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How to Prosper Financially WITHOUT a Budget

prosper financially without a budgetBudgeting…blagghhh. What a bore. What a hassle. And what a restrictive thing to put on yourself and your family. For some, budgets can actually be freeing – enabling an extreme saver to plan and spend money without feeling guilty. For the rest of us though, budgeting is just a measure of control over a spouse or an annoyance that’s always there to make you feel terrible when you accidentally overspend. Liz and I have decided NOT to meet up each month to talk about the budget. Instead, we’ve actually devised a way to prosper financially WITHOUT a budget.

How to Prosper Financially WITHOUT a Budget

It all started about two years ago. My wife Liz was 7.5 months pregnant with our firstborn, and we decided to go on one last hoorah before becoming shackled down by kids for the next 20+ years of our lives.

Our romantic getaway? Renting a rustic cabin in the Tennessee State Park.

To many of you, this sounds more like hell on earth than a blissful vacation getaway. But wait, there’s more… To top off the romance, I decided to rent out a book on CD for our trip – “The Automatic Millionaire,” by David Bach. ūüėČ

Somehow my wife of just one year refrained from murdering me. Beyond that, she and I both actually learned a tremendous amount from this recording, and we’re still using many of David’s methods in our finances today! It is because of this simple disc that we’re able to prosper financially without a budget, and I firmly believe that you can do it to.

The key? Automating.

Put as much on autopilot as possible, and you’ll have to budget very little – perhaps maybe not even at all.

Here’s how Liz and I operate with our finances. If you hate budgeting and have a fight during every month’s “budget meeting”, then maybe it’s time you try out these methods too!

1) Know Your Average Spend Amount Per Month

If you want to prosper financially without a budget (ie. ignore your finances for a few months at a time instead of tracking every $2 receipt), you first have to know what you spend, on average, each month.

You could do this by:

  • Pulling your credit card and debit card spend for the entire last year and dividing by 12 (and maybe reducing it a bit if you’re starting to cut back on your spend), or
  • Tracking three month’s worth of expenses and averaging them out before trying to automate anything

Either way works. If you want to prosper financially without a budget now, use option one. If you don’t mind waiting a few months and getting a more accurate read of your¬†current spend, then use option 2. But, before you start ditching your budget meetings, you’ve got to know what you’re spending. Skip this first step and you’ll probably stay broke forever… ie…don’t skip this step. Know what you’re spending your money on, and then move on to the rest of the steps.

Liz and I have tracked our spending since we we got married. We combined our finances, set up Mint to see where our money was going, and then we could easily see how much we spent and how much was left. Since we’re both frugal by nature, we weren’t surprised to see that our spend was typically between $2,300 and $2,500 a month (FYI – with no debt of any kind, this is pretty easy to do).

2) Contribute to Your 401k

Liz stays at home with our daughter, but I’m working at a great company that provides a matching 401k. I contribute 7%, and they contribute another 9%. Since this comes directly out of my paycheck, we really never even notice the missing dollars. And, each year, our 401k account rises by another $10,000-ish even if the market does absolutely nothing.

Save on medical expenses

3) Contribute to Your HSA

The Health Savings Account (HSA) is one of the more awesome financial products I’ve ever discovered. My company automatically loads $1,000 in our account each year and we contribute another $200 a month. And get this…

  • It goes into the account pre-tax
  • We can pay medical bills and the money still isn’t taxed
  • It’s not a use-it-or-lose-it system. If I don’t use the funds this year, they just roll into next year.
  • If you beef up your account, you can actually invest the money instead of just having it in a savings account

Sheesh, this HSA stuff is AWESOME! Liz and I have socked away about $8,000 in our account, so any hospital visit (like our future baby delivery…or when my finger blew up like a balloon from an infection 2 months ago…project house sliver…oops!) is covered without affecting any of our bank accounts. When you have a medical emergency fund like this, it becomes that much easier to prosper¬†without¬†a budget.

4) Set Up Automatic Withdrawals For Your Future Goals

This one is key to prosper financially without a budget. You’ve got to know what your future goals are AND you’ll need to automatically disperse that money into different savings accounts. Here are the goals that Liz and I were recently saving for and how we executed the automatic draft:

Save Up For Daughter’s Private Schooling

The public school in our area suuuucks and the private school is excellent (I attended the private school and was far better prepared for college than most of my struggling, stressed-out classmates). However, the private school comes with a price tag of course — roughly $8,000 a year.

