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.
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 tracking your money, can be challenging. Sometimes it feels nice to go out, spend money and toss your budget to the side.
It's the joy of retail therapy before the consequences begin to show.
To combat this you can think of your "why", the reason behind this new path.
It helps to keep you grounded and motivated. The other side of budgeting, the debt free big savings and investment side, is beautiful, and your why will help you get there.
Lifestyle changes to implement
Set boundaries with yourself. Reduce eating out, use cheaper transportation, and limit emotion driven purchases, you may find room for more opportunities.
Having a gym membership that you haven't used in months, will not motivate you to go. In fact it could stump your fitness journey because you know that you can always go next month.
Of course some subscriptions may be necessary and if that is the case, try to resist the urge to sign up for more.
Increase your income
If you notice that your problem is not your spending habits but the overwhelming debt that you have from past decisions, then you may need to consider gaining a second source of income.
As you decide which route to take. Take a second and factor in what your schedule can handle.
A) Picking up an additional shift at work, may help if you are able to comfortably factor it in.
B) You can also look into passive sources of income.
I launched a digital Etsy shop with printable grocery/meal templates in an effort to boost my income without overwhelming myself.
C) Consider selling items.
You'd be surprised how much stuff you can sell online using Facebook Market alone.
Make it work for you
Every blog post, podcast, Instagram page and book should be taken and tweaked to fit your own life.
Instead of making all of your remaining balance something that you have access to, you can begin to carry cash. If you leave your debit card at home and only bring $20 outside, that is all you have to spend.
In conclusion, budgeting does not have to be complicated. Try this method and if it doesn't seem to work for you, then simply move to the next one. This was only one of many other systems out there.
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