If I’m being completely honest, I don’t really follow a budget. Now, that’s not to say I don’t know where my money goes, don’t save and spend frivolously. In fact, I do the opposite of all of those things. But an actual budget? I’ve just never really taken the time to create it and follow it. It seems too time-consuming and stressful, and I personally like my method of managing money. It’s allowed us to save, move across the country, invest and work for ourselves. Not to say not having a budget is for everyone, but here’s why I don’t follow one and what exactly I do instead.
Why I don’t follow a budget
Ok, strict budgets just seem too confusing. If I go out to eat, does that go in the food category, the entertainment category or the fun category? Or are the entertainment and the fun category the same? What if my electric bill is more than I budgeted for? Do I take it out of a different category, and if so, which one? What if I run out of diapers for my girls? This isn’t an expense I’m going to go without, so where do I get this money from?
Too many categories, too much room for error, too much thinking. If I’m going to do something fun, like take a visit to the pumpkin patch or go on a day trip, I don’t want to stress about the budget. It would take all the fun out of whatever it was I was doing! Also, what if I budget $40 for entertainment and then don’t use it? Do I roll that over to next month or save it? Or…do I spend it anyways and “force” myself to do something even though I didn’t really want to?
See – confusing.
I came across an article on Inc.com titled “5 Frugal Millionaires and Their Best Advice” and I couldn’t help but notice what millionaire #5, Matthew Tuttle, said. “What I am much more a fan of is, save as much as you can, and if you’re saving as much as you can, as long as you’re not going into debt, then I don’t necessarily care where you’re spending your money.” – Matthew Tuttle
Yes, yes, yes! This is exactly my philosophy. Instead of trying to monitor every dollar and set tons of restrictions on yourself (do I want $50 in clothing and $100 in entertainment, or $75 in each?), I just try to save as much money as possible. The rest of the money I can spend as I please.
I’m sure some people will disagree and say that if you ARE on a budget, you will SAVE even more. While I do believe this could be true, it’s not worth it to me to save an extra hundred bucks or so. Plus, I really think I save MORE money by doing it my way
How I save money each month
As I said above, my husband and I both work for ourselves. I get paid twice a month – but it’s a different amount every month. My husband gets paid as he completes jobs. This can range from a few times a week (like this week, woo-hoo!) to once every few weeks. This makes it extremely hard to budget (plus I hate to budget anyways!), so here’s what we do instead (or, if you like to budget, here’s how to simplify your budget):
Do not impulse buy. We buy things we want, sure, but we discuss it first and plan on buying the item before actually buying it (I would say this is true about 90 percent of the time). I spent about $100 this year on fall decor (when we moved, my holiday decor was one of the things that didn’t fit in the moving truck), but we knew I was going to spend that. I also purchase a few of my favorite Bath & Body Works candles each season. John and I discuss these expenses and plan for them. Easy peasy!
Buy items on sale and generic when possible. Want a great way to save money? Only buy what’s on sale (every item at the grocery store has a sale cycle – typically once every 6-12 weeks the items go on sale, watch for this and stock up!!) and buy generic when possible. You don’t really need name-brand milk when the store-brand is equally as good. Same goes for cereals, breakfast bars, snacks and even sodas.
Have a savers mentality. John and I both try to live as cheaply as we possibly can. We eat out on occasion and pick less-expensive restaurants, we love doing free activities with the kids such as going on walks, going to the park and going to the library. We make our coffee at home instead of going to Starbucks every day, John brings his lunch to work and I eat at home, and so on and so forth.
How much do we save every month?
Well, since our income varies, what we save every month varies (and being honest, we haven’t saved anything since moving to NC). This is what we do though:
- One of us gets paid
- We pay all bills that we can, even if they’re not due for a few weeks
- We leave $100-$200 in our account for groceries, gas and living expenses
- We transfer the rest into savings
- Repeat, repeat, repeat
See, told you it was easy! No budget, no late bills, lots in savings!
Note: If you have a spenders mentality, a budget is probably necessary.
What do you guys think about not having a strict budget, or any budget at all really? Are we nuts for paying bills and transferring almost everything that’s leftover into our savings account?