How I Track My Money (and Still Save) Without Using a Budget

by Miranda Marquit · 7 comments

I’m constantly asked to describe how I budget my money. When I talk about my budget, though, I refer to it as my “no budget” budget plan, or just a spending plan. This is because I don’t budget my money in what we often think of as the traditional way. I don’t have a list of categories, and I don’t start out my month by giving each dollar a job.

So how do I manage my money if I don’t practice traditional budgeting? Here is a quick peek at how I create a “no budget” spending plan.

Budget Plans Can Be Customized

Part of my aversion to the traditional notion of budgeting has to do with the fact that I have a variable income and I’m never quite sure when I’ll receive money. I also can’t count on how much each payment will be when I do get paid.

I also feel that traditional budgets,- with the categorizing ahead of time, are limiting. What if I want to go out to eat again this month? Well, the money budgeted for that category is gone, so I can’t unless I move the money from some other category.

I prefer to have a spending plan based on my family’s personal needs and that’s customized to fit us. We pay for our priorities first and have a system that allows us to have a hands-off approach to managing our money. Here’s what I mean:

Prioritize the Important Stuff

My finances are automated for the most part. The most important items on my list are taken care of on a monthly basis and automatically deducted from my account.

Long ago, my ex-husband and I figured out our priorities and our automatic withdrawals reflect those priorities. Items that are automatically taken out of our account each month (and automatically accounted for in our personal finance software) include:

  • Charitable donations
  • Retirement account contributions
  • Rent payment
  • Insurance premium payments
  • Student loan payments
  • Car loan payment
  • Emergency savings (small amount to high-yield account, greater amount to taxable investment account)
  • Amount to be used for quarterly tax payments

Basically, as long as those things are covered, we don’t worry about budgeting the rest of our money. The important things are covered and we spend what’s left until it’s gone. If we have a specific goal (like I’m planning a trip or my husband wants to buy the latest to-scale depiction of a superhero), we set aside a little for that in the course of the month.

Traditional Budgets are Limiting

For the most part though, we don’t worry about whether we’re keeping within a certain amount on groceries each week, and we don’t worry about whether or not our entertainment “envelope” is approaching empty. We just spend the money on the things we like (or we don’t, and we have a cushion that carries over), and move on.

Of course, this type of approach means we do have to track our spending to make sure we aren’t overdrawing our account.

But, due to the fact that we often use credit cards (for the points) on our every day spending, we don’t usually worry about overdrawing the checking account. We just pay off the credit card when the money comes in, and as long as our priorities are covered, we don’t focus on every single penny that’s going out.

What kind of spending plan does your family have? Do you create a custom-fit budget based on your priorities?

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  • Norma L says:

    I have been using a spending plan for about 10 yrs. I tried a zero balance budget at one point but that was too stressful.
    But unlike you, my goal is to have money left over at the end of the month. The more money i save, the sooner i can go on my wild vacations!

  • Emily says:

    We use a budget. Without it we spend way too much on restaurants and entertainment. Sometimes we go over budget and we either do nothing because it will even out next month, reclassify some expenses somewhere else, or, my favourite, just change our budget to better reflect how we want to spend our money.

    It’s awesome that you guys have found such a no hassle system that works for you!

  • Dewald says:

    I have never been the best person to ask advice on budgets. I always spend everything as soon as I get paid.

    • Paul says:

      …and the reason why you probably, on the whole, need to budget. Seems to me like you spend and then 1/2 way through the month start to panic because there is 1/2 a month to come. Duh!

  • Jonathan says:

    The title of this blog post really caught my attention. Like you myself and my wife for many years have adopted the exact same approach to budgeting

    Once priority automated payments have been taken from the account we are essentially left with money required for food and petrol purchases and then whatever else we want!

    Personally I think this approach works brilliantly and saves time recording every single possible transaction.

    Ultimately if your key bills have been paid for including a healthy savings stream then what else is there to budget. You have to enjoy life as well as being thrifty with your money.

    Excellent post!

  • DealForALiving says:

    I’m with you on the topic of budgets. I can’t imagine beginning the month by saying that I’m going to give myself a budget of $80 for gas or $20 for coffee – that’s so limiting and just doesn’t jive with my personality.
    My time and attention are spent on making more money so that I can let the chips fall where they may and as long as I have positive cash flow, I’m happy.

  • Mrs. Frugal says:

    We follow a very similar method as you–we don’t have a budget (and never have). Instead, like you, we have financial goals that guide our spending practices every month. We buy everything on credit cards (for the bonus rewards) and then pay off every card at the end of the month. We also review all of our purchases at the end of every month to ensure we’re hitting the savings rate we want to hit (somewhere between 65%-85% saved). I’m glad to hear we’re not the only ones without a budget :)!

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