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.
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:
- Figure out what you want your savings rate to be.
- Immediately take that off the top.
- 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.
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.
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.