These 4 Easy Steps Will Teach You How To Budget (Finally)
Budgeting is stupid; it's so boring and most of us never stick with it. Let's change that. Learn an easy way to (not) budget in just minutes a month.
Old-school personal finance books tell you that if you just create a budget and stick to it, then—POOF!—all your money problems will be solved. But anybody who has ever tried budgeting knows it’s complete crap.

In fact, only one out of every three Americans creates a formal budget every month.

You know you should budget, but you also know you’re not really going to do it. Learning how to budget isn’t the problem, and here’s why:

  • You can visit any one of hundreds of personal finance blogs to read about budgeting techniques
  • You can download countless other sites
  • You can pick up one of dozens of books
  • You can use any one of dozens of budgeting apps—many free

And even if you write down every dollar you spend for 30 days (which, done manually, is a complete pain in the ass), you’re still human.

Over the past five-plus years, I’ve experimented a lot with budgets. I’ve set monthly budgets, annual budgets, and weekly budgets.

I’ve tracked my spending using paper and pencil, spreadsheets, and apps like And through this I’ve learned something:

Tracking spending manually is pointless

I never keep up. And I’m a financial blogger—a total nerd about this stuff.

If I can’t do it, I don’t expect you to. Monthly budgets are useless because we underestimate our monthly expenses.

There are some things you just have to pay for every month, such as housing, transportation, utilities, food, and debt payments.

Then there are things you pay for less than every month, like car repairs, app德扑圈官方网址home improvements, trips and vacations, holiday gifts, and insurance payments. For you, these less predictable expenses may only be 10 percent or so of your total spending. But for me (especially after becoming a app德扑圈官方网址homeowner) they’ve crept up to more like 30 percent (app德扑圈官方网址home repairs aren’t cheap).

And here’s what this means. Accounting for, and “pre-spending,” every dollar you make can be a financial mistake.

If I take my annual take-app德扑圈官方网址home pay, divide it by 12, and proceed to spend that amount every month, I’m going to be in trouble when that unexpected car repair comes up, or it’s December and I have to do my holiday shopping.

So what you need to do is stop obsessing over the detailed, track-every-penny budgets you’ve always been told were the solution and instead, you need to implement a simple spending plan.

What is a simple spending plan?

A simple spending plan is an easy way to budget that helps you save money, get out of debt, pay your bills on time, and still allows you the freedom to spend money on things you value – within reason of course.

Recently, a funny thing happened to me. I was in the doctor’s office waiting for my physical and I picked up an issue of Money Magazine and randomly turned to a page that actually recommended the same thing: stop budgeting!

As a way to reduce financial stress, the piece recommended to ease off budgeting, saying:

“Money (or its lack) is the nation’s most common source of stress, reports the American Psychological Association. Making a detailed budget — a widely advised fix — only makes things worse, says Cleveland financial planner Kenneth Robinson, based on a decade of work with clients; the problem is that people hate to think about where they’ll need to cut back.”

In other words, when money is tight, focusing on that fact day in and day out doesn’t do you much good. And the magazine’s fix for the problem is the same as mine: a simple spending plan.

Step 1: Track your spending automatically

Budgeting is simple: Subtract your bills from what you earn; save or spend what's left.

Forget about manually tracking every beer and burger. The goal is to set up a system that keeps track of all of your spending electronically without any additional work from you so that you can access it if and when you need to.

You can do this easily by using the single-card method. This is when you use just a single debit or credit card for all of your purchases—or as close to all of them as you can—and let technology do the tracking for you.

One of the best ways technology can help our wallets is by eliminating the need to use cash, and therefore, eliminating the need to keep track of our cash expenses. Now this is counterintuitive to what a lot of old-school financial gurus say about cash helping you spend less.

While that’s partly true, the fact is cash can also get lost and stolen. And, more importantly, cash is on the way out.

Electronic payments are here, like it or not, and the times you need cash (for anything) over a debit or credit card are fewer and fewer. But the best thing about using a credit or debit card is that you automatically have a record of all of your spending.

So should you use credit or debit?

The age-old question. If you have a tendency to buy things first and figure out how you can pay for them later, stick to a debit card. But if you’re comfortable with a credit line and only charging what you can pay back in full each month, credit cards are more useful than most debit cards for tagging and categorizing your purchases.

With most cards, you can also export your transactions to spreadsheet…which, for the nerds like me, is where the fun begins.

Learn more: Find the best credit cards, how to choose the best card for you, and how to use credit cards responsibly

If a single card isn’t for you, use a personal finance management tool.

As an alternative to the single-card method, there are personal finance management (PFM) tools. These applications link to your credit and debit cards, aggregate your transactions, and can even categorize them automatically.

You set spending limits, and they can send an email or text when you hit them. These apps are powerful and effective…if, of course, you remember to login occasionally and make sure the categories are right, and view your tallies.

But even if you don’t, that’s OK. The important thing is that data is there if you need it.

Use Budgeting Apps

When it comes to budgeting, technology is on your side. There are apps that can walk you through the process of setting up a budget, then track your progress. Instead of manually evaluating your spending to make sure you stay on track, an app can monitor your spending and deliver the information to you.

One of our favorite budgeting apps is MoneyPatrol, which connects to all your financial accounts to help you monitor your spending. Just set a goal for each budget category each month and MoneyPatrol does the rest. If you reach your limit in a certain area, you’ll get an alert. At the end of the month, you can review your spending and use the information as you’re setting next month’s budget.

