The Anti-Budget Budget In Your Thirties

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:

  1. 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!

 

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Budgeting in Your 30’s When You Hate Budgeting

For all the writing I do about finance and money goals, I really hate to budget. I just can’t stand it.

Perhaps this is because I’m already a big saver, so when I want something, I usually REALLY want it, and not much is going to stand in my way. I hate not listening to my own written budget, but I wouldn’t listen if I really wanted something badly, so I feel like I’d probably go over budget lot of the time, and then I’d kick myself. Ok, so this is actually a self-control issue. :/

I walked around forever with budget hatred burning a hole in the pit of my stomach until recently, when I read an article and realized I’d been kind of following an unofficial budget strategy all along. I googled the info in that article and came upon even more articles that outlined alternative budgeting strategies. Turns out, I naturally follow a common budget strategy called the 80/20 budget, though my version is actually a 70/30 budget.

The 80/20 budget is basically the simplest and least detailed way to budget ever. And I love it, because the details of budgeting make me nuts. Here’s how it works: when you get a paycheck, 20 percent goes to savings. The rest is fair game to divide between needs and wants. That’s it.

This is kind of amazing if you’re never sure how much you’re going to spend in any given month- no matter what, you’ll still be saving. I do a 70/30 budget, or actually a 70/10/10/10 budget, which is only slightly different than the 80/20. The way it works is:

  1. I get a paycheck
  2. I put 10 percent in my retirement account immediately
  3. I put 10 percent in my savings account immediately
  4. I put 10 percent towards my student loan immediately (this is always in addition to the minimum monthly fee I pay)
  5. Then the other 70 percent is divided as best I can among EVERYTHING else without making a budget.
  6. Within the 70 percent, my NEEDS include: Rent, utilities, and student loan minimums (definite needs), as well as food, metrocards (transit), laundry money, and toiletries.
  7. Also within the 70 percent are WANTS including: eating out and or/drinking with friends, food and coffee and green juice splurges, new shoes or clothes, tickets to theater, subscriptions to Spotify and Hulu.

Don’t get me wrong- it’s probably best to actually budget everything out little by little with a food budget, a clothing budget, and an eating out with friends budget. But I’ve never done this, and I don’t know if I’d stick to it if I did. So I think it’s better to at least have SOME sort of budget! And with the 80/20 (or 70/30, or even 60/40) budget, you’re at least still saving. If you don’t have students loans, I’d recommend putting at least 10-15 percent of your paycheck immediately into your retirement account, and then 10-15 percent immediately into a savings account.

What’s funny about taking a certain percentage out of your paycheck right away and paying down a debt and/or putting it into savings is how little you notice that the money is gone. It’s a strange phenomenon! Try it if you don’t believe me. Take 10 percent out of your paycheck immediately each month and put it into savings…you probably won’t even miss it! And if you do, you can always take it back. I wouldn’t recommend it…but the whole point is that your savings account belongs to you! 🙂

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The Joyful Paradox of Saving and Spending In Your Thirties

Today, I was at the airport, sitting next to a woman who was having an extremely loud phone conversation. She had a strong Irish accent and was discussing hotels with her friend/relative on the other end of the line.

“But is it a 4 and a half star?” she exclaimed,  “I don’t want to be in another one of those low category hotels like before.” Her companion apparently told her something disagreeable…not about stars, but about price. “It’s $1500 now? Last time it was $1000. It’s going up!”

It’s possible that this woman was referencing a total cost of stay for a weeklong trip. Who knows? But in my head I thought she was referencing a daily rate.

And hotels really can run into the thousands for daily rates! They can actually get much pricier, especially when suites are involved! Those kinds of crazy high hotel prices don’t even require that great a stretch of the imagination! A friend of mine works at a hotel and she’s seen rooms multiple times that price.

How dare hotels charge those kinds of wild rates? That’s easy- because people will pay them.

Cost is relative. The woman on the phone at the airport seemed okay paying $1000 as long as the hotel was 4.5 stars or higher. Since the hotel had gone up to $1500, the woman was put off, but she didn’t seem totally averse to the new exorbitant price..because she cared more about the quality of the hotel than about the price.

And so it is with saving and spending…and a lot of life. Pick your battles.

There’s a great quote from the CEO and founder of the amazing home website, Apartment Therapy, Maxwell Ryan: ‘Save more than you spend in a way that keeps you happy and comfortable. You can be comfortable or uncomfortable on any level.’

Yesssss!! Even if you made 500K a year and furnished your Park Avenue mansion with the finest handmade furniture imported direct from Italy, you can easily find a way to want more and more… and still be uncomfortable. And if you made 30K a year and live with 4 roommates in a house in the far out suburbs with no car, you can still find ways to be extremely comfortable (well, you can try your darndest). The key to spending/saving comfort takes both knowing yourself and carefully planning.

