• Michael Huskey

Forget budgeting - this is what you need to do instead

The way to manage money for those who hate budgeting


Photo by Helena Lopes on Unsplash

70% of Americans do not have $1,000 in their savings accounts.


This startling number has caused many, maybe even you, to create a budget to keep their finances in order. If you struggle to keep a budget or don’t want to deal with the added stress of maintaining one, I am with you.


I think the current way of budgeting with a line item for every part of your life is a waste of time and ends up creating more stress than it relieves.


Itemized budgets are bad


Creating and following an itemized budget sounds like a good idea on paper, but in practice it is miserable. Most people who make these kinds of budgets expect this to help their relationship with money.


Usually, the inverse is true. You will begin to question every purchase. You will be in the store or out with friends checking an app to see whether or not you can buy another drink. I cannot think of a more toxic relationship with money than that. This also causes most people to eventually give up on personal finances in general, which is a horrible mistake.


The reason that the story seems so real is because that person used to be me. I was a self-proclaimed money expert, but money was controlling me. This led me to create my own way to manage my personal finances, and it has done wonders for me and everyone I know who has tried it.


Organize your money after you’ve spent it


Most budgets people work with have you predict your expenses ahead of time. You create a nice list of all the ways you spend your money and now you have to live within those boxes. This type of budgeting is very constraining.


What I do instead is wait to see what I spend during the month and then I divide the remaining money into 3 different savings accounts. As long as you are able to consistently spend less money than you make I think you will find out this method is very user-friendly.


I am sure you are now wondering what those 3 accounts are.


Big Broad Categories


The 3 categories I pledge by are retirement, adult/emergency, and fun money.

  • Retirement - This is money that you put away and you don’t plan on touching until you retire.

  • Adult/Emergency - This is money for adult and emergency purchases. Think down payment on a house or a new set of tires. Not fun but important

  • Fun Money - this is the money you get to spend on anything you’d like.


How much you put into each one of these accounts is based on your life circumstances and your life goals. If your goals change just change the amount you are putting into each account.


These categories also set the bounds for where you take money out of for big purchases. If you are planning on going on a big trip and you need some extra money. You would take out money from your fun money account to supplement your income for that month.


Side Note: I would always recommend putting more money into retirement than fun money. The main reason is you are probably spending a fair amount of fun money during the month already and unless you are putting a lot into a 401(k) you probably aren’t putting much into a retirement account.


In summary


I know this idea is probably not for everyone. But if you are someone who has always struggled with budgets I recommend you give it a shot.

  1. Stop making super detailed budgets at the beginning of the month

  2. Organize your money after you’ve spent it

  3. Divide it into 3 main spending categories: Retirement, Adult/Emergency, Fun Money


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About the Author

I am a 25-year-old writer writing about topics that I am interested in and passionate about. Those topics right now are personal finance, business, and some self-help. I try to bring to my unique perspective to any article I write and hope that my perspective can provide value to my readers. If you have any comments or questions around any of my articles or if you have suggestions for future articles, feel free to email me at huskdoes@gmail.com

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