Personal Capital is another great budgeting app to check out. This app is especially useful if you want to add investing to your financial strategy. As with MoneyPatrol, you’ll link your financial accounts to Personal Capital and wait for the app to start gathering data from the money you’re spending. But while you’re budgeting and managing your money, you can also take advantage of Personal Capital’s expert advice to build an investment portfolio.

Step 2: Know your monthly “nut”

Setting up a personal finance app or downloading all of your credit card transactions is great for historical analysis of where all of your money goes. Looking forward, however, this data is less important.

What you need to know are your fixed monthly expenses. Things like:

  • Your rent or mortgage
  • Utilities and insurance
  • Loan payments (student, auto, etc.)
  • Minimum credit card payments
  • Desired savings, investments, or additional debt payments*

That last one is important. It’s vital that you calculate how much you want to save, invest, or use to pay down debt first.

To find what’s left, do the following:

  • Total your fixed monthly expenses (your Nut).
  • Figure out your net (take-app德扑圈官方网址home) pay, per month.
  • Subtract your Nut from your take-app德扑圈官方网址home pay.

This is what’s left to spend, also called your spending allowance (discussed below). You can spend this on whatever: food, gas, beer, travel.

Here’s a snapshot of our simplified version (which you’ll receive when you join our free weekly newsletter group):

 how to budget

Of course, if something big happens, you may need to spend money on that and have less for fun stuff. That sucks, but it’s also why you should have a bank account buffer™.

Then there’s the issue of having NO leftover money.

What do you do then?

OK. Deep breath.

If money is tight, it’s likely there won’t be much (or any) left to spend after you’ve laid out your necessary monthly expenses and what you hope to save. In the short-term, you can reduce–but not eliminate–your savings goals while at the same time trimming spending.

Forget about trying to trim your food budget by $25. Look at big places you can save, like:

Cutting little things gets you a little bit of money. Making big changes gets you a lot of money.

Step 3: Put your money on autopilot

I first read about putting my money on autopilot over 10 years ago in The Automatic Millionaire by David Bach. The entire book is devoted to setting up automated systems to manage and invest your money.

This does two glorious things:

  1. It eliminates worry. You stop wasting time thinking about stupid things like “Did I pay the electric bill this month?”
  2. It protects you from yourself. Automated finances make it harder for you to sabotage your money. No more late credit card payments (and the associated fees and damage to your credit score). No more skipped IRA contributions. And on and on.

The idea of automating your finances isn’t new. In fact, another writer who has taken the idea of automated finances to the next level is behavioral finance guru Ramit Sethi.

He lays out simple plans for automating your personal finances on both his blog, I Will Teach You To Be Rich, and in his book by the same name. He’s a vocal advocate of what so many other financial “experts” for some reason refuse to acknowledge.

Our generation doesn’t want people our parents’ age telling us to just “set up a budget” and “cut back on lattes”…the latter a direct jab at Bach, who trademarked the term “Latte Factor” to describe how a daily coffee habit can eat into long-term wealth. Instead, we want to be able to spend our money consciously, even when that includes things we want, like a latte.

And the key to that is automation.

Further reading: Put Your Money On Autopilot

Step 4: Spend the rest without worry using a spending allowance

The amount of money that you have left after your monthly expenses and savings is what I call your spending allowance. It’s how much you can spend this month (on whatever you want) without worrying.

Using whatever method you’ve set up for autopilot spend tracking, you can keep a simple eye on how much of your spending allowance you’ve used for this month. For example, by setting up a goal in Mint or using the single-card method for all of your day-to-day spending.

This is what I do: if my family’s spending allowance is $2,500 in a month, I can eye our credit card balance throughout the month. If it reaches $2,000 too far before the end of the month, for example, I know it’s time to ramp down the spending a bit.


This is a lot to digest. But here are the key themes from this article:

  1. Budgets are overrated. They create stress and we don’t stick with them.
  2. All you need is a spending allowance. Instead of tracking dozens of categories of spending, know how much you can spend per month—your spending allowance—after you’ve covered big expenses and savings.
  3. Forget manual spend tracking. Keep an eye on how much of your spending allowance you’ve spent with Mint or by simply using one credit card for everything you buy. Cash is dead.

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About the

Total Articles: 352
David Weliver is the founder of Money Under 30. He's a cited ity on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.

Article comments

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Adam Wilson says:

Recently I have encountered so many people saying things like budgets don’t work. This article is great because it shows you how to budget. If people actually took steps to making a budget they would be infinity more likely to actually follow it and reap the benefits.

Majid says:

Very well explained…thank you

Michael says:

I am amazed that YNAB is not mentioned here! not in the article, not in the comments!
To the , try YNAB, that is the only budget that does work (the philosophy makes it more than a software and makes it works).
P.S: I don’t work for them or making any commission saying that. But they deserve to be tested.

Jeff says:

YNAB changed my life! I save so much more and never feel guilty spending money on things, because it’s all paid for. Also since I have a full month buffer in my bank account, no more juggling the timing for when the rent check gets cashed or credit card bills paid.

Deb says:

I’m mid forties but financially, due to being a stay at app德扑圈官方网址home mum and divorced I’m lucky to be 30 in the finance department. Having realised this I gave your budget concept a go. Back to work , supporting teens and mind boggling amounts of monthly expenses I expected to have little left. After following instructions to work out the monthly “nut’, the relief and surprise felt to find I had enough remaining to spend on an outing with kids and even give them some pocket money each week. It’s certainly a no stress concept. Thank you.

