I Don’t Need A Budget, Because I Do This Instead


A year or so ago my friend and I were going for a hike and talking about traveling. I’ve always wanted to go to Ireland but could never find the right time to go. It looks like I’m finally going to go this fall, but anyway, my friend asked me what I spend my money on if not on travel. The question really got me. I probably answered by saying something about my rent and bills, but it got me thinking. What do I spend my money on?

Unless I’m saving up for something specific, like going on a vacation or to a concert, I’ve never created a budget. I’ve never really seen the purpose of one. Instead, I’ve cultivated a minimalist mindset, which to me, means buying what I need and saving the rest. Whatever savings I do manage to set aside, I view as money that I have in case something goes wrong, like my car breaks down, or I end up needing a medical procedure or something. It’s not every exciting, but it’s certainly practical. It’s about more than just that to me, though.

To me, minimalism is not just about having less stuff, it’s about being intentional about what you bring into your life. To think of minimalism when it comes to money sounds like a bad thing, because we would all like to have more money, not less of it. But for me, it’s not just about what or how much you have — it’s also about consciously choosing what comes into your life. That can be objects you own, but it can also be about what you choose to experience or how you spend your time.

It’s a mindset and way of life that can also be healthy for your finances. For me, it’s less about pinching pennies and sticking to a budget, and more about thinking intentionally about how I choose to spend my money. It’s kind of like the difference between losing weight as a result of focusing on more overall healthy choices, and losing weight by restricting the amount of calories you consume.

Essentially this is how I think/what I do instead of having a budget:

1. The common wisdom says you should save x percentage of your paycheck for your monthly bills, x percentage for incidentals, and x percentage for savings/retirement. Instead, I think of my paycheck as 100% savings and think of my bills as cutting into that savings.

2. I don’t have a grocery budget. Instead, I write a list of things I need and shop from it. Sometimes my bill is more than $50 a week and sometimes it isn’t, but I don’t stress because I know everything I bought is stuff I will actually use. Whenever possible, I cut costs by using coupons, buying generic, or by buying toiletries and other items where I can get them cheaper (not always the supermarket). If I have things in my cabinet like bread crumbs or spices leftover from previous recipes, I try to cook things that will use them up, rather than let them expire or go to waste.

3. I only keep items in my apartment that I use or love. If you consciously keep your belongings pared down to the essential comforts (you don’t even have to be extreme about it), then when you go to the store, you don’t feel the need to impulse buy from the Target dollar bins, or whatever your weakness is. In the back of your mind, you know it’s clutter you’ll eventually get rid of anyway, so you choose not to spend money on it.

4. With less stuff, you can dedicate more energy to selling items when you no longer need them. When you always have a surplus of things, it takes way more effort to sell a bunch of items (think: selling on eBay), making it more likely that you’ll donate them rather than try to recoup some of the money. Although donating is great, too!

5. I sweat the small stuff. Is it really important that this cup of coffee come from Starbucks, or can I drink the free Keurig coffee back at the office? I don’t deprive myself, but I make sure I buy mindfully rather than for the sake of convenience, even if it’s something little. I think critically before committing to an experience. What’s the purpose behind it? Relaxation, time with friends, something else? Knowing what you hope to get out of an experience helps you make sure the money is well spent. If you want a vacation to catch up on your creative projects, why spend money on a plane ticket when a staycation will do? If sitting on a beach is really what you want, then is using some savings (though not all of your savings) what you want to do? Maybe yes, and maybe no. It’s circumstantial, for me.

Some of us have more wiggle room than others when it comes to savings and this is in no way meant to minimize the stress that comes with paying off student loans and debt while trying to make ends meet. But my point is that my approach to money is mindfulness and practicality 100% of the time, which I think of as a “minimalist mindset.” I think of my money as “born as savings” and then use it accordingly, and for me, it accomplishes more than a budget could.