As you go through life, you become more familiar with your wants and needs. What’s important enough to you that you’ll budget more money to get it? What can you forsake in order to save? Can you live without staying in a 4.5 star hotel? Are you more into spending most of your budget on dinners with friends? Do you want to shop only organic? Is living in the most popular, convenient (and expensive) neighborhood important to you? Do you value fancy cars? Once again- pick your battles. And sometimes it helps to throw money at problems you’d rather not deal with…

In planning your budget, and saving money, it really helps to know the difference between what you care about, and what you only think you care about. In this way, you won’t be a miserable wreck while saving. Don’t deny yourself your absolute very favorite things! Just find the things you can live without and go without them for awhile as you save. You can do it!

Yep, this is a real underwater hotel in  Pemba Island, Zanzibar. It's called the Manta Resort. And for a cool $1,500 a night, it can be yours!

Yep, this is a real underwater hotel in Pemba Island, Zanzibar. It’s called the Manta Resort. And for a cool $1,500 a night, it can be yours!

Throw Money at the Problem

Right now I’m working an auto show in Detroit.

The day I left to fly to Detroit, I woke up later than I’d wanted to. I’d packed the night before and was mildly exhausted.  After I’d already walked 3 blocks away from my apartment towards the bus to the airport, dragging two heavy suitcases behind me, I realized I’d forgotten my Global Entry card and had to drag the suitcases all the way back home. I live a 15 minute bus ride away from LaGuardia airport, but because of all my delays, I ended up just getting an Uber (these are cabs called from an app, in case you’re unfamiliar with Uber in your city).

I felt sort of guilty about spending $17 on an Uber cab instead of $2.50 on a bus, but the cost of being late and missing the flight would have been much much more. The time, stress, and possibly money spent on a new flight would have been much costlier than just throwing money at the lateness problem.

A much as I love saving money, I’m a big fan of picking your battles and using money when you need to. We have money in order to make our lives easier. Sometimes you need to take that hard earned money and throw it at problems that’ll quickly go away when hit.

Don’t get me wrong- I’m not at all rich…not yet 🙂 If you read some of my other articles you’d know I’m still paying off my student loan debt and definitely am not swimming in money. But a little bit of saving goes a long way toward solving some small problems. Now that I’m thirty, I’ve had a few good years of not desperately eating ramen noodles every day…and I have a slight bit more money to put into my ‘throw money at the problem’ account…which is basically my normal checking account.

Jane touched upon this in her post How Much of Your Life Do You Outsource? She was mentioning how much she hated doing laundry at a laundromat when she had to carry heavy bags. Before I lived in a building that had washers and dryers, I used to pay extra for drop off service at the laundromat a few blocks away. I’d just have the people who worked there clean and fold it. I hated having to go back and forth multiple times to the laundromat…I just wanted to drop my laundry off and pick it up all finished. I used this laundry drop off solution for years- it was worth it to me. I saved money elsewhere…like on taking buses to and from airports mostly. I spent my extra money on laundry problems. And I had no regrets.

Recently, I used another paid service Jane mentioned in her same post– this service is a food delivery program called Blue Apron. Blue Apron basically delivers 3 meals a week to your doorstep- only it doesn’t deliver them cooked and put together. The meals are in the form of ingredients and recipes and you cook the meals yourself. Blue Apron is pretty brilliant in a lot of ways. For one, it basically teaches you how to cook. Secondly, the time consuming act of buying ingredients is out of the picture. Thirdly, you know exactly what’s going into your (fancy) meals.

photo 2 (4)I actually managed to finagle a week of Blue Apron for free. A friend of mine ordered it for herself and loved it. She invited me to try a week of it as a free trial (a special promotion Blue Apron offers which I recommend you look around for 🙂 ). Everyone I know who’s tried Blue Apron loves it. In fact, all the married and engaged couples I met at a BBQ I mentioned in my How To Be A Third Wheel  post were buzzing about using it to cook for their significant others instead of ordering out all the time.

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I enjoyed the 3 meals I received from Blue Apron, and was super impressed with their beautiful delivery and presentation. I learned how to cook three new dishes, and the ingredients were delicious and fresh. However, the cost of 3 meals a week (with 2 servings each) would be $60 a week, which was a bit steep for my tastes. So I canceled the service before I had to pay for it. For me, cooking dinner every night is a problem I’d rather solve with time than money. I know I can cook 3 dinners a week for way less money than $60 and didn’t need to pay for Blue Apron’s services. Still, I think Blue Apron is a great and worthwhile service for certain types of people, the same way laundromat drop off was a great and worthwhile service for me.

Sometimes you just need to throw money at a problem….and sometimes you don’t. Know yourself and your budget. Then choose wisely which one it’ll be.

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