Dylan says:

I usually don’t post on forums but in the past 6 months I was able to track my bills , budget my expenses and pay my bills through one program quicken deluxe , I use to use different bill tracker apps and budgeting apps , then after looking and managing those I would have to log into all my billing accounts such as utilities , credit card payments , and others , setting up automatic payments is not a option for me as my income to debt is really close as a construction worker as some weeks as busier than others , and a good budget with easy programming works like the said, it also took away a lot of stress from my daily bill routine as all my past 9 months of transactions are accounted for with little to know effort , no manual logging

BillGuard Blog says:

As you mentioned, the “just pay with cash” method became popular among certain circles, and people attempted to find a way to stick to a budget that kept them out of debt. But one of the chief “risks” of using an all-cash budget (and yes, there are risks to all money-management moves, even paying in cash) is that you have limited recourse in the event of a dispute with a merchant.

If you pay with credit card, and the item you receive is defective or significantly different than advertised, you have two levels of recourse. First you can address the issue directly with the merchant. If that’s not effective, you can then dispute the charge with your credit card company or with a third-party bill monitoring service. This acts as a “third-party” that facilitates the resolution, at no cost to you (the consumer). If you pay in cash, however, you lack free access to a third-party that can help you resolve these issues.

Of course, if you’re the type of person who will go crazy with credit-card spending, perhaps cash is still the best route for you. But if you can responsibly manage handling a credit card, then you should certainly consider the consumer-protection benefits of paying by plastic.

AB says:

The way that I budget my accounts is pretty simple, and it works for me. I don’t explicitly track spending, but I do keep a general impression of what my spending looks like relative to income. I do this by bringing my checking account to a predetermined level every time I get paid.

I determine a set amount for my checking account that should be enough to comfortably pay for two weeks of normal expenses. For me this number is about $1000. On payday the account balance might be $1500. That same day I transfer $500 into the saving account or investment accounts, bringing the checking account and saving account back to predetermined levels. I then assess whether I reached my savings goal, and if I didn’t how come.

I keep $3000 in a savings account. I consider this adequate since I work in a high demand job, and have no significant financial commitments. This amount should be able to pay for any unexpected expenses such as vehicle repairs.

Even with what I consider good job stability, this amount will likely increase to $6000+ when I buy a house. I’d like to be able to pay for significant house repairs, without having to take out a line of credit. I’d also like to be able to pay the mortgage for at least six months without having to dip into investment accounts.

If for whatever reason I’m not hitting my biweekly saving goal, then I assess why. Am I spending to much on unnecessary things? Do I need to make a major change such as where I live, and what kind of vehicle I drive? Do I need/want to earn more money by picking up hours or taking a second job?

GG says:

I agree with you completely, detailed budgeting is silly, especially with infinite sub-categories. If I can afford it, who cares whether I spend my “spending money” on lattes or expensive haircuts or whatever.

One thing that works really well for me is a google spreadsheet telling me how much cash I will have starting the next month. This is because I mostly use my CC for spending, which gets paid off when I get paid on the first of the month, and I have work expenses that get reimbursed. So I keep a tally of all the expenses (CC balances, housing costs, transfer to savings), and all income (paycheck, refunds, etc). I aim for starting the next month with at least $400 in cash (since I pay for most expenses with CC). When it starts looking like I won’t make it, it’s time to make some decisions on discretionary spending. The final result is similar to what you recommend: the financial obligations are taken care of, and the spending has a limit, but I don’t worry about what I am spending my discretionary funds on.

I have multiple sub-accounts within my savings account, including one called “fun fund” where any extra cash goes (or I designate it as part of transfer to savings from paycheck). That is to be spent on trips or unexpected expenses like car repair and tax bill (so not always fun stuff, maybe I should consider separating fun and non-fun categories).

I don’t see a lot of people talking about this “looking ahead” approach but I think it’s useful for those who have a lot of complexity like refunds etc. It only requires keeping track of total balances, not individual items.

Cindi says:

Also, to speak to the big expense items that you can’t budget – you are exactly right. There really isn’t a way to handle them, so I just don’t. But by keeping my expenses as low as possible, my system automatically saves so much that I don’t even feel it when those expenses come up. That’s what you want to get to….

If you don’t tell your money where to go directly, it will flow away from you to the area of your greatest weakness. That’s why you have to move it somewhere on purpose.

Hopes this helps someone.

Cindi says:

Ok – have to disagree with you. I use an envelope system for my weekly spending budget. One for groceries ($130/week), one for miscellaneous stuff like toilet paper, paper towels and other non-food items ($30/week), one for gas ($40/week), one for car wash ($10/week), one for laundy ($8/week) and one for my personal spending ($20/week).

The rest are bills that are pretty much fixed and that I only deal with once a month – rent, phone, utilities, cable…. That amount is divided by either 4 weeks or 5 weeks and the weekly amount for that is kept in the main checking account.

The rest of the money after the weekly expenses which I take out in cash from the bank once a week and the weekly sum for the monthly expenses gets transferred once a week out of that account to my savings account and is never touched again.

If I have unexpected expenditures, I will deduct that amount from the savings amount (like a credit card bill) before transferring the savings amount.

I make over $150K a year and keep myself on a tight budget using the envelope system. I only spend what I have in those envelopes during the week. Pretty easy for me to know how much I have and how much is left during those 7 days.

