The anti-budget.

How does change happen?

Let’s recap how it DOESN’T happen. It doesn’t happen by trying the same highly acclaimed but unsuccessful systems over and over and over again.

Every time I have remained mired in the mud of my bad habits, it looked like this:

I sit around with a friend and write out all sorts of goals. I make plans and lists and charts and secretly consider buying myself little star stickers to stay motivated. I buy a cart-full of vegetables, some of which I don’t even care for, and do a full days worth of food prep. I write out a budget based on what I hope I might be able to save if I work really, really hard.

My efforts led to fridge-fulls of wasted produce, unused budget spreadsheets and empty bank accounts.

I’m not knocking forethought and planning. It’s just that when I stuck to what I saw other people doing, it didn’t work. Not the first time, or the second, or the third… I know budgets work for some people, but it turns out I’m not one of them. At best I forget about them, and more often I buck against that sort of rigidity. Turns out, that was just one way to effect change.

Then there’s my way.

What I finally figured out was this: change happens when you figure out what motivates you. Once you find out what drives you, you can put the stepping-stones in place to get to where you actually want to be.

What worked for me? My method so far has included challenge, immediate implementation, and reflection. I add in a dose of flexibility as well.

Challenge. Alright. If budgets don’t motivate me, what makes me get up and go?

I respond beautifully to challenges.

Want me to spend less money eating out? Dare me to. Make me want to prove I can.

I dared myself to bring my lunch to work every day. I dared myself to slash my restaurant budget. I dared myself to actually use all of the soaps, shampoos, essential oils and lotions in my house prior to buying any new ones. I wanted to know if I was even capable of these things.

I know there isn’t a great deal of difference in the actual practice here, but that’s not the point. By framing it differently in my mind, I respond differently. I choose to work with my personality and not against it. This has become a bit of a theme for me.

What does this look like?

I usually challenge myself in one of two ways, habits or lump sums. My abrupt transformation into a bringer-of-lunch at work was an example of a challenge of habit.

Lump sum challenges are exactly what they sound like. With a goal and a time frame that works for my personality, I set a goal for how much I can save. “With my first paycheck in May I want to put $250 into my savings account.”

I have slowly fine tuned lump sum challenges so the goals are both challenging and sustainable. I come up with these numbers in the most mundane way possible. I literally sit with paper, pen and calculator and write out something like this:

Paycheck – bills – events – grocery/gas = free money

As an example:

Pay – rent/electric  – wedding gift – groceries/gas = free money

From there I challenge myself on how much of that particular paycheck’s worth of “free money” I think I can save. Maybe pretty much all of it, or maybe I know by July I’ll need a new pair of sneakers. Whatever’s left is my discretionary spending (eating out, entertainment, unplanned purchases.)

Sometimes I sit and predict this out for a month or so. Other times I will literally sit and project these numbers out over most of a year. Certainly not necessary, but it helps me set realistic goals and stay excited.

Immediate Implementation.I know a lot of people who have all their bills on auto-pay and seem to love it. Right now, that’s not for me. When I have money, I spend money. My workaround for my lack of self-control is that I pretty much immediately implement any plan I’ve made.

On the mornings I get paid I check the amount in my account, calculate out my known expenses and set my goal. I immediately pay all my bills for the next two weeks. Then I move the allotted goal money into the savings account that’s attached to my checking account.

This means that after a day or two my checking account is down to the dregs, but that’s fine. That’s how I want it. That account now holds my discretionary spending for the next two weeks. I stay tuned in with Mint so as not to accidentally overdraw.

Suddenly there’s a huge barrier to spending more than I should because I know I’ll need to actively move money out of my savings account and away from my goal if I do. It’s steered me away from many an afternoon coffee or not-so-necessary new trinket.

Reflection. Once I had attempted some new habits and challenges I needed to step back and assess. Had I actually changed? Had I made any progress? Was my spending any different than it used to be?

I do this on a day-to-day basis with Mint.com.

I check the mobile app multiple times throughout the week to monitor my accounts, make sure I haven’t spent more than I planned, and categorize my purchases. Then every few months I login on my laptop to take advantage of Mint’s “trends” function. I can see whether or not I have, in fact, spent less as planned. Maybe I’ve made amazing progress!

Of course, maybe I find that I’m doing terribly. At that point, I’ll eventually make a list of all the purchases I feel lay outside of my original plan. I separate that list into the “unavoidable” and the “avoidable,” and then set about avoiding.

Challenge, immediate implementation and reflection have absolutely been the bread and butter of my massive shift in cash flow. I know there are more graceful or obvious ways of managing money. This system is based on my personality. But I have to guess I’m not the only one with an anti-budget gene. If you’re anything like me (ie uncomfortable with rules and authority, find numbers to be meaningless, impulsive and embedded in the moment…) there’s hope. You don’t need to fight with yourself to be in a good place financially. Working with yourself is far more satisfying.

On that note, here’s two more little thoughts that have become important over time.

Flexibility. I have this way of setting a goal, working part way, then changing my mind. This has happened a lot more since I finished saving my safety-net fund. In my mind the credit card debt and the safety-net fund were obvious, emergent priorities. There was no other rational use for my money in that moment. Unfortunately my current path forward lacks the same clarity.

Consider this series of thoughts.

I paid of my credit card debt! I saved up a $5,000 emergency fund! Alright, let’s continue my snowball and go after that low-hanging student loan.

Shoot, my car just broke down again. It’s fixed, but that noise it’s making is a little odd… and my clutch is long past due… I’ll get a new (used) car! Alright, let’s knock off the rest of that auto loan I wish I hadn’t had to take out.

Ooo! Look at that home, it’s the perfect size, price, and location! And my rent is likely to go up soon. It’s already sold? Man I wish I’d had the cash to jump on that faster… Alright, just a little bigger cash fund so I can make a move if the opportunity arises!

I might rearrange again at some point. I know this isn’t the most FI-approved list of priorities. It fits my needs right now though, and I keep making little steps forward. Forward keeps changing, but forward nonetheless.

It lacks the satisfaction of tackling one goal full force to completion, but I had to prioritize my peace of mind. My desire for some freedom of choice in the short-term is trumping other goals. For that, I need to have some grace and flexibility with myself.

After all, that’s the point right? I glean everything I can from outside resources, both conventional wisdom and the incredible financial independence community. But at the end of the day I need to find what works for me.

If something here clicks with you, with how you work, give it a try!

Whether you’re trying break the paycheck-to-paycheck cycle, pay down your debt, or become financially independent… the end goal is definitely worth it.

And please, if one of these ideas works for you, let me know!

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