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Why I don't keep a budget

Do you really need to keep a budget? I don't think so.

I hate budgets.

I hate tracking my spending.

I hate counting down to the dollar or cent.

I want to send my investments to my brokerage, auto-pay my bills, and move on with my life.

That's why I have a visceral reaction to personal finance "experts" who insist that you have to track every penny for the rest of your life to achieve any level of financial freedom.

Yes, it’s important to know where your money is going.

And yes, assessments of your spending is a critical part of getting your money on track.

But tracking every penny everyday forever? Not necessary.

Pareto’s Law: 20% of the activities are responsible for 80% of the results.

So sure, you can keep a little notepad for writing down the 37 cents you saved on budget trash bags, and hope that the bag doesn’t rip open on your way to the chute.

OR

You can automate your investments, auto-pay your bills, and spend whatever you want on everything else.

In fact, here’s my rough “budget” from a few years ago.

  • Auto-deposit at my brokerage: $2,000+ / month (Thanks, Betterment!)
  • Auto-pay rent at $1,500 / month (No transportation – thanks downtown apartment that’s a 5-minute walk to work!)
  • Auto-pay phone bill at $50 / month 
  • Auto-pay miscellaneous subscriptions at $50 / month (Tidal / Apple Music, etc.)
  • Spend $200 on basic groceries: milk, pre-made salads, fruits, coffee and tea (Thanks, Trader Joe's!)
  • Spend $200 to pay the housekeeper, hairstylist, and nail technician
  • Keep about $1,000+ on hand to spend on whatever I want for the rest of the month without giving it any more thought

Now, this is pretty boring.

At the time, I ate basically the same breakfast and lunch every day (cinnamon cashew latte and strawberry-banana smoothie for breakfast, Trader Joe’s salad or a simple sandwich made at home for lunch), but I enjoyed that. I didn’t have to expend mental energy deciding what to eat.

I typically “splurged” on dinner: sushi or tacos another meal at the restaurant of my choice after work. Even if I ate dinner out nightly, I typically averaged ~$10/night for a grand total of $300/month.

And although the numbers are a bit different these days, I basically enjoy the same anti-budget.

  1. Automate savings/investments through auto-deposits to brokerages (50%+ of income)
  2. Automate bill-pay (25% or less)
  3. Stock home with necessities and pay for any grooming/maintenance (1-5%)
  4. Spend what you want on the rest with guilt or worrying (25%+)

Not sexy.

Not complicated.

Not even sophisticated.

But simple and effective.

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