Using this approach, I have saved $200K in just a few years and will be paying cash for a house.

I recommend this method – it’s automated after you do the initial setup to figure what the weekly/monthly bills are, it accounts for unplanned expenses and it keeps you from having to remember what you spent on food, coffees, etc during your daily life.

Zack says:

Wow, Cindi, it looks like you are winning “the game.” I would venture to say that there is no family involved here and you are not much of a party-er?

I am a single male and find that after I get used to budgeting, I don’t mind it so much, as long as everything is hunky dorey and my salary keeps going up so every year so I get a little more spending money as my tastes become more adult (expensive) and I don’t want the chintzy-est cheapest version of everything (I still love my thrift-store clothes though, but my job rewards a little eccentricity so it’s ok). But I think the stress of the budget becomes overwhelming once life becomes more complicated (kids, spouse, etc). This idea of one credit card and just keeping track of one spending total is the only way to go once life hits that stage. But then again, I’ll also do my best to keep my kids away from credit cards (and TV) during their formative years, since I think we all have to go through the process of cash budgeting to understand how faulty our mental budgeting systems are and just how and where the money can flow away from us, as you say.

A comment for David — this article is really a godsend as far as giving an alternative to the stress of line-item budgeting. But one thing that budgeting is useful for besides restricting spending is actually for expanding it in those areas where I don’t like to spend. Cindi gives herself lots of money for groceries probably because she is trying to be healthy and not eat out as much. If you expand your budget like that for things that are good for you, a budget can actually be liberating (for my own reclusive self, I devote a chunk of change ($100/week) to go out, and if I don’t use it during social activities, I can’t spend it (it just adds to my bank account buffer, which eventually gets donated to my retirement account) — forces me to go out and have fun every week, rather than bite my nails at app德扑圈官方网址home).

Rebecca says:

Hi Cindy,

My husband and I are the same! We’ve worked out a really great envelope system that has allowed us to save a significant amount even with a much lower annual income than you. Each of us gets paid every other week, switching off, so we have arbitrarily decided that my husband’s paycheck goes to all of the day-to-day expenses, while mine goes to the longer-term goals. Everything that doesn’t end up in an account is just for whatever spending we want to use it on–my husband is more of a spender than me, so it’s given me peace of mind to know that we’ve already put our money to the accounts that really matter before we fritter away the leftover amount.

Based on our current living costs/incomes (we live in New Zealand, so fuel and groceries are FAR more expensive than in the US), our accounts go as follows:

My husband’s biweekly paycheck goes into the following:

* $220 for rent each week
* $100 for fuel each week (it costs about $100 to fill up the tank here, so it’s a significant expense)
* $200 for groceries each week
* $25 for internet each week

And my paycheck goes into the following:

* $300 towards our future app德扑圈官方网址home purchase each week
* $200 into our travel fund each week
* $150 into a “stuff fund” each week (this finances larger fun expenses, plus things like gifts, car repairs, etc.)

Money is already taken out of our paychecks for our retirement savings each week, so it doesn’t get factored into these expenses. My husband’s student loan repayments are also deducted from his paycheck.

Anyway, I also highly recommend this method, and it’s helped us reach a happy medium! I’m a compulsive saver (I used to get by on around $10-20 per week on groceries, with no personal spending at all apart from travel), while my husband is a compulsive spender. This way I get to save huge chunks of our pay each week, while he gets to spend whatever is left over without me worrying.

PKim says:

One thing that bugs me about budgeting is that there are always these expenses that are once per year or once per two years or emergency, as you indicate at the end of your article. Sometimes they are predictable, for example my AAA subscription, and my annual auto insurance, but other times they are really out of the ordinary, like a dental procedure or car repair that costs hundreds to thousands. The basic problem is that projecting long term into the future is difficult, because the expense is uncertain. Maybe I’ll cancel AAA or get rid of my car, or skip the dental elective etc. Otherwise budgeting is a piece of cake for me!

Spencer says:

Hey PKim – have you ever tried looking at those once per year items or quarterly items or whatever they are and just figuring out your total and dividing them by 12 to get the monthly amount you need to budget for them?

That’s what my wife and I do – these categories are called carry overs. Let’s take Car for example. We pay for oil changes quarterly, insurance quarterly and then there’s usually an estimated amount for repairs. We total all that up for the year and divide by 12. Let’s pretend it came out to $1,200 or $100/month.

In January, nothing happens. We hold onto the $100. In February, we pay insurance ($300). We budgeted $100 that month but we know it will even out for the year. Obviously, you need to have a buffer in your checking account for this method, but I feel it’s the most accurate and if you do this for multiple years, you get a good idea of what these carry over amounts should be. At the end of each year, we adjust our budget to make sure we’re accurate.

Hope this helps!


AJ says:

What do I hate about budgeting? They don’t work! Some months I do very little expensive traveling and others I eat out way too much. I love being unrestricted and not having categories because all of my fixed expenses and savings happen automatically and first. I too follow Ramit Sethi’s spending plan and it works so well. That in conjunction with mint and automatic bill pay, transfers to my savings, IRA, 403b and investment accounts has helped me save a lot of money that I don’t even have to monitor.

My biggest stressor so far is trying to get that one month buffer so that I can pay all of my fixed expenses with last month’s income. I’m only two years out of college and into the work world, but I have 7 months of emergency fund. That last $1,000 is what I’m working on getting so that I don’t have to panic when I need a new car battery or other repair (I would hate to pull that out of my emergency fund, which is mainly in the event of job loss or something really unexpected.)

