Despite your best efforts, is budgeting not working out for you?
You need an alternative approach to help you save money and make the most out of your monthly income.
Look no further. We go beyond budgeting and tell you how to reach your financial goals without a budget in sight.
What is beyond budgeting?
Beyond budgeting is the idea of taking control of your finances by removing your personal budget and using alternative methods to save money instead.
Budgeting isn’t for everyone, and it’s entirely possible to reach your financial goals without one.
The benefits of beyond budgeting include more freedom to spend your money as you wish and no time spent with numbers or a spreadsheet.
Alternatives to budgeting
Read through our suggestions below and choose a method that fits your lifestyle and financial aims.
Change your spending habits
Do you know how much you spend on monthly subscriptions every month?
Subscription services are everywhere you look, which can make them hard to resist.
But it’s never too late to change bad habits. American viewers spend $47 a month on streaming services. That’s $564 a year.
Watch out for hidden subscription services where you believe you’re signing up to a one-time payment but are actually signing up to a monthly commitment.
Make a list of all your unnecessary monthly expenditure, including any:
- Food or drink subscriptions.
- Streaming and audio services.
- Video games.
- Beauty products.
- Fashion and jewelry.
- Books and magazines.
- Gym or exercise classes.
Paying for subscriptions that you don’t actually use will eat away at your income without you even realizing it.
There are cheaper, and sometimes free, alternatives to your favorite Netflix, Audible or gym memberships.
Rent seasons of TV shows or movies from your local library or listen to podcasts instead of paying monthly for your audio.
Instead of going to the gym, walk, run or take free online classes.
If subscriptions aren’t your financial weakness, maybe candy or junk food is? Whether it’s food, alcohol, video games, eating out or shopping, we all have a way to deal with stress.
But if you want to save money, it’s time to kick your comfort habits and consider new, less expensive habits such as walking or reading.
Hang out with frugal people
As humans, we copy the habits of the people we spend time with the most.
This means that if you hang out with people who spend a ton of money, you are likely to do the same.
Make a list of the people who you spend the majority of your leisure time with.
Then make a note of the top three activities you do with them.
If hanging out at the mall or going for expensive meals is on the list, you may want to reconsider the company you keep or the activities you do if you’re serious about spending money.
Or how about collectively trying to be frugal and finding alternative ways to spend time together that doesn’t cost money?
Do everything yourself first
If you can do something yourself, save money rather than paying someone to do it for you.
- Make your own coffee at home rather than buy a take out on your way to work.
- Clean your house weekly rather than fork out for a cleaner.
- Do your own laundry instead of going to the laundromat.
- Make homemade gifts and skip the store-bought presents.
- Learn how to change the oil in your car and save trips to the garage.
- Cook your own dinner and stop eating out regularly.
- Rake your own leaves and cut your own grass.
- Walk or use your bike to travel rather than use public transport.
- Before you call a plumber or handyman, see if it’s something that you can fix yourself.
If you regularly pay for most of the services described above, don’t stop them all at once.
Choose one of two to start with and then gradually add more. You’ll be surprised at how much money you can save over a month.
Pay yourself first
One of the most common reasons people don’t like budgeting is the effort of keeping records for your income, outgoings and expenses.
An easier alternative is to pay yourself first with how much you want to save, for example $200 a month, then spend the rest any way you want to.
By putting your savings away at the start of the month you don’t have to worry about whether you should be buying that takeout coffee or taking a cab.
To start, set a savings goal and a date that you want to achieve it by. Work out how much you need to save each month to meet your target.
You should aim to save at least 20% of your income and use the remaining 80% on anything else.
Next, set up a separate account to keep your savings in so you don’t dip into it for your day-to-day expenses.
Finally, set up an automatic payment from your main bank account to your savings account to keep your savings efforts consistent.
Anything that’s left over can be spent as you wish, taking the stress out of creating a budget but still allowing you to effectively save money every month.
Track your spending
Sometimes, being aware of your spending is enough to take control of it.
Unlike traditional budgeting methods, this way of tracking your spending habits doesn’t require you to set limits on your spending but lower each spending area until you are comfortable with it instead.
Start by writing down all of your monthly income and expenses.
Now, every time money comes into your account or leaves it, write it down.
You can set up automatic alerts with your banking app to help you monitor activity on your account.
At the end of the month, go through your outgoings and sort them into categories such as food, household, car and entertainment.
Now work out what percentage of your income you are spending in each category. For example, if you earn $2,000 per month and spend $800 on a mortgage, your household category would be 40%.
If the figures in each of your categories seem too high or low, set a goal to change it.
For example, if after analyzing your spending you realize that you spent $300 on eating out last month, you could set a goal to cut that amount in half by eating in more.
Before the start of a new month, check how you did with your goals.
If you didn’t meet them, roll them over to the next month. If you did, set yourself some new ones.
Negotiate your monthly bills every year
An effective way to save money without budgeting is to renegotiate your regular bills annually.
This includes your mortgage, utilities, car insurance and any other monthly expense. Use comparison sites to see if you could get a better deal.
Call your current service provider and ask if there is a cheaper alternative.
Also, look at whether you use all of the services you currently pay for, or if you can downgrade your package to save some money. For example, do you watch all of the channels you pay cable for? Could you lower the package and pay less?
Don’t be afraid to walk away and sign up with a new provider if you can get a lower price elsewhere.
Alternative budgeting systems
If you’ve never been a fan of budgets, hopefully, our beyond budgeting principles have inspired you to ditch the spreadsheet for good and adopt a different way to save money. For more tips on how to manage your personal finances effectively, browse our extensive library of resources.