- I have never been able to stick to a spreadsheet or a budget app, so I have developed my own system.
- My husband and I work together to set financial goals and then set our spending levels accordingly.
- We also check our bank balance regularly so we know how much is coming in and out.
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As a personal finance writer, the benefits of budgeting make up a solid 75% of my financial advice. Unfortunately, when it comes to taking this advice myself, I have tried and failed on many occasions. With dozens of budget apps and shareable spreadsheets at my disposal, I do not have a single good excuse for these errors.
However, I am not the only one who is to blame for my family’s lack of budget. Although my husband is usually more optimistic in this regard and always seems to have a new, new budgeting app he is sure is changing our lives, he typically gives up as soon as the first tension is also worn out. But I have accepted our limitations, because if I had to distill the other 25% of my financial advice, it would be: “Know yourself.”
Why traditional budgeting never works for us
Right or wrong, personal finance writer or not, I have accepted that I am not someone who will track my monthly expenses on a spreadsheet, in an app or in a leather-bound journal, and check them accordingly. Traditional budgeting is not something for me. I find the apps that connect to our bank account and break down our expenses with a handy pie chart, more soulful than useful. For while my husband sees “Target” and thinks “Olivia’s happy place,” I see ”
, back-to-school supplies and definitely a face contouring kit whose marketing team really knew what they were doing. “We end up arguing, and since the app that was supposed to facilitate our conversations is mostly to blame, we never need it again.
I know that not everyone can relate to our struggle. Many people have a budgeting app they swear by or they spend Thursday night with their partner and a bottle of wine that pores over a shared spreadsheet. But if it’s not you – if you deep down acknowledge, as I did, that you will never magically awaken the kind of people who can draw every single dollar for your name and a plan for how you will use it – I will share with you the three ways my husband and I have overcome our inability to spend a traditional budget while being financially viable.
Our 3-step alternative to traditional budgeting
Setting financial targets
While examining the details of our spending usually leads to arguments, and we swap Thursday night with a spreadsheet for a lavish drama each time, it requires that we stay in financial shape, that we spend at least some energy on strategy.
For us, the first part of creating an objective strategy begins. If you have a few thousand dollars saved before the holiday is your financial goal, you do not need to mark a spreadsheet to get there; you can simply set aside $ 150 a month. A spreadsheet can help you organize your strategy, but if it’s not for you, create a monthly money transfer to the appropriate savings account and move on.
For your financial goals to work, however, they can not just be lofty ideals, they must be at the center of how you spend your money. For my husband and I, our financial goals determine our financial priorities, and although these priorities may never be written into the law in the form of a traditional budget, they translate into our choices. First, we pay our bills. Then we put money towards our financial goals (pension savings, pool fund, vacation, etc.), and any money we have left over determines how often we order take-away and whether we get toilet paper from the brand that month or not. .
2. To be aware of our financial situation
This method, of course, presupposes that we want money back to live on when we take care of our bills and financial goals. This brings me to the second thing we do instead of a traditional budget: We make sure that our economic goals are determined by our economic realities. This is where the personal finance gurus encounter heavy sighs and mumble, “Yeah, that’s what budgets are supposed to do,” but I will continue to ignore them and tell you what my husband and I are doing instead.
Every time our financial situation changes, we do the math. For example, if one of us gets a raise or a student loan comes out of deferral, we pull up a spreadsheet and calculate how this will change our finances. We rarely do this for all the same reasons we can not keep to a budget, but a rough overview of our position works for us because a rough overview allows us to calculate how much money we earn and how much we typically user. We have this number in mind when we set our financial goals and take on new bills to ensure we always have enough to live on each month.
3. We keep a close eye on our bank accounts
I recognize that this loose system of thirds – bills, goals, and living expenses – may sound ruthlessly abstract, but my husband and my lack of a traditional budget does not mean we survive on hope, prayer, and a complicated network of credit cards either. We keep track of our finances; we just skip the budget part and get our numbers directly from the bank. We do this by regularly checking our bank balances and signing up to have alerts sent to our phones whenever money comes in or out of our accounts. This tracking method keeps us aware of the details of our real-time financial situation.
I see traditional budgeting as a very effective middleman, which means that by cutting into it, I myself agree to track and organize my money. This practical approach to keeping our money on track in the context of our broader financial position, all in the service of our economic goals, serves as a living budget. While this living budget does not have a stamp of approval from the conventional wisdom that a traditional budget has, it works really well for us in a way that traditional budgeting never did. And in the end, the best budget is what you actually want to spend, even if it’s not a budget at all.