A Foodie on A Budget says:

In college, I did the manual-entry Excel sheet method. It worked in college when I had fewer expenses and it was just me. But I think the Excel method gets harder when you add more people…once I got married, it was nearly impossible to make sure both of us were putting everything we spent into the Excel sheet. We do use Mint now to track our spending, although we don’t check it as often as we should. I agree that the hardest part about budgeting is that what really eats your money alive is the “unexpected expenses” that you didn’t budget for any way.

My husband got laid off a couple months ago. We are using the experience to re-focus on our spending habits. But, I have become obsessive with it and it is causing way too much anxiety. While we DO have to watch our pennies because we only have one worker now, I like what David said about how trimming $25 here and there won’t get you anywhere. You have to do something bigger. I will have to think about that. I do contract work in addition to my full-time job, but that is seasonal and won’t start until January or February.

When my husband gets another job, I think we will automate our savings by sending our two pay checks to two different accounts: one will act as a savings and one will act as checking. We will be used to living on just one salary by then and it should really make saving our money easier.

Eric says:

I’m in the same boat, I love/hate budgets. I started out by spending hours developing a sweet spreadsheet to track everything. You all know how that turned out…I wish I could have that time back. Then I found Mint after I did my taxes one year and what a great budgeting tool it is.

I track my spending in Mint somewhat similar to what David laid out. I have my “nut” budgeted out each month plus some things I just want to track and/or know will occur every month such as eating out, gas, and groceries. Everything else just goes into an Everything Else budget but I can still categorize the expense type. I know each month can be different so as I think about each one as it comes up, I can easily adjust each budget item in Mint and I know what the max for my expenses is every month. Cash withdrawals are even tracked because it generates a bank transaction and Mint picks up on it. Personally, I don’t care where I spend the cash, it just gets accounted for as a Cash expense in Everything Else. However, if it were a significant cash expense that warrants tracking where it went, I would categorize it. How you want to track cash in Mint, either way, it get’s accounted for in the overall budget.

To get the full potential out of Mint, I think you have to understand how much you should be spending. Mint can tell you where you’re spending and how much, but you need to know how much you can spend each month. Figure out this number (David as a post about it) and it’ll help you maximize Mint and setting up the monthly budget. Another way to maximize Mint is to set up rules. Mint is relatively good at determining on it’s own how to categorize a transaction, but if it doesn’t, correct it and tell Mint to always make that change anytime that transaction comes up. As you build up more places you buy things at and make sure they’re correct in Mint and tell it to remember it, everything is virtually automatic and you’re only correcting a few transactions a month.

As for automating, I have everything from bills to savings automated. I have one main checking account where everything goes in and everything goes out from. It makes automation easy to manage when all the action takes place in one account.

Ashley says:

I absolutely love everything about this automation plan. There’s just one hiccup for me:

I am not a salaried employee of a single company. Rather I am a freelancer whose monthly income fluctuates with the tide of the theater industry. I know you have some experience with these more inconsistent sources of income from your past entries so riddle me this: how do I automate an inconsistent income without unintentionally overdrawing my account every few months?

David E. Weliver says:

Hi Ashley, Good question. I actually have an upcoming post written by a friend of mine who is a financial planner that addresses this specifically. Look for it in the next couple weeks!

Ryan says:

I myself don’t like budgets but I feel it is an necessary evil. I have come up with a rather relaxed budget that fluctuates throughout the year. At first, like most, i had a strict budget that basically made me hate my life. A budget that is flexible is the best. Be realistic with yourself and where you stand and know where you are going. With a flexible budget plan I am able to save 50% to 72% of my income every month. I am only 21 and in the military so i don’t make very much to begin with. But with an index mutual fund topping over 12k this last week and a Roth IRA sitting at nearly 3k I think my budget plan is working.

Ive only been saving for a little over a year and one thing I have learned that is if you don’t have immediate access to your money, you wont spend it. I had to trick my mind so that all I see is my lonely checking and savings account with only a combined 2.2k in it. The less you have the more reserved you will be. best of luck! O and great article by the way.

RichUncle EL says:

Great advice, I have a budget as well, but with so many random expenses that arise it fluctuates. So it is becoming more difficult to stick to a plan. I do realize the importance of having a checking account buffer and the importance of knowing your nut. Automate for less stress is a must.

Christine McGruder says:

The information you include in your website is absolutely wonderful!

I want to share this great resource with my church but the only drawback is you really curse a lot and it is so not necessary. You will probably curse me out for suggesting it (and if that’s what you have to do so be it), but I’m saying I know a whole bunches of people who would read this, but your language will turn them off. You are funny and informative and I do not get bored reading what you have to say, but the words, well, just a suggestion. Enjoy your day.

AJ says:

Hahaha he seems like a really nice person! Why would he curse you out? Maybe you could lead your church but use some of the lessons you’ve learned here? Just a thought to help you get around your concern 🙂

Patrice C. Washington says:

Great post, David. I’m a personal finance blogger, as well and a financial management consultant for a large non-profit. My clients think I’m crazy when I tell them to stop taking budgets so seriously. I try to get them to work towards automating bills one by one and then ensure they have some type of cushion or buffer, ideally $500 considering that I work predominately with low income families and individuals.