Instead of waiting until our daughter starts preschool and making the payments to the school, why not start ahead of time? My wife and I simply set up a savings account and direct $150 into it from every paycheck (which is easily done through my work’s direct deposit system). So far, we’ve already got $2,000 socked away and Addi is barely two years old. Not too shabby!

Save Up For Daughter’s College

The next worry…college. According to my handy-dandy college investment calculator, we need to stash about $150 into the market every month, so that’s exactly what we do.

In Michigan, there’s a 529 plan called the Michigan Education Savings Plan (MESP). We got one started soon after Addi’s birth and set up an automatic withdrawal from our checking account. It happens at the end of each month and we hardly notice it (again, no debt and no payments means we have a pretty hefty bank account and $150 isn’t all that noticeable).

Saving Up Cash for a Rental House

After looking at our income and our typical expenses each month (including all the auto-withdrawals above), Liz and I discovered that we could still sock away an additional $2,600 a month for our next rental purchase. Long story short, we set up the direct deposit from my paycheck a couple of years ago and late last year we were able to buy a crappy-looking $75,000 house (since then, we’ve decided to flip it and use the money for a quicker move into the country – stay tuned for news on this!).

This automatic withdrawal stuff really works! When the money isn’t sitting in your checking account, you never really think about spending it! Meanwhile, all that money just keeps stacking up in your savings accounts – often into tens of thousands of dollars before you even realize it!

5) Earn More and Don’t Upgrade Your Life

You know what I’ve discovered in my 10-year corporate career? Climbing the corporate ladder is pretty easy. Seriously.

Here’s all you need to do:

  • Work while you’re at work (this will put you ahead of 80% of your peers),
  • Always think, “How could I make this job easier?” and do your best to make the process simpler and faster, then
  • Use your extra time to solve problems for the company

That’s it.

It really is that easy.

So, while you’re stepping your way up the corporate ladder and earning a bit more each year, make sure you allocate your newfound raises appropriately. You still don’t need to set up a budget, but be sure to either beef up your existing automatic savings or create a new account that’s important to you (like…buy a boat that the family can enjoy).

Yup. How to Prosper Financially Without a Budget

So there you have it. It IS possible to prosper financially without a budget. We’re living proof of it. Of course, you still need to be proactive and intentional with your money, but at least you don’t need to set up for battle each month with your spouse!

  • Just understand your typical monthly spend,
  • Figure out what’s important to you, and
  • Set up automatic withdrawals from your paycheck for each respective savings account.

Simple simple! And once you get it set up, there’s really nothing more to do! Just enjoy your life, spend what’s in your checking account, and let your automatic withdrawals do the rest!

So what about you? Will you start to prosper financially without a budget?

Battle of the Mind Budget Money


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.


  1. We don’t keep a budget per se, but we do track our spending in a variety of budget categories and establish goals. Every Jan. we total what we spent in each category the prior year and make adjustments to our spending goals for the coming year. Money not spent in a category goes into a reserve fund so that anytime we go over in a category, the money is there to cover it. For example, we might plan to spend $150 a month on electricity. For 7-8 months we might be under that amount, say we spend $100 each month but in the summer it skyrockets due to air conditioning and is $250 each of those 4 months. The $50 we didn’t spend previously is used to help pay the bill We follow the same concept on all other categories we have, with a catchall miscellaneous category in case we really get off track. It helps that my husband was an accountant who doesn’t mind the bookkeeping involved.

    • Sounds like you’re still pretty detailed! And, you have quite a few years under your belt to understand each others’ spending habits (I imagine you’re both pretty frugal). Sounds like you’ve got a great plan that works for you though, and that’s what’s important!

  2. Love your work Derek. Money saving is essential for everyone. As you said you have to take care of the average spending amount per month so you can track your unnecessary expense. This are the small changes helps you to improve your financial position.

    • Definitely! Thanks for the comment, Adam!

  3. Great sharing! I find it difficult to keep maintaining a monthly budget too. The brutal truth is willpower is limited! But I do agree with you that it’s important to know at least how much you spend every month. I normally use a mobile app to track my monthly expenses.

    • Yup. I think my wife have strayed away from the budget a bit too much this past year. Time to get back on track and lay out a game plan! Our new goal is to pay off $23k of mortgage debt in 6 months (well…I haven’t told her this yet, but I’m assuming she’ll be on board – fingers crossed!!).

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