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Why Traditional Budgets Don’t Work

I’ve never really ever stuck to a budget because I tend to rebel against them. No matter how hard I try to plan my finances down to the most minute detail, I can’t.

This is partially because I run a business so my income is different each month. It’s also probably because life doesn’t work with minute details. Life is messy.

Why Traditional Budgets Don’t Work

In fact, I personally find that the more I try to “budget” in the traditional sense – meaning I’ve allotted a fixed amount or percentage for certain things –  the more I fail at it. I fail because life starts to suck and it goes against my need to feel freedom. Meanwhile, when I try other options – many of which I will mention in this blog – things tend to go smoother. It seems to me that traditional budgets don’t work for the majority of people out there.

traditional budgets don't work3 Methods to Try Instead

If you’re a rebel like me or you just can’t wrap your mind around how to spend less than $200 on groceries each month, try some of these on for size.

Paula Pant’s The Anti-Budget

Paula Pant of Afford Anything often times refers to an anti-budget. It goes a little something like this:

  1. Figure out what you want your savings rate to be.
  2. Immediately take that off the top.
  3. Do whatever you want with the rest.

It’s an easy way to ensure that you are meeting your savings goals without feeling so constricted. You have wiggle room, which is what a lot of budgets miss out on. If after you’ve taken care of your savings you’ve got money left over to buy that latte then buy the freakin’ latte.

Values Based Budgeting

Values based budgeting is the idea where you spend and save money according to what you value.

This one has been the real game changer for me because it helped me realize that freedom to me simultaneously looked like saving for emergencies and having a travel fund. Essentially, it taught me that the two could coexist.

Additionally, and perhaps more importantly, it’s helped me save money because I avoid spending on things I don’t really care about or simply don’t make sense for me right now. For example, I don’t really value a car, so I don’t have one. The money then goes toward things I do care about, like travel or back into my business.

Again, this form of managing money paves the way for more flexibility. I don’t have to feel guilty about my yoga studio membership or organic food because I place a high value on health. Meanwhile, I can rest easy knowing that I’m saving money for emergencies by not spending money on things I don’t really care about.

Zero Sum Budgeting

Zero Sum budgeting has also been helpful to me because it takes the thinking out of the equation. I pretty much pretend to have a “zero” balance every month and it allows me to throw a bunch of money into different savings accounts.

Did I make an extra $1,000? I already know to split that up between savings ($300), retirement ($300)  and my travel fund ($300). Maybe I’ll give myself $100 in my “fun money” account depending on the month. Again, this is to give myself some wiggle room.

Some months I’m saving more than others, but again that’s to be expected with variable income. The point is I’m maximizing as much as possible with what I have.

Final Thoughts

Even the most the most rebellious people can manage their money in a way that works for them. By implementing some of these strategies budgeting no longer seems like a drag.

When traditional budgets don’t work, what method do you find yourself using?

This post was written by Amanda Abella, a business coach for millennials, speaker, and best selling author.

Budget Money

AUTHOR Derek Sall

Derek has a Bachelor's degree in Finance and a Master's in Business. As a finance manager in the corporate world, he regularly identified and solved problems at the C-suite level. Today, Derek isn't interested in helping big companies. Instead, he's helping individuals win financially--one email, one article, one person at a time.


  1. As a budget nerd myself, I appreciate the way you framed the problems with budgeting, Amanda. I utilize a hybrid system of zero-based and values-based budgeting myself. Unfortunately, a one-size-fits-all budget approach just doesn’t work.

    When I coach individuals to build a budget, it is a gradual process of trimming away the fat. As you said, it is all about finding a method that works for them.

    • Great point FS. Trimming the budget should be gradual. Not too many people can go cold-turkey with changing their habits. Thanks for reading!

  2. Your Mint looks like my Mint. 🙂 I use it to track spending, not to control it.

    Thanks for sharing the other strategies. I’ve never heard the term anti-budget, but that’s essentially how we do it.

    Retirement accounts are maxed out pre-check, and I have a monthly allotment to the taxable account. What’s leftover is what we live on. Big expenses like a replacement vehicle or kitchen remodel are allowed to interrupt the taxable investing temporarily.


    • Hi PoF! I hear of a lot of PF bloggers that max out their retirement accounts – I’m really not a huge fan of this (due to the money being tied up till I’m 60 and that I have very little control over the stock market). Do you invest in other areas as well?

  3. Of the three options, zero sum budgeting is what we adhere to the most. We live on a variable income right now, we have some fixed expenses but any additional money left over wither goes towards the mortgage or the new business we just launched.

    • Yup, sounds perfect, Josh! For Liz and I, we are really enjoying our real estate income and would like to buy another place with cash. In order to save up enough to buy another place in a year and a half, we’ll have to save a pretty good chunk of cash each month. But, by knowing what we need today, we can more easily set aside the cash and plan for our investment wants in the future. 🙂

  4. I used to fail big time as a budgeter in the past. In my experience, it’s not necessarily *WHAT* budget you have as much as it is about how mentally prepared you are to follow it. I used to cheat my budget all the time, and virtually any budget can be cheated. Really, with whatever budget you follow – as long as you DO IT, understand why you’re budgeting and actively recognize the warning signs of cheating that budget, you’ll wind up saving some serious cash in the end. 🙂

    • Good points Steve. I personally like the “save first, spend what’s left” method. It’s a pretty easy visual of what’s left in the account and you end up saving exactly what you planned on for the future.

  5. I think my budgeting is a combination of some different approaches and it allows me to have some flexibility yet still reach my goals. I have my fixed costs accounted for, and automatic savings/investment transfers that occur at specific times. I know approximately how much my groceries will cost each week, so I account for that. With the money remaining, I give myself a cash allowance each week for smaller purchases I don’t want to think too hard on. I have a note in my phone showing my accounts and every so often I review my balances and upcoming expenses, and if there’s extra money I put it in my savings. Seems to work for me, I’ve been growing my net worth consistently without feeling deprived or overly stressed about money.

    • Sounds like a pretty good method, Giovina! Thanks for sharing!

  6. I find myself using a mix of value based budgeting and savings off the top. Savings are the first thing that comes out of my account and they go into savings buckets based on things that are important. The rest of the chips fall where they may each month.

    • Yup. Sounds like a good mix to me! Liz and I are going to start taking a little bit more off the top to force ourselves to save more aggressively for the next rental! The passive income is intoxicating! 🙂

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