Personally, I have all of my expenses written out just so I can see or update them at a glance, but I refuse to check it daily. Every monthly bill we have is automated. I keep a buffer which I do not dip below and have set up push alerts on my bank’s iPhone application to notify me when I hit the threshold. The amount I have is more than enough to cover anything I might do in between my husband or I receiving another check. Every few weeks, I’ll look at what I have above and beyond the threshold and transfer it as additional savings.

Enjoying your work as a relatively new reader.Many thanks and continued blessings!

Seek Wisdom, Find Wealth & Be Blessed!

Tina Jackson says:

This was a great article. I think this is what I needed to hear to get my finances going in the right direction for the new year. Thanks a bunch. God Bless!

Jeff Crews says:

I set up a budget way back when. However, I haven’t kept to it like I thought I would. The thing is that I have put together my own saving process during the last couple months. I simply check my accounts daily via mobile apps. I actually have saved more that I had budget. 🙂 The biggest thing that allowed me to save more is I reevaluated my necessities. What do you think about that?

Renee says:

Autopilot is the ONLY reason we’ve been able to save over 20K for retirement. I am slowly putting our bills on autopilot, but it’s hard because I don’t want to bounce anything.

I absolutely love though. I do not balance my checkbook because it’s a huge hassle with 2 cardholders. I rely on for budgets and goals, too. I love the weekly recap sent to my e-mail and also the very easy visual of the last six months that shows whether you are in the red or green. Hopefully January will be the first month we won’t be in the red. Eeep!

Bob says:

Drew, you’re my hero. My goal is to get to your position.

Also for what it’s worth I do track all my expenses and I love to budget. For me, complete knowledge of where every dollar goes brings peace and freedom. Not budgeting is what brings stress. Of all the chores in my life, taking care of my finances is not one of them.

Also re the single card method – $800 in cash is always better than $1,000 in credit.

Drew says:

I do something a little different that some of my fellow “savers” might try. I do not spend a bunch of time worrying about budgeting or even tracking spending, though I do use a single card for everything and can easily do so if need be. I am naturally a saver, so I don’t have to worry about compulsive spending sprees.

I use my 401(k) to automatically save 8% of my gross salary (plus 7% company match) each month. I also have a pension of 90% of my last 2 years average salary for life waiting for me after retirement. So, I have a very comfortable retirement locked down before I even get paid. But, being a saver and an investment nerd, I still want to save on my own for future big purchases (house, car, etc.) so that I can avoid debt if possible.

What I did is set several goals to reach over time: Make retirement saving automatic and do not consider it part of your monthly income. Enroll all necessary bills in auto-pay to coincide with pay day. Set a minimum balance in my checking account that I would not dip below. Second, have an emergency fund of 6 months expenses in a high yield on-line savings account that would sit there and just earn interest. Third, everything left over at the end of the month above the established minimum in the checking account would go to an investment account (I don’t qualify for Roth IRA or tradition IRA deductions).

I now keep a minimum of $10k in my checking account at all times. At the end of each month, everything that is left over beyond $10k gets split between my emergency fund and my stock trading account. I only have a few months left to finish out the emergency fund, at which point all left-overs will go into my investment account. It may sound a little extreme, but all of this allows me to spend on day-to-day things worry-free, as I basically have 2 emergency funds.

As you can probably tell, my income does not force me to be on a “tight budget” just to pay the bills. However, you do not need a 6 figure income for this to work. The numbers should be adjusted to your income and spending habits. Maybe that minumum in the checking account is only $1000, and the excess goes to pay down student loans. The idea is that you build in enough cushion that one slip up can’t hurt you, no matter how much you make.

Long says:

Yeah…I agree..the anti-budget is much like a budget. However, I am a big fan of automation and like to use Quicken to track my expenses. Budgets are definitely hard to stick to, but I like to set spending goals in “bands” that a litte bit flexible, as it can be impossible to stick to a rigid number.

The biggest stress that I have with managing money is ensuring I set aside enough to accelerate payments on our family debt. It’s tough to balance saving for a six month emergency fund and paying off debt so we can be debt free (minus the mortgage).

Jenna, Adaptu Community Manager says:

I have to agree. Between automation and a spending account it’s pretty easy to live a “budget free” life. Keeping an eye on your automation and keeping your spending in check is the next obstacle to tackle.

Jennifer says:

Automation is very key, I love it. I use Mint to track my monthly spending, and in place of worrying about budgeting I do a lot of “Planned Savings or Planned Spending” I save all year for my January insurance payment and Christmas Presents. I set a budget each January for a few non-monthly categories and I have a certain sum going into my planned savings account which covers: gifts, clothing, vacations, school fees, donations etc. and then I keep track of the withdrawals all year to make sure I’m not over spending in any category. As far as “unexpected” car repairs go, cars will need repairs, so will your house, so why not start a planned spending/ emergency account for those things, then when an actual emergency comes up you’ll have the cash there and won’t have to dip into your fun money that month. This works for me and I sleep like a baby.

Meg says:


I have a similar system of planned savings/spending for vacations and holidays. It was easy enough to set up two additional savings accounts at my bank and I simply deposit a certain amount to each account every pay. It takes a lot of the guilt out of taking a big vacation.

Annalee says:

I don’t put myself on a strict budget, but I do track my spending per paycheck. I subtract all of the “fixed expenses,” which includes savings as well as a little for my mortgage if the paycheck doesn’t cover the 1st of the month. Once all that has been subtracted, I know how much I have to spend for the next two weeks. I’ve just recently started paying for almost everything with my cash-back rewards card, but I track it as if it’s a debit card and try to rein in my spending if my “account balance” gets low. That way I never spend more than I’ve made.

