today we’ve got some big news to share: we do not follow a budget.
we know. we’re gonna lose our FI cards for saying it. it’s not just FI gospel, but personal finance gospel, that everyone needs a budget. but we’re doing just fine without one. we’ve shared that we are not naturally frugal, and for us, trying to follow a line-by-line budget feels both overly restrictive, and too much like a diet in which you’re tracking calories. it’s not sustainable. following a budget makes us constantly want to cheat, or wonder when the diet is over. (we swear we aren’t as rebellious as this makes us sound.)
instead, we focus on forming good habits and spending consciously, and think that with those good habits, we don’t need a budget. here’s why:
- we have made ourselves price conscious over time on groceries and the very few drugstore and home items we buy (we mostly try to make things at home, less to save money, and more to avoid the unnecessary chemicals), and we only buy what is priced well, meaning that saving on groceries is a very solid habit at this point. we rarely succumb to impulse purchases, except sometimes at the farmers market.
- we have trained ourselves over time not to buy stuff, and we don’t put ourselves in a position to be tempted. we avoid most stores, all malls, and most online shopping sites. so we’re not spending mindlessly on things we don’t need. the few things we do need we consider carefully, and do our research to find the best deal.
- we don’t have kids, which sound pretty expensive to us. all those clothes they are constantly outgrowing, and school supplies. nevermind the toys and gifts for all the birthday parties they get invited to. we practically break into a sweat just thinking about what most parents spend on kids (though we know many FI bloggers have set the bar for limiting spending on kids, while teaching them the value of living with less stuff — which is awesome).
- we have dogs, but they are small and don’t require much food or any grooming (short haired breeds are the way to go!).
- we have no problem traveling like dirtbags, meaning we’re happy to camp or stay at a super cheap hotel. of course, we are making a killing on hotel points while we’re still working, so we don’t need to make a habit of motel 6 stays, but we for sure don’t require our hotels to have multiple stars. what we won’t do is eat fast food, but we make up for it by packing our own food and cooking on the road.
- we’re already set on “stuff.” while our spending habits may make us sound like minimalists, we are for sure not. we have a house full of stuff. some of it we wouldn’t buy over again if we had the choice (like books — we love books, but weren’t as into the library as we are now for a lot of years), but most of it we use and get a lot of value out of. our key has been to buy for quality over quantity, and so very little of what we own will need replacing any time soon. we think it’s worth spending more if something will last longer, and that means that once you have everything you need, you can literally go years without buying a thing!
- we work from home, and we’re not fashionable. translation: we don’t need a lot of work clothes, which can be a major source of spending. when we do buy clothes, we never buy what’s trendy, and only buy something we can wear for years. we also avoid anything that requires dry cleaning, which turns some work clothes purchases into major long-term investments.
- we ask for splurgy things for gifts. we love lux experiences like massages, spa days and fine dining. there once was a time when we spent more than a few pennies on things like that which, even looking back, we still think is better than if we’d spent that money on stuff. but now, we make those occasions a lot more rare, and when it’s gift time, we’ve stopped asking for stuff, and instead ask for gift certificates for spas and restaurants. (to be honest, we’d prefer to quit exchanging gifts with family entirely, or just do charitable donations in each other’s names, but as long as the rest of the family still wants to exchange gifts, we’ll stick to this approach.)
- we keep ourselves accountable by having our savings and investments come out of our accounts automatically. and those auto investments are a big percent of what we earn, so we are careful to make sure the money is always there on the draft date. we are borderline obsessed with growing our investments and getting to early retirement day as soon as we can, so we’re highly motivated not to do any spending that would jeopardize that.
bottom line: we’ve trained ourselves over time to be smart about spending, and to do it minimally, but without the strict confines of a budget. our line items would vary so much as to make a line-by-line budget useless anyway — some months we’d spend more on travel, some months on a nice meal, some months on stocking up on groceries when there’s a good sale or when we’re doing a lot of canning, and some months on home maintenance projects or car care. but, somehow, our total spending stays pretty consistent in spite of not budgeting and not sticking to line items. of course, we still do spending projections for our retirement based on our current and expected spending, and we might occasionally set limits for things like home improvement projects or vacations. but budgeting just ain’t our thing. and we’re huge believers that you have to find what works for you, not for everyone else.
what works for you? do you follow a strict budget? a loose budget? just practice conscious spending? or none of the above? please share!