Oct. 29, 2019

Skip The Budget And Still Reach Your Savings Goals

Too many people don’t tell their money where to go, and instead wind up asking where it went. While we have tried all manner of budgeting techniques, none of them truly make money management painless. That’s why we have progressively moved towards the anti-budget.

What Is The Anti Budget

It’s starting with the end in mind. Do you want to save 10% of your income? 50%? $1,000 a month? Whatever your goal, just decide how much and where you will put it. Make it happen automatically and then live off the rest.

My understanding of this method comes from Paula Pant at Afford Anything. She has been popularizing it for many years now and it makes money management very simple.

Here is how my money works in one simple chart (ranked by priority):

Simple as that

You might be wondering why I wouldn’t max my 401k and take advantage of the tax benefits with any left over. The reason is found in this article. I’m trying to avoid a Required Minimum Distribution (RMD) tax bomb.

Why Is It Better?

Instead of having to consciously figure out where all my money is going, I set it and forget it. If I’m saving 30-60% of my income automatically, I’m doing great already. Why bother that I went $32 over my grocery budget, $17 over my utilities and $102 over my miscellaneous. I’m already automatically doing what I need to do to reach my goals.

Systems are better than goals. It’s one thing to start listing off goals but struggle to gain traction. If you can set up the system to make this automatic, it’s almost impossible to miss the goal.

How Much Should I Save?

Check out this calculator and plug in what you make and play with the numbers. Maybe you’re starting from debt or just a few grand. See when you might feasibly want to be financially independent. There is something to be said for tracking expenses diligently for a few months to get an understanding of your average monthly spend. The Zeta app can help with tracking, as can Personal Capital. If you can take your average month and extrapolate an average yearly spend, just multiply that number by 25 and that is your ballpark.

Keep learning and studying financial resources and you’ll get things figured out soon enough.


The inspiration for this post came from this awesome chart that the Penny Hoarder made. They basically take you through the 7 Baby Steps that Dave Ramsey teaches and beyond. While I think this is awesome, I have now started with this backwards approach and want to begin with the end in mind.