The concept of the “anti-budget” has been around for many years now, in different (precise) forms and fashions. The bottom line is that the anti-budget is supposed to be a kinder, gentler version of budgeting that sees you accomplishing the same goals of a more traditional approach, but without all the same, hyper-linear “stuff” that goes along with setting up and maintaining a traditional budget.
It sounds like a great idea, at first blush, but can anything like that truly work? Is there really a way to make effective budgeting…the operative word here being effective…less stressful? Or is this like a lot of clever workout regimens, the purpose of which are to help you realize the same results by way of lower amounts of vigorous activity and less restrictive dieting, but which, in the end, are simply not as beneficial?
For starters, let’s clarify the ultimate goal of a budget. It is not simply a mechanism that enables you to successfully live within your means, although that is certainly a part of it. The overriding purpose of a budget is to go a step further, to leave you with a meaningful enough amount of disposable income at the end of each month such that you can put some away in a retirement plan, pay down existing debts, and build up readily-accessible savings. With the anti-budget, you’re actually pulling off the top your sums to be set aside, and leaving yourself with the rest to manage your obligations and living expenses. For example, an anti-budgeter making $5,000 per month might set aside $1,000 off the top…which could mean taking it all at the beginning of the month, but, based on the way many folks are paid, might peel $500 out of each biweekly check as soon as it’s received…and deposit the rest into his regular “operating” checking account used to meet regular monthly expenses. The anti-budget, then, is really just a new name to describe the old strategy of “paying yourself first;” you take out your investing and savings monies before you pay any of your monthly bills, and then figure out how to meet those obligations with what’s left.
So much of the success of any personal improvement strategy revolves around the particular psychological makeup of the person applying it. Some people do exceptionally well with traditional budgets, and wouldn’t use anything else, while others find success with the anti-budget approach; still others have no use for anything quite so formal, and manage to find success absent any mechanism at all. Of course, the rest simply fail to meet their budget goals altogether, finding that there is no way to escape their own self-destructive behaviors when it comes to managing money.
In other words, what works is what works for you. I could not be an anti-budgeter, personally, because my psychological makeup simply would not permit me to direct money into savings first, without being assured that I could meet my obligations. In my case, I do sort of split the difference between the two strategies – I automatically have a set minimum dollar amount withdrawn each month from bank account and moved directly into a retirement plan. However, I also wait to see how much I have left over at the end of the month before I decide how much I might put into additional savings.
The problem with going directly to an anti-budget approach, if you know yourself to have issues meeting obligations, is that you might well be putting the cart before the horse. Until you are certain that you have enough money coming in to meet your regular monthly obligations, it’s tough to see how you would know how much you could pull off the top as discretionary money. Someone who likes the anti-budget approach, but who is new to budgeting, may benefit from using a traditional budget approach long enough to ensure that he has his basic financial house in order, and, once satisfied to that end, then transitions to the less-rigorous, anti-budget mechanism.
Again, it is about what works. The anti-budget may work very well for some, but it’s going to be important to first establish that you’re able to meet your monthly obligations with a more traditional budget approach before taking your discretionary monies right off the top as soon as you’re paid.
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