Call me crazy, but I actually like keeping track of my expenses. For almost a year now I’ve been trying to save about 30% of my income every month (quite a challenge). I guess looking at my spreadsheet for five minutes every day just reminds me how much (or how little) I can spend, and how much closer I’m getting to my savings goal(s).

Janelle says:

This is pretty much what I do, but on a weekly basis because thats how I get paid. I look at whats coming in (my net), what’s left after I pay bills that week (I actually have most of my bills divided into 4 so a little automatically gets tucked away each week into a sub savings until the bill comes due & it automatically transfers back into my checking & the auto bill comes out. That sounds like a lot of redundant work but its really set it & forget it for me, and if its in my checking I will eventuall spend it!), including savings (i have that DD to ING each wk) & gas. The rest is mine to spend that week. Unfortunately, its only about a $100/wk.

My CU recently got a PFM, which I am super excited to use. I had tried in the past and liked the idea but not so much the practice. I never checked it enough & the emails were more annoying than helpful. Money desktop (the new PFM) not only puts all my accounts in one place and tells me what I spend my money on & set budget limits. It also helps me set money aside to continue building my savings (first a $1000 emergency fund & then 3mo worth of expenses saved) & then pay down my consumer debt, etc. Basically all the financial 101’s but it does it in a really clear cut way, & is a good help….makes me feel like Im not doing it on my own :o)

David Weliver says:

I like it when banks and credit unions integrate a tool into their services—I think you’re definitely more apt to use it when it’s under the same login as the account you use most. Thanks for sharing.

Laura says:

Budgets do suck. But I think they are a necessary evil. Like you said you really only need to do it once. But I always get tripped up on weird expenses like annual payments for magazines or something silly like my 6 month hair cut. Also it always seems that our ” extra money ” (i.e. the money i was planning to use to pay down debt or put in savings) just disappears somehow. Which is where the tracking comes in. I haven’t figured out how to use mint to its full potential yet but I’m getting there.

Until Dave Ramsey I have always viewed cash as free spending. I am really controlled over my bank account but view cash as something I don’t need to track or worry about (until I’m out of it of course). I think cash will still be around especially in urban areas.

I did want to throw out a good tip that really helps my family. I use e-mealz. They can put your food plans on auto pilot too. One less thing to worry about, “what’s for dinner?”. And the meals are so good that we all want to eat them instead of always going out for dinner. So it helps me save $$ at the groshery store by picking meals that are on sale. But also the $$ I’m not spending on dining out. Double win.

Lissette says:

One of the things that I’ve hated about budgeting in the past is that I feel a sort of constant pressure to stick to the budget at all times, and I start to feel anxious about it…But, the thing that I hate the most about budgets right now is that sticking to it makes me feel like a jerk. My boyfriend ends up paying for most of our entertainment expenses whereas before it was more equal. I have been trying to make up for this by doing more chores at app德扑圈官方网址home and cooking practically all of our meals, but I still feel a little bit guilty and a bit like a jerk for not paying for more things…I hate it.

My biggest worry about managing my money in the day to day is that I haven’t saved enough money in the past and that I’m not saving enough money now. Next month, I’m taking a risk (yes, I read your post and felt encouraged and reinforced by it. Thank you!). I’m quitting my full time job and going back to school full time. My financial aid package is still being processed and I haven’t yet secured a part time job to help me pay my way through school. I’m pretty worried that I didn’t save enough my emergency fund should keep me afloat for a few months (built as per your advice), until my financial aid comes through and I, hopefully, find gainful employment. Thanks for your ever frank advice and encouragement!

Amber says:

You said that your bf pays for your ‘entertainment’ things you do (assumably, together). Maybe you need to focus less on doing chores and cooking to make up for it, and more on coming up with cheaper/free entertainment things to do (for a while). You and he need to get on the same page when it comes to how much you’re comfortable spending on a night out. If that means ice skating followed by a bottle of wine or coco instead of clubbing or some other expensive diversion, so be it. If he says, I don’t care what you want to save, I still want to do “X” – then you really need to quit feeling guilty about not keeping up your end of it. In this case, your boyfriend is being your Mr. Jones – and he should either pay for you to come along or adjust to your level.

Jimmy says:

I don’t understand. You are shooting down budgets and your “anti-budget” worksheet is essentially… a budget worksheet!

I do agree with the automation part of the article. Automation has made my life easier. However, I still have to follow some kind of budget (mint). Not to say I follow penny by penny but I at least follow if I am on the right track or not.

David Weliver says:

I’ve been waiting for someone to call me out on this. Yes, the “Anti-Budget Worksheet” looks like, well, a watered-down budget. The key difference is that after doing it once (and putting the right parts of your finances on autopilot), you don’t have to do this again until something major changes in your life (you move, your income changes, etc.). Unlike a traditional budget, you forget about tracking spending to the dollar in a dozen different categories. Perhaps you’ll disagree on the semantics (“a budget by any other name…”). But with this approach, you do this once, you get money moving the way it needs to move, and you are, hopefully, done.

