When I was a teen, I opened my first checking account. And from an early age, I found serenity in the inherent logic and order in processes (ahem, mega-money nerd here).
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I would diligently record my spending from late-night Del Taco runs and sundry clearance-item wares from Claire's in one of those old-school check ledgers. (Remember those?)
As I plodded along during my college years, I continued to track my spending. Here's the thing: All that precious data I collected about where my money was going? While it was helpful to a degree, I didn't end up doing much with it. What ended up being majorly important in helping me hit my money goals was a) I lived within my means; and b) I stayed on top of my savings.
After playing around with all sorts of ways to manage my money, including the ever-popular 50-30-20 budget and zero-sum budget, at the end of the day, I realized that the guilt-free budget was what worked best for me.
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This popular budgeting method is when you "pay yourself first," then spend the rest without remorse. If you're like me and hate tracking every expense, allocating take-home pay into neat categories, and feeling bad when you go over, then the guilt-free budget might be for you, too.
Here's why the guilt-free budget works so well, how to get started, and ways to make it easy:
First, using the guilt-free budget cuts back on decision fatigue.
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No-joke: Research reveals that we might make up to
35,000 decisions a day, from what to eat to whether to take the main drag or side streets home from work. I don't know about you, but I'm not a big fan of toiling over whether I can afford that cami I've had my eye on, or quibbling about whether I'm going to go over my "eating out" spending in a given month. All that is background noise to me, and it often leads to decision fatigue and needless stress.
With the guilt-free budget, I've freed myself from making so many money-related decisions. All I need to know is how much I have to spend on purchases beyond bills and the basics.
Plus, this kind of budget helps me prioritize saving.
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On this budget, meticulously moving money into different buckets, categorizing spending, and trying to make heads or tails where my cash is going doesn't really matter. As long as I "pay myself first" by saving a portion of my take-home pay, that's what's most important.
My savings approach has shifted slightly throughout the years. When I had a day job with steady income, I would tuck away the same amount each pay period. And now that I freelance, I save according to percentages.
And it puts my money goals on auto-pilot.
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No matter how stretched thin you might feel financially, no matter how many things you're juggling — those nagging bills, that looming debt, all those pent-up consumer wants — you most likely can afford to set aside a dollar every day or week. Guess what? You don't even have to really worry about keeping your money goals top of mind. Setting it and forgetting it will do the work for you.
If you set aside a dollar a day, that's $365 in a year, right? Bump that up to $10 a week, and that's $520 buckaroos in a year's time.My main go-to apps for auto-pilot savings are Qapital and Digit. Digit costs $5 a month, and Qapital has a free membership tier that lets you set up basic savings goals and rules. You might also be able to set up automatic recurring savings deposits through your bank.
Now that we've gone over why I think the guilt-free budget is pretty amazing, let's dig into how to go about putting the guilt-free budget into action.
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To make it work, you definitely don't need to be a math whiz, but you do need to be aware of some very basic numbers:
Incoming
• Your monthly take-home pay
Outgoing
• How much you need for rent and bills
• Your monthly debt payments
If you're not sure, money management apps likeMintorPocketGuardcan make it easier to calculate.Or you can also check bank account statements, or log on to your account, as some banks and financial platforms track your income and spending.
There are two ways you can go about the guilt-free budget:
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Method #1
The standard way to go about the guilt-free budget is to decide how much you want to tuck away toward your savings and then use the rest toward your monthly spending. This only works if you have an idea of your take-home pay and your expenses.
Interestingly enough, if you set a reasonable savings goal, you might be surprised at how you manage to spend within your means. When I started using this budgeting method, I committed to saving $250 per paycheck, or roughly $500 a month.
The year was 2006, and I was bringing home about $1,900 a month. Saving 25% of my paycheck was a lot, especially when I was living on my own in Los Angeles and over a third of it was going toward my rent. Because I was set on stashing $500 a month, I looked for all the ways to cut back on my expenses and made it work.
Method #2
Subtract your outgoing (aka bills and debt) from your incoming (aka take-home pay). Whatever remains is what you have left to spend on whatever you please.
This is a slight deviation from the standard guilt-free budget. But I've found it might be more doable if you side hustle or freelance and your cash flow goes up and down.
After my bills are accounted for and I've set aside some money for self-employment taxes, I typically save a percentage of what's left over. And when I was feeling particularly ambitious, I would divvy up the rest of what remained — for instance, 25% toward retirement, 25% toward a new car fund, and 25% toward my emergency fund.
While the guilt-free budget is pretty simple, you can up the Ease Factor on the guilt-free budget by getting ahead of your bills by one month. In other words, at the end of October, you'll have enough for your living expenses in November.
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You can do this by putting some of your tax refund, stimulus check, or "extra" cash from side hustling, toward "getting ahead." When I had a day job, I got paid every other week. Those "bonus" months when I got three paychecks instead of two? That extra cash went toward my "get-ahead" fund.
If your income is steady-ish or you're able to get ahead by a month, consider automating paying your bills as much as you can. That way, you don't have to painstakingly track when the bills are due and scramble to pay them on time. Ideally, it's all working beautifully in the background.
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Another way to make it easy: Put most of your bills on your credit card, and pay your credit card balance in full each month.
Or you might also try paying your bills right away when you get paid. That way, you don't have to do so much math.
If you're able to set up autopay for most of your bills, then the only number you need to really look at is your non-essential spending.
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So let's say your take-home pay is $3,000 a month, and your bills and major expenses such as rent, food, gas for your car, and cellphone bill make up $1,600. Let's say you set aside $400 toward savings.
In that case, you have $1,000 left to spend for your non-essentials. Break that up by week (there are 4.3 weeks in a month), and that's about $232 a week for everything else.
While I'm not one for traditional budgeting, I'm not dissing it, either. Depending on your style, preferences, and where you're at in your life, standard budgeting could be more beneficial.
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Traditional budgeting could be useful if you're trying to curb overspending, or if guideposts can help rein you in. Or maybe you need to start with a standard budget before you jump into a guilt-free one. Go for it. Nobody's judging. What matters most about your budget is that it works for you and helps you meet your goals.
