How to Live Happily Without a Budget

Three years ago, we sat down and built our budget. We spent 9 months adding the non-monthly bills that we forgot about when we created the budget.   Setbacks and shortfalls almost killed the budgeting plan completely. It took almost an entire year to get our budget right.

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Now?  I refer to the budget once per month.   No more.   I don’t check it at bill-paying time. I don’t think about it daily.   It’s there as a reference when I need it, but it no longer drives our finances.  How did we get to that point?

First, we firmly established our budget.  We know exactly what we need to cover our expenses.   None of the predictable bills catch us by surprise any more.  This is important.

Once we had the budget established, the rest was easy.   I moved almost every bill to US Bank’s online bill-pay system and switched to electronic billing and automatic payments.   The automatic payments are all through US Bank.  I only allow my mortgage to be set up with the merchant. I want total, instant control over the rest.  I won’t call a merchant to ask them to change a payment if something comes up.   The bank sends me an email when a payment is automatically scheduled, and again when it is paid.

Once I got comfortable with the automatic payments, I switched to electronic billing. I don’t need to see the bill or waste the paper if I know it is being handled for me which is why I encourage you to manage all your finances online.  I do check the few bills that may change, like the credit card and cell phone.  Now, I see few of my bills.  They are all sent electronically to my bank, automatically paid, and scheduled in Quicken–all without intervention from me.

[caption id="" align="alignleft" width="196" caption=" "] [/caption]We also use an envelope system.  I know how much we need for groceries, baby crap, clothes, etc.   At the beginning of the month, I take out all of that money in cash and put it into the appropriate envelopes.   Other than this money, almost everything else takes care of itself. I don’t need to pay attention to by bills on a day-t0-day basis.   Any extra money that comes in gets divided among our debt repayment and savings goals, which only takes a few minutes to arrange.

I glance over my budget at the beginning of every month, but I only review it when something changes. If we change our cell phone, or our budgeted gas bill changes, I make the change to our budget.  Other than that, it’s not even an afterthought.

That’s how we do it.

Another option includes the Sloppy Math System. This consists simply of rounding deposits down and rounding expenses up.  The more you round, the better the system works.    If you round every deposit down $50, and round every expense up to the next $10, you are naturally building more room for error.  Given enough time, you will have enough of a slush fund to handle emergencies and the occasional impulse purchase.

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    1. Im on the boat of nonbudgeters. I don’t sweat over where every penny is going or view how much I spend on dining out. I focus on the total income vs total expenditures. If I’m positive by a large margin, I feel I’m good.

    2. I’ve never heard of the Sloppy Math System before – at least not by that name. That’s something I’ve done subconsciously for a long time!

    3. I only look at our budget now once a month too, but that is when I am entering every expense into it to see how we did compared to the budgeted amount. Overall, it’s more of a history record now instead of a budget…

    4. We do almost everything electronically as well. It seems like I spend no time paying bills anymore. Technology has definitely made our lives easier in that regard.

    5. Never called it that but I use the Sloppy Math System and really like it.

    6. I think both systems make sense – I guess it just depends on what kind of spender you are. Of course, like you, everyone should start with a budget. I agree with Sherrian – I think the “sloppy math system” is something a lot of people do subconsciously. Good to know it has a name!

    7. We tend to spend the same amount each month — which makes it easier to non-budget!

    8. Offshore Processing says:

      I am also in the boat of nonbudgeters. We live modestly, we don’t go out much and I believe we fall into the margin of frugal living. However, during windfalls our expenses spikes up easily due to the lack of budget. More resources mean more reasons to spend too. The common reason is seen in this statement:
      “It’s hard to fight lifestyle inflation when I think I deserve all the good things in life…

      Best regards,

    9. I have a budget and like you don’t check it all the time. I know where my money is going, when things need to be paid and much of it is automatic.

      Once you know it and set it up, I think it is easy.


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