Hate Budgeting? Here’s The Easiest Budget Ever

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Hate Budgeting? Here’s The Easiest Budget Ever

By a show of hands: how many of you have a budget in place?

Pin drop silence

Yeah, that is what it thought.

Making a budget is one of the most common pieces of financial advice you have heard many times.

There is a small group of people who really love the idea because they love data and crunching the numbers. If you are this type of person, then that is good for you.

Budgeting can be one of the best tools for people who are able to stick to it.

But many people are not able to stick to their budget.

But the good thing is that you don’t need to.

Having to budget means spending time and effort on the process. I consider myself to be a finance enthusiast, but I see budgeting as being arduous, so I try to imagine what it must feel for “normal” people.

Everyone knows that it is a good idea to budget. But this does not change anything.

We should be always wearing sunscreen before leaving the house. We should be driving within the speed limits. We should always be flossing teeth on a daily basis.

Let’s be real.

I will be suggesting an alternative in this articles for people who are Afford Anything and know there is no way they are going to stick to a budget. This is what I consider to be my anti-budget, and it is easy;

Decide on the amount you are interested in saving.

Pull the number off the top.

Don’t worry about the rest.

See how simple that was?

You don’t have to spend a lot of time trying to calculate the amount you are spending on electricity, groceries, restaurants, and clothing. You don’t need to list down your toothpaste, sunglasses, or the time when you went over the top and spent $100 at a bar.

Let’s face the reality, you were never going to budget for the purchases. So when you read the blogs and wonder who is going to do it if not you, just know it’s no one.

And this is the point.

The main goal of having a budget is ensuring that you are saving enough. So the simplest way is pulling the savings from the top, and whatever you have left, you can spend it on what you want.

Saving in this context is those activities that are going to boost your net worth, and they include;

Paying off debt

Investments

Saving in the bank

I am using the term “save” to refer to the things that improve your financial health – and this can be paying off your debt or stockpiling your cash.


Hate Budgeting? Here’s The Easiest Budget Ever

 

Q. What is the right amount to save?

My belief is that EVERYONE should be saving no less than 20% of your income. If your goal is achieving financial independence, then you should be aiming for about 50%.

 

Q. That’s crazy.

You can boost your savings this month by just one percent. To calculate the one percent, just look at your income and go two decimal points to the left.

If you are earning $3,000, one percent is $30

 

If you are earning $5,000, one percent is $50

 

If you are earning $10,000 one percent is $100

 

Boost by one percent the next month. Do it for the following months, and within a year, you will be saving 12 percent of your earnings. If you continue with this trend, then you will find yourself saving 24% after two years.

 

If you do this for about four years, you will be at 50% of your income.

 

You can join the One Percent Challenge Group on Facebook and chat with other people doing it.
 

Hate Budgeting? Here’s The Easiest Budget Ever

Q. I cannot save because I need every dollar

What you are trying to say is that you are earning $3120 every month and your total expenses are $3120. I really doubt this.

 

If you feel like you can’t save because you don’t have anything left, start by saving one percent.  Another option is trying to earn one percent extra every month.

 

If you are earning $3,000 every month, then the one percent is just $30. How can you earn an extra $30? Can you tutor some kids in your neighborhood? Can you do some freelancing gigs?

 

The next month, you can find a way of adding another $30 in extra income, and then do the same the month after. Within three months, you will have boosted your savings by three percent (In comparison with your current income), without having to make any changes to your lifestyle.

 

Q. What should I be doing with the savings?

Here is a good plan;

 

Get the 401k employer match (if applicable)

 

Save an emergency fund of about $500

 

Pay your debt that has an interest of more than 8 percent

 

Boost the emergency fund so that it is the same as three to six months of your expenses.

 

You can then split the remaining savings between your retirement plan, and other investment (such as rental properties), and other long-term life goals you might be having (Going on a trip through Europe for a couple of weeks or even months)

 

Q. What tools can help?

Joining the Facebook Group is a good idea because it has a lot of invaluable resources, and people who are both smart and interesting who have ideas on cutting cuts, earning more, and investing.

 

Digit is a great tool that can help in scanning your bank account, and look for your spending patterns, then withdraws a small amount of money – 1$ here, $3 here – and put it on your savings. This will go on in the background, and you will be surprised that the small amounts add up to hundreds of dollars in savings. The best part is that the tool is FREE.

 

The Anti-Budget philosophy needs you to pull the savings off the top, so you should consider the auto-transferring part of the paycheck to your savings account or a different account on your payday.

 

If you are a couple with dual income, you can mark one person income as “savings” and the other person’s income as “spending”. If you see this as being too extreme, you can mark every other pay as savings, then start increasing it by one percent monthly.

 

And that is all you need to do. There is no need for a billion tools. Keeping it simple is the best option.

 

You should not be complicating your life with different tools and services or budgeting. Just make it simple. Save off the top, then enjoy what is left.

 
Digit is a great tool that can help in scanning your bank account, and look for your spending patterns, then withdraws a small amount of money – 1$ here, $3 here – and put it on your savings. This will go on in the background, and you will be surprised that the small amounts add up to hundreds of dollars in savings. The best part is that the tool is FREE.
 
The Anti-Budget philosophy needs you to pull the savings off the top, so you should consider the auto-transferring part of the paycheck to your savings account or a different account on your payday.
 

If you are a couple with dual income, you can mark one person income as “savings” and the other person’s income as “spending”. If you see this as being too extreme, you can mark every other pay as savings, then start increasing it by one percent monthly.

 

And that is all you need to do. There is no need for a billion tools. Keeping it simple is the best option.

 

You should not be complicating your life with different tools and services or budgeting. Just make it simple. Save off the top, then enjoy what is left.

Author: Will Robins