Take the stress out of budgeting and adopt the no budget system. Prepare to take control of your money and secure the future that you desire. You don't have to go to college for accounting to learn the basic ins and outs of this simple yet effective budget trick.
You know those memes that say "everyone hates math until their paychecks are short and then everyone turns into a mathematician." That was me.
That still is me.
And while there are many other budget systems that you can look into, this one allows for the most freedom, while giving you control over what is happening in your bank account.
Keep reading to learn how you can start budgeting without a budget, and what are a few things you should keep in mind before you begin.
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What is the "No budget" budget?
It is being able to add up all of your expected expenses within a pay period and subtracting it from your income.
The money that is left over is yours to do as you please.
Who is this method best for?
People who are uninterested in dividing their money into specific categories.
This is different than using Cash Envelopes for example where the entire budget system is built on categories. (Sinking funds, miscellaneous, fun money etc.)
Cash Envelopes - Separating your cash into different pouches. If there are $50 put away for groceries that is what you should spend.
Cons of this method
You have to hold yourself accountable. It can be easy to spend all of the money that is left over instead of trying to consciously save.
For someone who is just starting out with budgeting or is beginning their journey of money awareness it may not be the easiest route to have less structure. Our spending habits make or break our budget.
Do you track your money?
Yes, but not because it's divided into categories.
By writing down your purchases, or at least being mindful of what you spend, you'll know what you have left over in your bank account.
There are no surprises in your bank account when you write down your purchases.
How do I save money with this method?
Pay yourself first. This doesn't have to be a huge amount, even $20 prior to paying bills can jump start consistency.
Using auto-save will allow your account to automatically withdraw as little as $1 a day (depending on your bank branch) to be placed into your savings account.
How do I know if this budget works?
Becoming more aware of your financial habits makes it easier to set financial goals.
It'll become clear what you are spending (unnecessary) money.
By adding up your expenses and actually seeing how much money you have left it should also let you know if lifestyle changes are needed.
It poses the question of if you are living within your means.
Also look into the 50/30/20 budget!
Think of why you want to use a budget
Budgeting, whether you use the No Budget- Budget or any of the other stricter methods of tra