Do you absolutely hate budgeting? What if I told you that you could forget about budgeting, but still achieve all of your goals and dreams? You’d sign up for that right? I know I would.
My Love, Yet Hatred For Budgeting
I never really used to mind budgeting because I knew that if I stuck with my plan, that ultimately I would be financially free and happy with the end result at retirement. The part I absolutely hated about budgeting was the feeling of constriction! If it was nearing the end of the month and my friend wanted to go snowboarding, I had to check the “entertainment fund” and if there was nothing there, I felt like I had to say no, even though there was $3,000 in my account. I had to stick to my budget.
Forget About that Stupid Budget in 2012
Starting in January, my wife and I plan to throw away our budget and not look at it until 2013 (if necessary). “How in the world do you plan to hit your goals?” you might ask. “You’ve always taught us that without a budget, it’s almost a certainty that you’ll fail.”
I still stick by these words, and we still do have a plan, but it’s just not a traditional budget.
With a typical budget, you need to think of every single expense for the year, write them all down, and then figure out how much money you can spend in each category for the month. Every dollar must be accounted for. We tried this, but have finally decided that it’s not realistic.
Our audacious goal for the next few years is to pay off our mortgage. We have about $69,900 to go, but by putting an extra $1,200 toward the loan each month, the debt will be paid off by July of 2015! Rather than break down all of the other goals into individual compartments, we plan on focusing on just this one.
Also, we know that we need to beef up our emergency fund in case something goes wrong with our vocations, our house, or our vehicles. So, that is also something that needs to be done in the near-future.
Here’s the Plan
At the beginning of each month, we’ll have 3 automatic deductions from our account: 1) the regular mortgage payment, 2) the extra $1,200 payment, and 3) a set amount (most likely $400 or so) that will get transferred from our checking account to our emergency savings account.
After the deductions, my wife and I will just live on whatever’s left! That’s the plan! If we really want to go out to eat 6 times that month, then that’s what we’ll do, but if the money dwindles we might need to live on cheese and crackers until we hit the 1st of the month again! It’s simple, but I think that it will be extremely effective. Plus, we’ll be able to focus on our main goal rather than all of the pointless tiny ones within the budget.
What do you think about this goal? Have you ever tried anything like it?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.