Preparing a detailed budget and budgeting consistently can be laborious for women who are always on the go. I prepare a budget to be sure that all of my expenses are covered and accounted for and to keep track of how much is being saved each month. My simple budgeting spreadsheet is more for informational purposes than anything else. I’ve tried the detailed line item budget and found that it was tedious and wasn’t producing any extraordinary outcomes for me personally. The traditional budget isn’t for everyone, but there’s another method that may work for women who hate the idea of budgeting.
There are many different types of budgets and budgeting techniques that work well when done consistently. This particular method is often called the “anti-budget”. It’s not nearly as detailed as a line item budget. It doesn’t break down into specific categories quite like the 50/30/20. As a financial coach, I now use a version of this strategy. However, I do use my spreadsheet to be sure that all of my expenses are accounted for and paid out automatically each month. After the initial setup and a few calculations, the anti-budget requires little to no maintenance.
Take home pay – savings – expenses & debt payments = spending money
That’s it. To make the most of this method and to make it work for you, I would suggest that you:
- Figure out how much you’ll need to have available for your bills and set those payments up to be withdrawn automatically if possible. If you’re not comfortable with autopay, schedule out some time each pay period to submit payments.
- Set a savings rate for yourself. 10-20% if you can afford to do so and still meet your obligations, or set a flat dollar amount to save each month. Save this amount upfront. Have it deposited directly into your savings account on payday and leave it there. This is important!
Once these things are taken care, then feel free to spend the rest as you see fit. If there is money left over at the end of the month or pay period, consider adding that to savings as well.
It is worth noting that this strategy may not work as well if you have trouble with overspending and/or if your expenses are higher than your income. If this is the case, take some time to develop something more structured and disciplined until you have a plan to decrease your expenses and have built up a savings cushion. Otherwise most, if not all, of your income will be used to cover expenses. This will keep you in the habit of saving whatever is left over rather than setting aside savings before doing anything else. If you’re having trouble and need to cut expenses/spending, do that first before trying out the anti-budget.
To recap, remember these do’s and don’ts for a successful anti-budget:
Do put aside savings first. Calculate how much you’ll need to cover your expenses and debt payments each month, figure out how much you’ll save, and save that amount before doing anything else.
Do automate as much as possible and as much as your comfort will allow. Automate your bill payments and savings deposits to save yourself some time.
Don’t dive into the anti-budget headfirst without some preliminary analysis. If done properly, or unless income or expenses change, these calculations will only need to be done once.
Don’t attempt this strategy without first addressing any cash flow issues that you may have. If you know that your outflow is greater than your inflow, try a more detailed approach first.
Do get comfortable with the idea of paying yourself first. Remember the formula.
Take home pay – savings – expenses and debt payments = spending money
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