How to use ‘anti-budgeting’ to automate money management and spend without worry
4 experts weigh in on their alternative methods to ditch your budget and use money with joy
There are a lot of ways into ditching your budget, divesting from budget culture and taking a less restrictive approach to money. In one of my favorite articles for Salon, I talked with other personal finance experts about the ways they help people think differently about money management. I also included my own methods, but I think it’s important to have options! Below, I share the full piece from Salon, including four money management methods that help you do away with the restriction and shame built into typical budgets.
A typical budget asks you to decide how you’re allowed to spend money in advance, then track every dollar you spend to make sure you follow the plan.
This tedium is less than ideal for most lifestyles, and it’s why study after study shows budgets to be unhelpful and unsustainable.
“Most people do not maintain a budget. Why would we?” financial educator and author of Money for Couples Ramit Sethi said in an email. “We have to assemble months of spending into a complicated spreadsheet in order to... what? Feel bad about our spending?”
Sethi and other financial experts have pushed back against this typical “give every dollar a job” approach to money management and offered new ways to stay on top of your money without the stress and accounting of a budget.
Here are four ways to ditch your budget and manage money without resorting to restriction or shame.
1. Set up an 80/20 plan (the original ‘anti-budget’)
Paula Pant, writer and founder of the financial media company Afford Anything, coined the term “anti-budget” in 2013 when she offered an 80/20 money management plan she called “the easiest budget ever.”
Pant’s anti-budget plan is meant to help you set aside money for saving, investing and dealing with debt, without worrying about the rest of your spending. It includes two simple steps:
Decide how much you want to save (she recommends at least 20% of your income but says you can start with as little as 1%).
Pull this amount off the top.
Once your savings is set aside from each paycheck, Pant writes, “Relax about the rest.”
Pant’s simple anti-budget stands in stark opposition to the impracticality of budgeting advice. She created the 80/20 plan for the majority of people who will never stick with restriction and spend-tracking but still want to make progress on financial goals.
Since 2013, however, the costs of living have risen sharply compared with stagnating wages. That makes it harder for folks to save 20% of their paychecks and even harder to “relax about the rest” without a solid plan to make sure the bills are paid.
Subsequent financial experts have built on Pant’s anti-budget stance to build money management plans that keep stress low while tackling the realities of paying for life in 2025.
2. Use values-based spending
Jen Smith and Jill Sirianni, authors of Buy What You Love Without Going Broke and hosts of the Frugal Friends Podcast, often quote Pant’s mantra, “You can afford anything, but not everything.”
Their book lays out the duo’s signature “values-based spending” approach, which eschews persnickety budgeting and helps you choose what to buy based on what you value most.
“This method doesn't start with the math but rather begins with the things that matter most to you with permission to spend!” Smith said in an email. “It's about saying better 'yes's' and easier 'no's' with our spending in a way that aligns with each person's needs.”
Smith and Sirianni compare traditional budgeting to yo-yo dieting: “full of restriction, deprivation, shame and messages about 'cutting', 'trimming', 'counting every tiny penny.'” Values-based spending, on the other hand, “emphasizes self understanding, individuality and flexibility.”
In their book, they note the first step to “buying what you love” is to know what you love. They created a framework they call the four F's to help you name your highest values. The four F's represent the categories of things they’ve identified as those people value most: family, friends, faith and fulfilling work.
Using this framework, you can look at your spending urges and habits and identify the deeper needs you’re trying to meet: for example, maintaining family ties, spending time with your children, connecting with friends, exploring spirituality or succeeding in a job you care about.
“We prefer to focus on values before numbers,” said Smith. “When we can start with the things that matter most, identify how we want to spend (or not spend) on them, then we can identify simple categories for where our money is going each month, with room to make adjustments as needed.”
Once you identify that deeper need, you can decide whether or not it’s necessary to spend money to meet it. You might be buying holiday gifts to connect with family or expensive lunches to spend time with friends, for example. Are those purchases necessary, or can you meet the needs without the spending?
Determining the values you’re trying to honor and where spending is or is not necessary, Smith said, can help you “experience greater confidence and less guilt about spending [and] more creativity in the ways [you] save.”
3. Follow a conscious spending plan
Sethi, founder of the financial education platform I Will Teach You to Be Rich, encourages his hundreds of thousands of followers to “live your rich life outside the spreadsheet.”
“Tracking every dollar is a good idea in the same way that ‘tracking every minute of your day to become more productive’ is: It's nice advice that virtually nobody follows,” said Sethi.
He encourages people to “Focus on the $30,000 questions, not the $3 questions, by automating your investments and focusing on three to five key areas of spending.”
To support that approach, he offers his Conscious Spending Plan, a method that guides saving and spending in four major categories:
Fixed costs (including bills, debt payments, groceries, clothes and other costs of living): 50% to 60% of take-home pay.
Investments, including retirement savings: 5% to 10% of take-home pay, “though more is better,” he added.
Savings for vacations, gifts, emergencies and more: 5% to 10% of take-home pay.
Guilt-free spending (untracked, on anything you want): 20% to 35%.
Similar to Pant’s approach, Sethi said, “You don't need to spend hours every month entering data into a spreadsheet. Just hit your four key numbers, and get on with your life.”
4. Create a money map
In my book, *You Don’t Need a Budget,* I recommend creating a money map to stay informed about your financial situation and spend without worry.
Similar to Sethi’s conscious-spending approach, a money map focuses on four pillars of your finances:
Resources: Money, assets, assistance and credit available to spend.
Commitments: Bills and expenses you’ve agreed to pay each month.
Goals: Savings and debt-payoff plans.
Spending: Amount available to spend on everything else.
A money map gives you visibility into your available resources (beyond just income) and the ways you want to use money. You can use this understanding to set up an automated anti-budgeting method to fund your commitments and goals, then spend freely from what’s left — which I call your “yes fund.”
Unlike Pant’s or Sethi’s plans, a money map doesn’t prioritize one way of using money over another or recommend any percentage of resources toward any category. Instead, it gives you visibility into how financial decisions impact your overall financial situation, so — similar to Smith and Sirianni’s values-based spending — you can use money in any way that works for you.
This article was was originally published by Salon.
This post contains affiliate links for Bookshop.org, so if you buy a book mentioned here, you support the author, local bookstores and Healthy Rich!
The underlying premise of these non-budget approaches seems to be that you actually have money after the fixed expenses are met.
Many people are in a lifeboat and not the fancy pontoon or yacht that a few others are sporting around the sea in.