original article published by hicharlie.com
As someone who has spent an inordinate amount of brain cells mulling over money, a well-known pillar of financial wellness is that you need to budget.
Here’s the thing: while budgeting is touted by many in the personal finance blogosphere as mission critical to getting your money ducks in a row, they don’t always work. Not for long, anyway. For every budget I’ve tried — the 50/30/20 budget, zero-sum budget, spreadsheet, and envelope system — I would start out gung-ho.
I’d meticulously track every purchase and expense, allocate my income into neat categories, and congratulate myself for creating such a pristine, beautifully put-together budget. It felt like magic, at least at first.
Fast forward to a few months’ time, and I’ve let my budget fall by the wayside. Why’s that? The reasons may stem from a number of reasons: feeling boxed-in from having too specific spending categories, lapsing into a cycle of shame followed by guilt for going over in X category, or from weaning interest.
Nix the traditional budget. Here’s what works instead:
Track Your Expenses
This is pretty essential. It’s hard to figure out a long-lasting approach to saving if you don’t know where your money is going. There’s no shortage of free money management apps out there to help you track your spending. After you have a good idea of how much your living expenses are and anywhere else your money is going, you can create a system.
Create a Money Flow System
Having a system for how you save and spend your money will keep things on autopilot. The less “mind time” and work it takes, the more likely you are to stay within your spending limits. Yes, this takes work. It’s not an overnight thing. But what about Michelangelo’s Sistine Chapel frescoes? The Leaning Tower of Pisa? Your favorite craft beer? The good stuff takes time.
As a self-employed freelancer, I have both a business checking account and a personal checking account. At the end of each month, I’ll automatically transfer a set amount into my personal account for basic living expenses.
I mete out “buckets” of cash that are then transferred to two separate debit cards. There’s a set amount for discretionary expenses or things that change every month. (Think eating out, groceries, gas, etc.) I also allocate any extra cash toward my savings goals. For instance, I put set amounts toward emergencies, a splurge fund, and a vacation fund. I also save for a house when I can.
Why so complicated? After I’ve devised a money flow, it’s pretty much set and I can forget about it. I methodically check my balance and monitor transactions, but that’s it.
Automation is a godsend for a lazy money person — no shame. I automate as much as possible: savings goals, bills, and for a buffer fund in case my checking goes to zero. My bills are paid on time, and I make sure I sock some away some of my income towards retirement. If you’re new to automation, make sure you schedule your transfers so they hit a few days before or after you get paid. You’ll also want to keep an eye on things at first, just to make sure there aren’t any hiccups.
Create a Space for Guilt-Free Spending
Just like guilt-free afternoons binge-watching “Russian Doll” on Netflix while noshing on cronuts in your otherwise tame week of salads and cycling classes — you need breathing room to do whatever you please with some of your cash. This will prevent you from going hog wild and splurging. Create a separate savings account for some guilt-free spending. Or allow yourself to spend X of each paycheck on whatever you please. Of course, this is only after you’ve covered your living expenses and savings goals.
Have a Buffer
One of your friends decides to drop in unexpectedly for the weekend and you go on a pricey dinner date and night out. Sure, it’s fun times, but also cry-time for your wallet. You’ll want to have a bit of cushion in your budget for small, unexpected expenses. I like to keep a buffer of a few hundred bucks in my monthly budget, and you may need more or less.
Place Your Money on an Emotional Spectrum
Try putting your entire money situation — earning, spending, saving, and investing — on an emotional spectrum. What I mean by this is to think about the things you spend money on. What do you dislike spending money on?
For instance, maybe making payments on your student loans or credit card debt are things that make you groan or ask, “Whyyy?”
What are you neutral about? That could be utilities, rent, and gas for your car. And last, what types of spending and money goals bring you joy? Perhaps that’s when you get to go out for massages or buy hip clothes, or that subscription box of goodies that you look forward to receiving every month.
When you categorize your money on an emotional spectrum, it’ll help guide you toward what you want to minimize or nix altogether, and what you want to have or do more of. So if you detest paying off debt (which is more than likely) focus on crushing it as soon as possible. On the flipside, if you love investing in art, try to find ways to put more money into those areas of your life.
While budgeting doesn’t always work, creating different systems to make saving and spending as easy and painless as possible, does. What works for me may not work for you. That’s why it’s important to approach it as an experiment. Exploring new ways will help you find a strategy that jives best with you.
Crystal Vandegrift is a wedding photographer covering Virginia, D.C. NC and Maryland.
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Pictures were one of my top priorities for my wedding. I spent a lot of time reading through photographers and even contacting some. I was also pretty nervous, I had never been professionally photographed before. Crystal and her team were SO easy to work with and immediately took away the nerves. I trusted her completely and I am so happy I did. Cannot recommend enough! Ellen - Yorktown VA
If you're looking for an amazing photographer who is relaxed, has experience, and knowledge look no further. Crystal took our engagement and wedding photos. Not only were her photos amazing, but she is extremely responsive to messages and will even help you when planning your big day. It was important to us to work with a photographer who has experience with same sex couples, and Crystal and Casey did a great job capturing everything for my wife and I. We couldn't have asked for a better experience. - Emily - Nellysford, VA
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