Tired of wasting time on complicated budgeting solutions that don’t work? Try this on for size.

T or F: the first step in getting your financial house in order is to make a budget?

If you’re like us, you’ve probably tried this approach more than once with little result.

Worse, you may find yourself frustrated and off track. What if we told you that there’s an easier way?  Keep reading.


When you are just starting out creating a budget framework is a good idea to set some boundaries around your spending.

We as financial advisors help our clients do this all the time. But, there’s a big difference between directing your money towards specific priorities and making a promise each month of exactly how much you’ll need to spend.

The problem with a budget is that it’s very difficult to stick to because it’s just a guess.

Life is full of things that pop up and it seems like all of them cost money.  We often think of potential budget disruptions as negatives like losing a job or having an accident, but they can be positives as well.

You win an award at work and go out with your coworkers to celebrate.  Your significant other has a milestone birthday and you throw them a fabulous party.  Your cousin announces she’s getting married and asks you to be her maid of honor.

You get the idea.


The point here is that budgets by nature restrictive and rigid. They can make money feel tight and lead to feelings of anxiety around spending.

This can often create an unhealthy atmosphere, especially in couples, and can contribute to arguments with your partner. You may even forego important life experiences simply because it’s not in the budget.

Even if the money was available elsewhere.

But, isn’t that what our money is for, after all?

It’s not to say you should engage in activities you can’t afford.  But, giving each dollar you earn a purpose is a key step to curing those budget blues and to getting on track for good.


How to manage your cash flow without making a budget

Introducing some flexibility into your handling of money by following some simple rules can give you a feeling of freedom and the confidence.

You know that you’re on track without ever having to go through the unpleasant task of sticking to a monthly budget.

Start by figuring out how much income you bring in each month by doing a simple assessment. Look at your pay-stubs or other income statements you may receive.

This includes income from employment, hobbies, side hustles, etc. and is all you need to determine the amount of net, after-tax money coming into your household monthly, including a spouse or partner, if applicable.

Here are the five steps to take next:


Protect yourself 

Maintaining a protection plan will help make sure that when you need it, you can continue to fund your financial goals without a major lifestyle disruption. This can include everything from proper estate planning, maintaining a life event fund, and carrying the right insurance coverage. 


Pay yourself 

Set aside what’s needed to fund the goals in your plan before spending on lifestyle. This is the part most of us don’t do. We spend on lifestyle expenses first and only fund our priorities with what’s left over. It’s time to flip the script and make yourself your biggest monthly creditor. These dollars can go towards funding any of your short or long-term financial goals.

This can include an emergency fund, travel, or making extra principal payments on loans or credit cards. You’re probably not going to be able to do everything all at once, and that’s okay.  Pick a few top priorities and start there.


Fixed costs

From what’s left over after you’ve covered your protection costs and savings goals, pay fixed costs. This includes expenses like mortgage/rent, minimum loan payments, or any other fixed expenses that you incur monthly.


Variable costs 

Then set aside enough to cover your monthly variable expenses. This could include things like utilities, entertainment, food, etc. If you’re prone to overspending, making a loose budget to set some guidelines around spending in each category can be helpful. But, you don’t need to be super rigid about it.

Just make sure you don’t go over the amount you set aside.



Be sure to leave yourself some amount of buffer above what you think you’ll need each month. This is just cover those unexpected pop-up expenses.  Anything left over can be spent however you wish or added to your other priorities.


Staying on Track

Track your expenses – Going forward, you will want to review your spending each month to see how it lines up.

By paying yourself first you’ll be funding the things you said were most important to you and that progress will feel good and motivate you to keep going.

You may find that you over or underestimated certain expenses and need to readjust what you’ve committed.  Doing this for several months will help identify patterns and may highlight some areas that you can trim to redirect funds towards your priorities in steps 2 or 3.


You will want to revisit this process any time something in your life changes to see how it might impact the other areas. This is also one of the advantages of working with a Financial Advisor.

We can help you think through the situation and how a change may impact other parts of your plan as well as help you prioritize goals like paying off debt, or building savings, in a way that leads to financial balance.

At the end of the day you only have 100% of your money. Regardless of whether you earn $20,000 or $200,000 per year, how much of it stays on your balance sheet is the direct result of intentional planning.


So, put away the budgeting spreadsheet and follow these steps.

You can let go of the anxiety around sticking to a rigid budget that doesn’t reflect your goals. Instead, relax knowing that you’re taking the necessary steps towards financial independence one at a time.



Material discussed is for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual solutions can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. This material contains  the current opinions of the author but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.