The author, Olivia Christensen, right, with her husband. Olivia Christensen I’ve never been able to stick to a spreadsheet or budgeting app, so I’ve developed my own system. My husband and I work together to set financial goals, then set our spending levels accordingly. We also check our bank balances regularly so we know how much is coming in and going out. Read more stories from Personal Finance Insider. As a personal finance writer, the benefits of budgeting make up a solid 75% of my financial advice. Unfortunately, when it comes to taking this advice myself, I have tried and failed on many occasions. With dozens of budgeting apps and shareable spreadsheets at my disposal, I don’t have a single good excuse for these failures. I’m not the only one at fault for my family’s lack of a budget, though. While my husband is usually more optimistic in this regard and always seems to have a shiny new budgeting app he’s certain is about to change our lives, he typically gives up as soon as the initial excitement has worn off, too. But I’ve accepted our limitations, because If I were to distill the other 25% of my financial advice, it would be: “Know thyself.” Why traditional budgeting never works for us Right or wrong, personal finance writer or not, I have accepted that I’m not a person who will track my monthly expenses on a spreadsheet, in an app, or in a leather-bound journal, and control them accordingly. Traditional budgeting isn’t for me. I find the apps that connect to our bank account and break down our expenses with a handy pie chart more soul-crushing than helpful. Because while my husband sees “Target” and thinks “Olivia’s happy place,” I see ” toilet paper , back-to-school supplies, and sure, a face-contouring kit whose marketing team really knew what they were doing.” We end up arguing, and since the app that was supposed to ease our conversations is mostly to blame, we never use it again. I know not everyone can relate to our struggle. Many people have a budgeting app they swear by or they spend Thursday nights with their partner and a bottle of wine poring over a shared spreadsheet. But, if that’s not you — if deep down you recognize, like I did, that you’re never going to magically wake up the kind of person who can account for every dollar to your name and a plan for how you’ll use it — I am going to share with you the three ways my husband and I have overcome our inability to use a traditional budget while remaining financially fit. Popular Articles Best travel credit cards Average stock market return Best mortgage refinance lenders Best cash-back credit cards Today’s 30-year mortgage rates Our 3-step alternative to traditional budgeting
1. Setting financial goals While examining the details of our expenditures usually leads to arguments, and we’ll trade Thursday nights with a spreadsheet for a binge-worthy dramedy every time, […]
While examining the details of our expenditures usually leads to arguments, and we’ll trade Thursday nights with a spreadsheet for a binge-worthy dramedy every time, staying financially fit requires us to expend at least some energy on strategy.
For us, the first part of creating a strategy begins with goal setting. If having a couple thousand dollars saved up by the holidays is your financial goal, you don’t have to mark up a spreadsheet to get there; you can simply set aside $150 a month. A spreadsheet may help you organize your strategy, but if that isn’t for you, set up a monthly transfer of money to the appropriate savings account and move on.
For your financial goals to work though, they can’t just be lofty ideals, they have to be at the center of how you spend your money. For my husband and me, our financial goals determine our financial priorities, and while these priorities may never get written into law in the form of a traditional budget, they do translate into our choices. First, we pay our bills. Then, we put money towards our financial goals (retirement savings, pool fund, vacation, etc.), and any money we have leftover determines how often we order takeout and whether or not we’re getting the name-brand toilet paper that month.
Of course, this method assumes that we will have money leftover to live on after we take care of our bills and financial goals. This brings me to the second thing we do in lieu of a traditional budget: We make sure our financial goals are determined by our financial realities. This is where the personal finance gurus heave heavy sighs and mutter, “Yup, that’s what budgets are supposed to do,” but I’ll continue ignoring them and tell you what my husband and I do instead.
Every time our financial situation changes, we do the math. For instance, if one of us gets a raise or a student loan comes out of deferment, we pull up a spreadsheet and calculate how this will change our finances. We do this infrequently for all the same reasons we can’t stick to a budget, but a rough outline of our position works for us because a rough outline allows us to calculate how much money we earn and how much we typically spend. We keep this number in mind when setting our financial goals and taking on any new bills to make sure we always have enough to live on every month.
I recognize that this loose system of thirds — bills, goals, and life expenses — may sound recklessly abstract, but my husband and my lack of a traditional budget doesn’t mean we’re surviving on hope, prayer, and a complicated network of credit cards either. We keep track of our finances; we just skip the budget part and get our numbers straight from the bank. We do this by regularly checking our bank balances and signing up to have alerts sent to our phones every time money comes in or out of our accounts. This tracking method keeps us aware of the specifics of our financial situation in real-time.
I see traditional budgeting as a very effective middle man, which means by cutting it, I am agreeing to track and organize my money myself. This hands-on approach to keeping our money on track in confluence with our broader financial position, all in service to our financial goals, functions as a living budget. While this living budget doesn’t have the stamp of approval from the conventional wisdom that a traditional budget has, it works really well for us in a way traditional budgeting never did. And in the end, the best budget is the one you’ll actually use, even if technically, it’s not really a budget at all.
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