Anti-Budgeting: How to Outsmart Yourself Financially

Posted On 19 November 2024

You’ve probably heard that you should save a percentage of your income. Have you ever felt frustrated when it comes to finding that money? You’re not alone. Have you tried to budget your money only to fail? Me, too! Let me introduce you to the anti-budget.

Here’s the good news: You already have money that you can save… you just need to find it! Parkinson’s Law states that work expands to fill the time available. The same law holds true for money. Expenses will naturally expand to match income! That is what is referred to as lifestyle creep.

The anti-budgeting strategy puts YOU in charge of your finances. You get to make all the decisions. Let me walk you through the simple yet powerful 5-step process that can transform your finances.

Step 1 – Track Expenses: Journalling Your Money

Imagine trying to use Google Maps without letting it access your current location. Frustrating, right? The same applies to your financial journey. Before you can move forward, you need to know exactly where you currently are standing.

Start by tracking every dollar you spend for a month. Yes, everything – from your morning coffee to your monthly Netflix subscription. Don’t worry about making changes yet; just observe and record. Use a spreadsheet, a budgeting app, or even a simple notebook. The method doesn’t matter as much as the consistency.

Remember: This isn’t about judgment; it’s about awareness. Think of yourself as a bookkeeper, simply collecting data about your spending habits.

Step 2 – Evaluate Data: Understanding Your Priorities

Now that you have your spending data, it’s time to make sense of it. This step is like reading the story your money tells about your life and values. Are you spending more than you thought on dining out? Do you have more subscriptions than expected? Are you saving less than you’d like?

Sit down (with your partner if you have one) and review the numbers together. This data is simply information for you – there’s no judgement. No one else will see this unless you show them. Look for patterns:

• Fixed expenses (rent, utilities, insurance)
• Variable expenses (groceries, entertainment, shopping)
• Necessary vs. discretionary spending
• Surprising expense categories

This evaluation phase often brings “aha” moments. Maybe you’ll discover you’re spending $100 monthly on subscription services you rarely use, or that your grocery bill could be optimized with better planning.

Step 3 – Make A Spending Plan: Your Extra Money

With a clear understanding of your current financial position, you can now map out how you can get to your destination. This is where the anti-budget comes in help your dreams become reality, and vague wishes transform into concrete goals.

You are the one in charge of deciding where to make the changes in your spending. Cut what you feel you can cut. Replace purchases (brewing coffee at home instead of buying at a coffee shop) without sacrificing your enjoyment. You can read about my experience in the post Let Your Money Tell a Story.

How much do you want to automatically transfer? Do you want to transfer this amount once a month, twice a month, or weekly? You can be conservative, or you can be daring with how much you save. This amount can be changed as needed.

Step 4 – Take Action: Moving Forward

This is where the rubber meets the road. Having a plan is great, but execution is everything. Start implementing the changes you’ve identified:

• Set up automatic transfers for savings
• Cancel unused subscriptions
• Negotiate better rates for services
• Look for ways to increase your income
• Create new spending habits that align with your goals

Don’t try to change everything at once. Pick one or two areas to focus on initially. I recommend starting with setting up automatic transfers into your savings. It will feel like a new bill, and like with bills, we figure out a way to pay for them!

As you make changes in your spending, you can re-direct that money into your savings, then you can increase the amount of the automatic transfers. Small, consistent actions compound over time to create significant results.

Let me talk a bit about this money that you are saving. The goal for this money in savings is to build your financial durability. Let it build up some, then pull some out for your carrying cash. Let it build up and you can transfer some back into your checking account, so you don’t have to pay a monthly account fee. Continue to let your balance build.

Another idea for you is to use half of the automatic transfers to go toward paying off debt with the Debt Snowball strategy. The point is to use this money to improve your financial situation.

Step 5 – Repeat: The Continuous Journey

Financial planning isn’t a one-and-done activity – it’s an ongoing process. Regular check-ins help you stay on track and adjust your course as needed. Life changes, circumstances shift, and your financial plan should evolve accordingly. Remember lifestyle creep? You want to keep an eye on that.

Schedule monthly or quarterly reviews to:

• Track progress toward your goals
• Celebrate your achievements
• Adjust plans based on changing circumstances
• Set new goals as you accomplish existing ones
• Identify areas needing attention

Remember, financial success isn’t about perfection; it’s about progress. Each step forward, no matter how small, brings you closer to your goals.

The Road Ahead

Your financial journey is uniquely yours. While these steps provide a framework, how you implement them will depend on your specific situation, goals, and values. The key is to start where you are, use anti-budgeting, and keep moving forward.

Don’t let perfect be the enemy of good. Start with small steps, celebrate your progress, and remember that every financial master was once a beginner. Your future self will thank you for taking these steps today.

Ready to begin your journey? Start with Step 1 today! Don’t wait for next week, or next month, or even next year. Your financial destination awaits! This simple plan can put you on the track to becoming unstoppable.