Don’t tell anyone but, budgets trigger the heck out of me.
I know that I’m not supposed to admit that. I mean, after all of my experience in corporate finance as well as time being a financial advisor, you would think that I would have learned to love budgets. Honestly, I wish that I did love them. But really, I don’t.
The truth is that budgets actually trigger the heck out of me and I find myself spiraling down this rabbit hole of insecurity and scarcity and asking myself questions like:
What if I only have 200 more bucks of disposable cash for this week? What if I wanted to go out to dinner one night or pay a bill early? What if…
Here’s what I want you to know about budgets. Budgeting is a system that works for some of us. Others? Maybe not.
If you find that budgets don’t work for you, maybe you need a different system.
For me, I find that planning at a higher level has much more flexibility and allows me to spend my money as I wish.
I have a super simple spreadsheet where I track which bills that I paid for the month. I also keep a high level spreadsheet which shows my total income minus my expenses. Why do I do this? Because otherwise I will forget to pay my bills and loose track of my bills. And then, I will beat myself up about it. So, spreadsheet it is.
My point is that having a budget doesn’t make you a better planner or even more wealthy. A budget is just a system that works for some people. And if it doesn’t work for you, then you need to find a system that does. I think that focusing on a higher level money review is more helpful than trying to balance your account to the penny.
My super simple way of “budgeting” is looking at all of the money going out vs all of the money coming in. I call this the Anti-Budget.
Another way you can say it is:
Income - Expenses = Leftovers
I love leftovers! One of your financial goals each month might be to just have leftovers in your bank account. If you already have left overs, then have a goal to have at least to have $500 or $1,000 of leftovers. Pick a number that will stretch your budget a bit but won’t leave you resentful of your money each month.
Some banks give you this information automatically, or after categorizing your expenses. Check your online dashboard to see what kind of budgeting tools your bank provides. If you can have the bank do the hard work of categorizing your income and expenses, it’s one less thing for your to do.