Focus On Cash Flows, Rather Than Expenses, To Spend Without A Budget

Focus On Cash Flows, Rather Than Expenses, To Spend Without A Budget

Budgets are a great way to keep track of how much you spend — but they’re not the only way. Finance blog Money Ning suggests automating your necessary cash flows, then spending the rest.

Currency picture from Shutterstock

As the site explains, we all have static expenses that have to be covered every month: rent, insurance, debt repayment, and savings. Once these are covered, however, budgeting every single extra category starts to become cumbersome. It can be impractical to budget every single time you'll feel like eating out or making an indulgent purchase. If you pay for the important stuff, though, you don't need to:

Long ago, my husband and I figured out our priorities, and our automatic withdrawals reflect those priorities. Items that are automatically taken out of our account each month (and automatically accounted for in our personal finance software) include:

  • Charitable donations
  • Retirement account contributions
  • Rent payment
  • Insurance premium payments
  • Student loan payments
  • Car loan payment
  • Emergency savings (small amount to high-yield account, greater amount to taxable investment account)
  • Amount to be used for quarterly tax payments

Basically, as long as those things are covered, we don't worry about budgeting the rest of our money. The important things are covered, and we spend what's left until it's gone. If we have a specific goal (like I'm planning a trip, or my husband wants to buy the latest to-scale depiction of a superhero), we set aside a little for that in the course of the month.

"Spending the rest" may not seem like the most frugal financial advice, but it hinges on a key detail: savings. As long as you have budgeted for all the money you owe and set aside savings, you're doing everything you need to do. Of course, that doesn't mean you should blow through every dollar you receive. If you can pay down a credit card faster by eating out a bit less, that's a good thing to do.

However, in most cases, nitpicking over individual purchases isn't as helpful as creating a sweet rewards points.

How I Track My Money (and Still Save) Without Using a Budget [Money Ning]


  • And for the rest of us, for whom this doesn’t work well (“spend what’s left” just sounds like an invitation for some random auto-debit for a service I signed up for last year to drop me below zero), there’s Pocketbook. (I swear by Pocketbook’s “Safely Spend” feature, which gives me a virtual balance I can spend down, without transferring money for my bills and savings out of my main account until the bills are due.)

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