Image via Unsplash

  • Summer

    This is an interesting approach, and I think I inadvertently subscribe to similar principles. I don’t have a set budget either. With each paycheck, I first transfer some money to savings, then I pay whatever bills are due between that date and when I’ll receive my next check, and whatever is left is what I have to work with for groceries, entertainment, incidentals. I’ve never been much of a reckless spender in the first place, so there’s never really a lot of temptation to go randomly buy stuff just for the sake of swiping my card. Thanks for the unique perspective!

  • Mary Harman

    This is very similar to my mindset when it comes to budgeting. I’ve always dealt with my income as ‘savings’ and then subtracted out rent, food, bills, etc from that, which did cut down on my ‘fun’ spending, even the small stuff that can add up. This system worked great for a long time, but I realized last year, though, that this doesn’t always work. I moved to a city where my rent, while not too exorbitant considering the location, was 3x more than it was before I moved. I suddenly found that my bank account would have slightly less than what I needed to dole out to my landlord or my student loans, or at least it would for a few days each month between paychecks. I never really got on the Hardcore Budget Train, but I did have to sit down and look at all my bills and see how much I reasonably could spend on groceries and other essentials.

    I’ve since moved back to the area I was before and have found myself once again using this system. It’s a great system and way of thinking, but I think it’s conditional. If your rent/loans/medical bills/etc cut too deeply into your income, you do have to sit down and assess where your money is going. I realized I was privileged before to save mostly everything I was making minus the bills. I could put on an attitude of not sweating it if my grocery budget was high one week because I knew it was cutting into savings, rather than rent money.

    tl;dr This is a great mindset to have and does encourage savings, but I think it also requires a hefty difference between income and expenses to gain the full benefits of this method.

  • TLK

    I do the same. I set aside just over 50% of my income for savings each month and the rest I spend as I wish on bills, food, fun times, etc. It’s the pay yourself first mindset. Saving is my #1 priority once that is taken care of I don’t feel pressure to spend my remaining money any certain way because my top expense is taken care of.

  • This is what we do, too. I know about how much we spend each month on bills, and we keep a close eye on our bank accounts so if we have unusually high amounts of spending one month we’ll know to cut back a bit the next month. In the long run it doesn’t matter if we spent $20 dollars more this week on entertainmen and $20 less on groceries as long as we’re making steady progress towards our financial goals.

  • I’m glad you included the last paragraph about having wiggle room, because this is a great approach for someone who isn’t living paycheck to paycheck but a lower salary and/or higher fixed expenses and debt could make this really challenging.

    The Frugalwoods take a similar approach (but to the super extreme) and it totally works for them. (They have a blog you should check out!)

    As for me, I started budgeting when I had a lot of short-term savings goals I needed to focus on. Since getting serious about my budget (I use YNAB) I’ve had six weddings, three moves, and a handful of long weekend trips, plus some unexpected medical expenses. I would definitely have lost track of the amounts I needed for each of those if I hadn’t been really focused on specific savings goals.

    I think that when we find something that works for us and allows us to meet the financial goals we set for ourselves, whether through a budget or mindful spending or earning more or something else, we should run with it!

  • Interesting approach! I do a mix of a normal budget and this, by allowing for a regular amount for food, bills etc and then adding up costs as I go along, to be left with a “remaining” sum that’s salary minus everything else (inc a set savings amount). Seeing the bonus savings I could have helps me spend less!

  • Caila Henderson

    I take a very similar approach! Except I take monthly bills out (minus groceries) first and then the rest is “100% savings” and anything I purchase after that cuts into the savings.
    I love the mindset of really taking the time to consider everything you buy – from coffee to an investment piece of clothing, I try to do the same!

  • Kalee Cowan

    As someone who started a budget about 6 months ago where I record every dollar spent, I enjoyed reading your view because it’s different than my own. Just curious, though, have you always had this mindset about budgeting? And/or have you ever recorded your monthly spending to compare how it looks in your mind versus how it looks on paper?

    • Summer

      One thing I’m always curious about is when people talk about recording their spending… How is this really any different from reviewing transactions on your checking account/credit card account? I do of course find that I am more aware of my spending when I force myself to look at my accounts on a daily basis, rather than just perhaps weekly, but I often wonder what people gain when they take the time to scribble “$1.60 croissant, $7.82 CVS, $35 gas” on a piece of paper instead. Is it more of a reality check than simply logging in, or? Not being sarcastic or disrespectful here at all, I’m genuinely curious!

