How To Save Money Without a Budget

I am not very good at keeping a budget. I can’t keep track of how much we spend on each category and ensure we don’t go over the allocated amount on a monthly basis. It’s too many things to track individually. It’s also time consuming. Instead, I devised a different strategy for our family.

If you have been following my post, you will notice a common theme. I am always trying to figure out ways to automate our finances. It’s a byproduct of my profession. My day job is all about creating standards and automating processes to improve efficiences in the business chain.

For our family, this is what we do:

1. My husband and I contribute a percentage of our income automatically into our 401k.

2. I have my paycheck deposited into two different bank accounts. One is a savings account at a local credit union. I have X amount of money electronically transferred there for each paycheck (Note: If you have recently paid off a debt you were paying monthly, this is a good strategy to stock away amount that you were used to paying to someone else). The remaining balance on my paycheck goes to our regular checking account.

3. From our checking account, X amount of money is automatically transferred to my ROTH account around the same time the paychecks are deposited. I am currently maxing out my ROTH contributions. My husband does not have a regular contribution set up for his ROTH account since he also has a Roth401k at his company.

4. Another X amount is automatically transferred to my son’s 529 college fund.

These covers our emergency fund, retirement and our son’s college fund. These are our priority savings and investments. The mortgage and other monthly bills are mostly predictable save the spike in electricity bill in the summer and the gas bill in the winter months.

With all the basics covered, the remaining money in our checking account is fair game. All we have to focus on is that we don’t spend more than what we have in the checking account. On occasions where we spend extravagantly, we don’t feel guilty because we know that we have already covered our savings and we are paying for it in full. We charge everything to a credit card and pay it in full monthly. With this strategy, we only have to keep tab of how much we have charged in the credit card so far compared to what we have left in the checking account. Since we mostly underspend, I do not even have to monitor this regularly. We always come ahead each month so the extra money accumulates to cover spikes in some months.

Do you know a better strategy? Please leave some feedback in the comment section. Thanks!

Women's Money Week 2012 Participant This post is part part of Women’s Money Week 2012. For more ideas on how to budget, check out other tips at Budgeting Roundup at WomensMoneyWeek.



8 thoughts on “How To Save Money Without a Budget

  1. I’m good at keeping a budget, but horrible at tracking spending. I don’t make sure everything is in each separate section each month.

    Posted by Michelle | March 9, 2012, 2:49 pm
  2. Couldn’t agree more, I think the key to it all, even with a budget is automating the process

    Posted by InsuranceDoesMatter | March 9, 2012, 11:17 am
  3. Good system! If you make your finances too complicated, then they become difficult to manage in the long term.

    Posted by Jon Rhodes | March 9, 2012, 8:45 am
  4. I like the idea of automatic deposit to your ROTH account, but I find it hard to charge all my expenses to my credit card, although I could see it easier just to pay one credit card a month and be able to track all your expenses once the bill arives.

    Posted by Tina | March 9, 2012, 5:30 am
    • Using just one card is actually easier than managing multiple cards. Evaluate which card has the best reward program and use that card only. Your cash back or mileage points will accumulate faster under one account. Thus, your ability to cash those in is better.

      Posted by Parenting and Money | March 9, 2012, 6:42 am

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