Wanderlust Wendy

Why I Don’t Budget

Budgeting, does this word make you cringe when you hear it? I definitely cringe. I get an image of envelopes labelled “grocery”, “gas”, “fun fund”, etc., and comes with them a sleuth of restrictions. I hate budgeting. I’ve told myself I should budget so I know how much money I spend on coffee every month. That has yet to happen, and it probably never will. 

Expense Tracking

Surely, there has to be some secret sauce to turning a negative $120k of net worth positive, no? Yes, that secret is expense tracking and mindful spending. When I first moved to Shanghai with a mountain of debt, I didn’t know where to begin. I wasn’t familiar with how much life cost in this new city, and the idea of budgeting money I didn’t even have felt too daunting. So instead, I began tracking expenses. 

I opened up an Excel spreadsheet, and started tracking every dollar that goes out of my checking account. I manually logged each credit card swipe, but I don’t categorize. Why? Well, if I charged a group dinner on my credit card to get points, and people paid me cash, I don’t want the task of remembering my portion, and then put it into the “food” category. That’s way too complicated. Instead, I track only money leaving my bank account, which is easy to do from bank & credit card statements online. I needed a habit that is simple enough to stick to, and simply tracking was better than nothing. 

Financial Meditation

This manual practice became a sort of financial meditation for me. Instead of relying on softwares like Mint or Personal Capital, I practiced this meditation once a week. As I logged each transaction, I reflected on the expense, its purpose, and its value. I looked at the weekly sum and made a mental note on whether I should adjust spending in the coming week. As long as the overall monthly expense was within a reasonable range, I didn’t bother to dissect the data further. 

I hustled hard and made sure I made enough money to cover expenses and debt repayment. It’s a balancing act between income and expenses. I much preferred spending energy to figure out how to make more money, rather than bucketing money I don’t yet have. During the debt repayment years. I sat with my spreadsheet often, and it was a sort of refuge to know I am in control.

Mindful Spending

Over time, I cultivated mindful spending. With each purchase, I learned to ensure the value I get is worthwhile. Even for expenses that I don’t “need”, as long as it adds value, then I go for it and don’t look back. Within the first few months of tracking, I noticed my monthly expenses were similar. Those were my poorest days, and the numbers from that time became a baseline. Even as my income rose, I stayed within a similar range. I may splurge on a trip this month, but I will cut back on other areas next to ensure my average monthly spend don’t skyrocket. The numbers ebb and flow, and the process is fluid.

In order to ensure I stay on track, I tricked myself into feeling some constraint. I paid myself first, and diverted all cash 50/50 into debt repayment and investments, leaving only an amount that would cover monthly expenses. This way, I couldn’t be tempted to get too lavish with my lifestyle. 

Continuous Improvement

Relying on intuition to spend money is an on-going process. Every now and again, I ask myself if I should give budgeting another go, and perhaps there are areas I could identify to spend less. As we pivoted our lives toward long-term travel, I use WanderWallet to track our expenses on the go. It gives me a better sense of how much each trip costs us on a daily basis. The exercise is an extension to the spreadsheet logging, which is now a bi-weekly or monthly practice. 

I had lofty ideas to use this app to help me “budget”, but I’ve never once gone back to categorize our expenses. Needless to say, budgeting in the traditional sense never happened. Yet, following the mindful spending principle, we’ve managed to spend 50% less on the road than living in Shanghai. I still enjoy sitting with my spreadsheet, and fine-tuning my intuition on how to spend money better. 

Your Money, Your Way

This is not a post about how budgeting sucks. It’s simply not the way that works for me. I don’t like being told what to do, and when I’m confined to a budget, I feel like it’s telling me how to spend. On a related conversation on Twitter, Sarah said it best by drawing comparison to dieting. Budgeting feels like a diet – you have to go without; whereas with healthy eating, you are mindful with food intake – the same principle as mindful spending.

If you can’t seem to stick to a budget, I hope this post speaks to you and offers an alternative solution. Whatever the method, I believe a shift in mindset about money will alleviate some stress. And if budgeting works for you, then keep up the great work, and I bow down to your budgeting prowess!

Helpful Resources

8 thoughts on “Why I Don’t Budget”

  1. I’ve been seeing a lot of articles about not budgeting lately, and yours sums it up in a personalized honest way I can really appreciate! I have been slinking around in the personal finance world for a while now and never really confessed how I don’t actively budget either. We take the idea of paying ourselves first into savings/investing and then spending whatever is leftover in a variety of different ways each month.

    Some months it’s more on food, some months we spend more on gas to go someplace, etc. It’s all over the place, but as long as we have an idea of our annual expenses, I’m done with spreadsheets about boring stuff. It’s BORING and doesn’t change me because I don’t like being told what to do either (especially from myself – I just disobey and rebel on a month to month basis). Like you, I think I’m mindful now in an overall way and I trust myself. Budgeting may have helped at first, but trusting myself and having a good relationship with money is the big game-changer.

  2. Great post in the crowded “why you need to budget” conversation!

    I really like how you talked about financial meditation. I go through a similar process every couple weeks on my payday. I like to think that I can handle budgeting all in my head…. but honestly my budgeting strategy is on pen and paper (no tech), haha.

    • Ha. Whatever method works for you! Like all things in life, there isn’t a one-size-fits-all solution. I share my story to show a different way to approach budgeting, and I’m glad it resonates!


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