Anais says:

The thing I hate most about budgeting is the inevitable failure and disappointment every month. My husband and I fought like mad about it, until I finally woke up and realized it just wasnt working. He’d lose every receipt, withdraw cash, and I’d be tearing my hair out trying to control it. Until I stopped. I set the bills to pay on paydays, and buy groceries once they’ve all cleared. I save the tail end of every deposit, e.g. If we get a check for 386.13, I stash the 86.13 and don’t tell him jack. It stays there till we need it. Money saved, fights avoided, wife happy, problem solved.

Gail says:

Biggest worry or stress about budgeting or managing money? Whether or not I’m saving enough. I’m on a contract job that is scheduled to last for one year and my hourly rate is $31.78 per hour. I just started November 14th and have changed my savings direct deposit from $500 per week to $870 per week. I have this goal in mind and feel like time is against me (guess I would call it, worrying too much about money). My goal is to save $30k by the end of my contract. I’m 36 yrs old and have no savings except for what I’m saving now. My husband and I go half on bills so I save $168 per week for my half and always have a little left over. I want to invest one day but right now I do not have enough saved. So far I’m at $8500 in savings. So yes, I believe I worry too much about saving. As for emergency money, I plan to take $1000 or $500 from my income tax refund and put it away. Advice, please??


Michelle says:

What are your goals for your savings? Emergency fund, buying a app德扑圈官方网址home, vehicle, retirement, etc…? Once you have that goal in mind, then what is your time frame? Less than one year, keeping it in a savings account is fine… but greater than one year, short term bond fund, greater than 3 years something more aggressive, greater than 5 years an asset allocation mutual fund (conservative or aggressive based on your comfort level) … However, stressing over finances isn’t going to make it easier to save. Some Roth IRA’s can be started with an investment of $20/mo (sounds like you can afford this). Discount brokers like TD Ameritrade will open an account for free and trade no load MF’s for free and some companies like USAA will even give you recommendations from a licensed advisor at no charge no commission.

Drew says:

I would flip around your investment and emergency fund savings. $1000 is probably not a big enough emergency fund since you are married and probably have a house & cars (just guessing). That is also compounded by the fact that you are working contract and you do not know when the next job will come around, especially these days. I would first build up an emergency fund of 3-6 months living expenses in a separate account. Once you have that, then you can start investing. As Michelle laid out above, it does not take a huge sum to start investing.

Also, maybe I’m reading your post wrong, but it sounds like you and your husband keep finances separate. Personally, I don’t think this is a good idea. Being married, your financial fates are linked. If he loses his job, becomes disable, or god-forbid he dies, you are on the hook for the bills. That is why I suggest you focus on a fat emergency fund first.

Jeremy says:

This is roughly the system I use. After about 6 months of tracking my spending online, I figured out what my average monthly expenses are. I chose to include not just rent, but average spending on groceries, gas, even medical expenses (medications, doctors’ visits), which aren’t the same monthly, but average out to about the same amount per year. I have this amount of money direct-deposited into one checking account–the one from which I pay my rent, and which is connected to the credit card I use for all these above expenses. I have the remainder of my salary direct-deposited into another checking account, which is for all ‘discretionary spending’–drinks, eating out, entertainment, etc. I make these purchases using the debit card connected to this account, or cash withdrawn from it. When this money is depleted, I know that I’ve spent what I have allotted. And if I dip into my ‘Nut’ account, I make a note to myself to transfer the money back after my next paycheck, or–if it’s an important enough purchase–I’ll take from my savings.

My biggest issue after this (which Money Under 30 has certainly helped with) is not just staying afloat, but increasing my savings.

Des says:

I agree with most of this, but to say “cash is on the way out” is almost anachronistic. Cash was “on the way out” 20 years ago. It is as “out” now as it is ever going to be. If anything, I would speculate that it is on its way back in, if only slightly. With the new banking changes I wouldn’t be surprised to see surcharges for using plastic in the next 10 years. I know I will pay for my daily Lattes (et. al.) in cash if I have to pay a fee to use plastic. Yeah, it can get lost or stolen, but that risk is grossly inflated by card advocates. There is a place for cards (large purchases, online, etc.) and a place for cash (small purchases, small businesses, etc.)

Amanda C says:

Exactly! The place for cash is in that “spending allowance”. I follow a system similar to what is described here, and use cash for small purchases. Once my bank account goes below a preset amount though . . . that’s it, I need to use the cash on hand.

David Weliver says:

Fair enough. I’ll concede cash was done in years back. The recession of late gave it a dying gasp. Usage fees on cards could certainly revive it. But for now it’s mostly irrelevant.

Arthur says:


You make a really good point regarding automation. I’ve used a Excel sheet for sometime, but I agree it is a major PAIN! I’d much rather have everything sorted and itemized without me busting out the old calculator. Thanks for the high quality post!

I look forward to reading the rest of your series.


Sara says:

This is actually the way I’ve started to keep track of my money. I’ve seen all over the place that it’s a terrible idea to use your debit card because it’s less fraud-proof than a credit card, but I needed to get my spending in check after buying a condo. I used my debit card almost exclusively from May (when I bought the place) to December (the few exceptions were for purchases of about $200 on my credit card when I didn’t actually have the money in my checking account). Once I got my credit cards paid off (less than $1000 total, but still a good feeling), I gave myself two months to adjust to living within my means (November and December – all the supplies for making Christmas presents had already been purchased with the exception of one ball of yarn).

Anyway, my next credit card due date is February 25 (I already paid off the Jan 25-due balance), so I’m pretty chill – but not totally relaxed – about how my money will be spent til then.


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