get paid, I put 10 percent towards my emergency fund, 10 percent towards retirement, and 10 percent towards throwing extra money at my student loans.
With this tactic, you can then try not budgeting the rest but instead spend it comfortably knowing that you’ve already saved what you needed to.
Of course, you’ll need to make sure your bills, like rent and utilities, are paid before you spend the rest freely, but you will still be able to spend without budgeting every dollar.
Check out another anti-budget budget article by the awesome finance blogger and podcaster Paula Pant of Afford Anything- she lives by this strategy and goes into immense detail about it in The Easiest Budget to Follow- Shockingly Simple.
Give this strategy a try, especially if you hate budgets, and let us know how it works for you! It’s nice and simple!