      • Kalee Cowan

        For a little background as to why I started a budget: I’ve worked since I was 15, and I’m extremely lucky to have very few bills because I live at home with my parents, and I don’t have students loan, so I’ve always had a fair amount of spending money. What I mean is, I’ve never faithfully kept up with my checkbook because I knew I had money in my account. I’m planning a big, out of state move later this year, so I started a budget last October. What I didn’t realize before I started this budget was that every dollar spent adds up a lot quicker than I realized. Before, I would walk into Target and spend $100 without thinking and not actually know what that $100 was spent on, or I’d spend $20 a week at Starbucks without realizing that $20 a week for a year is over $1000. So, I figured if I started a spreadsheet where I recorded every dollar spent, I could see where my money was going compared to before when I would look at my bank/credit card statement and only pay attention to the balance. With the spreadsheet, I see how much money I receive each month and how much I spend. Sometimes, I end up spending more in one month than I’ve made. With a spreadsheet of every dollar spent, I can look and see that I spent way too much on eating out or clothes or books. With the spreadsheet, I know exactly where my money went as opposed to looking at my credit card statement and seeing that $100 when to Target, $75 went to Amazon, etc.

        Another thing that made my want to record every dollar is that I have a few people in my family who always borrow money from me when they need to pay a bill or buy groceries. They pay my back when they receive their next paycheck, but then they’re already starting a new month behind on money. I can see that they spend recklessly (eating out too much, buying drinks from a convenience store every day instead of buying a case from the grocery store, going on vacations they can’t afford), but they can’t see how much they spend because they don’t have a budget. I’ve told them several times to record their spending so they could see where their money is going. I firmly believe that if they would did this (even if they only do this for one month), they would see what I see, which would help them spend less on things they don’t need.

        • Summer

          Great response and I totally see your logic. Thanks for the explanation!

          • Kalee Cowan

            Of course:)

      • Heather

        For me, it helps keep me accountable. My weakness is cheap little purchases that add up (nail polish, magazines, lattes, etc) Knowing that later today I’ll have to record the purchase makes me think twice about whether I really need a coffee or another oversize sweater. There was an article awhile back on this site that was titled “things I regret purchasing”. At the end of the day when I’m typing in the day’s spending, I want to be pleased with every purchase and not feeling silly about how I spent $30 in little unnecessary “regret” purchases.

        • Mary Harman

          This is how I’ve always felt when I tried to look at my spending. They always suggest writing down everything you spend for X days to get a grasp of where your money is going. But when the act of truly putting pen to paper is brought into the equation, I find myself withholding from my usual purposes. That is generally a good thing, but never gave me an honest picture of where my mistakes were.

      • Mary Harman

        Summer, I feel the same way. To me, it’s just as effective to look at a surprising credit card balance and see that the total is higher due to the Evil Little Things–like when I see that I spent $75 in a month things like grabbing a soda when I stop at the gas station, etc. Seeing them added up on my card versus in a little notebook is the same to me, except I’ve saved the time/hassle of writing it all down. This, again, comes from a place of privilege where I can wait until the end of the week to catch slip-ups, rather than in the moment.

        But, on the other hand, some people need the tactile nature for it to feel real. I feel that way about taking notes in school or meetings. It doesn’t have the same effect as typing them into a Word doc. It very well could be different strokes for different folks.

      • This doesn’t really happen anymore, but when I would review my debit card statements I’d often find myself freaking out about who spend $60 in Texas when I was in Delaware. For some reason Amazon.com’s billing address was registering as in Texas on my statements (this would be like 5 years ago), and it would take me a while to match the amount I spent on amazon with the amount charged to the Texas account. I think bank statements have become clearer now, but I used to get a bunch of totally legit “unknown” charges, like there the address would be listed instead of the store.

