How to Manage Your Money — No Budgeting Required


The basics of creating and maintaining a budget are deceptively simple: Determine how much of your money comes and goes each month. Easy peasy, right?

Wrong. If you don't have the time, inclination, or skills necessary to keep careful track of your finances, the "simple" tasks that make up budgeting are anything but easy.

But money management is a necessary part of financial health, whether or not you commit to creating and following a traditional budget. Thankfully, there are several options available to the budget-averse who need to get a handle on their finances. Here are three ways to manage your money — no budgeting required.

1. Have Your Paycheck Deposited Into Savings, Not Checking

Instead of having your entire paycheck deposited into your checking account, have it sent to savings. Once a month, transfer the amount you need for expenses and bills into your checking account. You'll automatically spend less than you earn and save money every month without having to draft up an actual budget.

If you correctly calculated your monthly expenses, the money should last until the next transfer. If you are running short before the end of the month, you can decide to move more money from your savings account, or go on a financial fast (that is, make no purchases until the next month begins). If you find that you're constantly adding a second transfer near the end of the month to make ends meet, it's time to evaluate your expenses. Find the sweet spot that allows you to cover your expenses without dipping multiple times into your savings.

2. Follow the 50/20/30 Rule

Senator Elizabeth Warren, along with her daughter Amelia Warren-Tyagi, introduced the 50/20/30 budgeting rule in their book All Your Worth. This proportional budget recommends that you divide your income into three buckets:

  • 50% should go toward essential expenditures like rent or mortgage, groceries, utilities, child care, and the like.
  • 20% of your income should go toward savings and/or financial goals, such as retirement savings, a down payment for a house, or your child's 529 college account.
  • 30% of your income should go toward your "lifestyle" expenses — i.e., the unnecessary purchases you make because you want them. These expenses include things like travel, entertainment, dining out, luxury items, etc.

You can easily follow the 50/20/30 rule without having to specifically follow a budget. Create targeted accounts for each of your spending categories. When you receive your paycheck, have 20% of your income automatically transferred into a savings account or investment account, and have another 30% automatically transferred into a separate checking account. When you make a nonessential purchase, use the debit card associated with your 30% checking account, so that you can never be in the position where you've accidentally spent your rent money on a weekend to Vegas.

Finally, the 50% that remains in your primary checking account should cover your essential spending — although it's always a good idea to maintain an emergency fund just in case. (The 20% transfer into a savings account can help you create an emergency fund in the first few months of adopting this system.)

3. Let an App Do the Work for You

If you know that thinking about money will always be the last item on your to-do list, then you are a good candidate for an automatic savings or budgeting app. These three apps allow you to productively ignore your money.

  • Digit is a free program that syncs with your accounts in order to analyze your cash flow. About twice a week, the program will determine an amount of money (between $5 and $50) that is safe to transfer out of your checking account and into an FDIC-insured Digit deposit account. This is a safe way to save money without ever having to think about it.
  • Level Money syncs with your bank account, calculating how much money will be available in your account after accounting for upcoming bills, recent purchases, and the savings goals you have created in the app. With those calculations, Level then gives you an estimated amount that is safe for you to spend that day, that week, and that month. Like Digit, Level Money is free.
  • Pennies is an iPhone app that requires a little more hands-on approach. If you don't mind some more direct involvement in your budgeting, this one is worth a try. Pennies asks you to set a budget amount for various types of spending, such as monthly fun money, weekly food spending, monthly transportation costs, etc. You will enter in the start date, the length of the budget term, and the amount available to spend, and you will need to enter each purchase you make into the app. Pennies then shows you how much money and time is left in each budget. Pennies costs $2.99 in the App Store, and has no other fees.

Money Management Doesn't Have to Hurt

Just because you've never held onto receipts or willingly opened an Excel spreadsheet does not mean you can't have a good handle on your money. Consistency is the key to good money management, so finding a system that works for you is the most important part of keeping track of your finances.

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Guest's picture
Emily White

How to manage your money no budgeting required. This sounds new to me. Because budgeting has it's own big part in our finances. But, looking at the 50/20/30 rule makes me think that there is always another way around. Having 20% that goes on savings is quite big enough savings in the future. Say like could be more helpful on after retirement savings, and also I like the 30% for lifestyle. You'll still get the lifestyle that you want. But got 20% savings. What a great rule! This should be helping everyone who gets to read this blog. Keep this up! :) -xoxo