How to NOT Live on a Budget

Pretty much everyone and their grandmother will tell you that in order to become financially secure you need to have a budget in place that you can live with.  In fact, if you read personal finance blogs or finance news sites- you're probably a little sick of hearing about the importance of budgets.

Is it possible to avoid having a budget?  Can you get away without creating excel spreadsheets or filling pages of notebooks with lists of your expenses and subtracting them from your income to see if there's anything left over to see a movie this week?

You can avoid the "hard work" of creating a budget and trying to stick with it, as long as you understand that you can't spend, spend, spend.  It seems pretty simple, doesn't it?  If you are one of those people who think "budget" is a bad word, and have never had any luck with creating or sticking to it, why don't you try this method of living without a complicated, over-thought out budget?

Get a checking account if you don't already have one, and a savings account.  You can link them together if you like, so that it's easy to transfer money between them.

Have your income deposited into your checking account every single time you get it- if you have the option for a direct deposit, use it.  Every week, keep about $40 in cash.  This is your entertainment, spending, miscellaneous money.  See if you can make it last all week until you get more.  Pay your bills from the money in your checking account as they come due (preferably before they are due, to make sure you never pay late fees).  Put everything that remains after paying the bills into the savings account.

That's about it.  Now, if you know that next week you're going with a group of friends to dinner and a movie, you are probably going to need more than $40 cash.  You would want to keep some of the previous week's $40 in order to have enough - this takes a little more discipline if you typically burn through the $40 on Friday night and then have nothing left over for the rest of the week!  Don't dip into the checking account or savings account because then you've blown your it's-not-a-budget method. While this isn't exactly a budget, it does take a little planning and consideration about how you spend the $40 you get each week- so consider your purchases carefully.  You might decide to skip the McDonald's lunch in order to keep more of the money for buying that new CD that gets released on Tuesday. 

The reason most people are in over the heads in debt is because when we want something, we just get it.  We don't plan for it, we don't think about where the money comes from in order to get it, or what we might have to give up in exchange for that something.  If you can wrap your head around this and learn to live within your $40 a week for a few months, you'll probably create new spending and saving habits.  (And after a few months, you may decide you are able to give yourself more than $40 a week, I was just picking a number I thought most people could reasonably afford and still pay their bills).

The only reason this method of living without a budget wouldn't work, is if you don't make enough to cover your expenses.  In which case, it's time to cut back on your expenses (which is something you can probably do even if you DO make enough to increase the amount of money you are able to transfer into the savings account each pay period!) or increase your income.