  • I really like this way of thinking around money because for me, if I consider income to be savings by default, then spending money on random useless crap is a bit like I’m stealing from future me! Or maybe this is just my excuse for not properly making a monthly budget 🙂

  • jdub

    This is exactly what I do! I currently have quite a number of debts I’m working on paying down, so my money is directed to bills, then to savings, then whatever I’m left with is what I work with. It works pretty well to pay all the necessary things immediately (I’ve set up automatic bill payments so I don’t even need to see the money before it’s paid out), then just see your total living-money at the end.

    It also forces me to really think about what I “need” vs what I want to have. I save for bigger purchases from my living-money, so it definitely forces me to really think about and consider those large purchases. It can be frustrating to know that after I’ve paid everything I’m left with a smaller amount than I’d like, but as soon as I remember that it’s because I’ve been responsible and am chipping away at my financial goals, I don’t really miss it.

  • Vv

    I love this! I have a yearly budget which I check up on every now and then to make sure i’m on track–otherwise no budgets at all.

  • I loved this! I tried for a long time to budget but discovered that I was very bad at keeping an actual detailed budget so instead of beating myself up over it, I have developed a new system that works for me. I have a checklist where I have all my bills and their amounts listed, split to coincide my bi-weekly paychecks. When my first paycheck comes in I pay the first section of bills that are due, put money in savings, and the rest of my money gets me to the next paycheck.

    I live paycheck to paycheck because I am also trying to pay down my massive student loan debt, pay off the small debt I have through credit cards (sixth months and I should be done!!), and build a nice savings account. I also have a personal IRA and a 401k through work that I contribute too. Because I am fulfilling all my financial obligations first I don’t feel the need to create a detailed budget.

    It also helps that I am particular about what I spend my money on. I gave up Starbucks and lunches out over a year ago, because I hate feeling like I’m wasting my money when I make perfectly wonderful espresso and meals at home. I do “treat” myself when I go out with friends, because it isn’t that often and I don’t go crazy. I don’t buy tons of makeup (even though I love makeup youtube channels), preferring to buy a few good quality things every 3-4 months when I need to. I actually feel more responsible when I make these purchases now because I’m not excessively spending by buying a ton of cheap stuff constantly.

  • Paul

    A really great way to look at things. Those who read a lot of blogs and look at their finances gradually reach the conclusion of your paycheck is your savings etc. I think the most difficult thing is the minimalism. Mostly it is a mindset and something that needs to he adopted by both in the household. It makes a lot of sense, but unfortunately sense is just not that common.

    We just need teens to think this way before they leave home.

    Great post. I look forward to reading more.

  • Frugal Millennial

    I take a similar approach!

  • BAMFmoney

    I have never set a budget, but add up what I spend each month just for tracking. Love your first point, I always loved saving most of my paycheck to invest and hated any expense that took away from that

  • Puneet

    I think this is among the most important information for me. And glad reading your article. But wanna remark on few general things, The website style is ideal, the articles is really excellent

  • I struggle with the minimalist mindset but I really see the benefits. Good for you building your savings and helping the environment at the same time by wasting less.

  • Thank you, thank you, thank you! I have never had a written budget (though I do track my spending) and I am so tired of seeing article after article telling me that I’m headed for financial disaster because I’m not planning out where every dollar goes. The way I see it, I don’t need a budget, because I’ve cultivated the same “minimalist mindset” you have and questioned *every* expense. I’ve been doing this for over 20 years, and in that time I’ve paid for my own wedding, bought and paid off a house, bought a new car with cash, and squirreled away a sizable sum for retirement. If that’s financial failure, I’d like to see success!

  • Nicole

    This was an enjoyable read. I have few monthly expenses compared to my income, so I think this way about my money as well. It’s more intuitive and easier for me. I’ve worked in banking though, so I’ve been made to feel guilty often because I don’t ~budget~ like everyone else. I still live within my means and hold no debt beyond my car note but still often feel somehow inadequate to a person who keeps a strict budget. I’ve tried the envelope(s) method, recording my purchases on paper or an app, and in the end what you describe works just fine for me. I, too, sweat the small stuff.