Why I DON’T Budget (and what I do instead)

hi everyone welcome back to my channel in today's video we're going to talk about saving versus budgeting and why I do encourage one but not the other so if you've watched my videos in my money and mindfulness series then you'll know that I am a big proponent of financial literacy Financial Empowerment I'm also big on saving and investing but I don't really talk about budgeting in fact in one of my previous videos I explicitly said that I don't budget and I'm not a fan of budgeting and in fact for most of us I wouldn't encourage budgeting as the approach to reaching your financial goals now one of you actually reached out to me and asked for a dedicated video for me to elaborate on this so I'm happy to do that so for starters I think of budgeting just the way I think of dieting yes so budgeting and dieting are both deprivation tools aren't they there are constantly ways of telling us no no you can't have that piece of cake no you can't go on that vacation no you can't have dessert no you can't afford to buy that new thing it's a lot of restrictions and limitations and frankly I think that you fall risk of winding up having a quite unhealthy and negative relationship both with food and with money and I don't know about you guys but I love to eat I am not a picky eater so I will eat anything and everything I'll try anything once I also am fortunate that I don't have any food allergies so I can literally eat to my heart's content but will I gorge on so much food that it will make me unhealthy and sick no same thing with money I like to be able to earn money so that I can have a comfortable and secure life will I chase it till no end will I let it consume me so that I become some kind of Miser some kind of Scrooge no because then I will also feel unhealthy and sick so it's all about balance and discipline but I believe that you can be disciplined about your money without having a budget so I'm going to explain step by step what I do but before I get into that I just want to caveat this video and say that if you are in a very difficult financial situation at the moment you are either unemployed living paycheck to paycheck you have no buffer to save any money you're barely making ends meet perhaps you have quite a bit of debt or you're supporting many family members if that is your situation I think that this video today may not resonate with you as much but once you come out of that financial situation and you are feeling more comfortable and more secure I do hope that my words today will ring true for you because a lot of this is mindset it's not necessarily about the money it's mindset and the relationship we have with money and what it does for us so let's get started so when it comes to food I eat proteins and fruits and vegetables and drink a lot of water and I exercise and I try to stay active and do all the things that my body really needs so that I can stay healthy for the long run as long as possible right we're trying to take care of ourselves same thing with money we're trying to take care of ourselves now and our future selves so that we won't have to worry and be stressed out and anxious about money there are no guarantees in life whether it be with our health or with our financial situation but if we lay down the bricks to take care of ourselves we can try to mitigate some of the common risks okay so with food I don't really tell myself no I eat all the good stuff I exercise I try to take care of myself and then there's a little bit of space in my stomach for desserts salty snacks cookies literally this week I've been eating chocolate babka from Trader Joe's and pumpkin Blondie brownies delicious so I'm doing that but am I eating the desserts first no just like with money I'm not spending my money first I'm saving it first so let me explain all right so this is exactly what I do I'm going to go through step by step in detail if you want to copy this plan or system so I get my earnings my income my paycheck whatever you want to call it and I take a specific percentage of that and I have it automatically go out into a savings account every month on a specific date automatically it's like Auto transfer I don't have to think about it I don't see it I'm not tempted to use it it goes out it's on autopilot so it's just like a no-brainer no stress no thinking okay and it's a specific percentage I try to make it a realistic percentage meaning I know my expenses so I I know roughly how much I can save okay and but it's challenging so it's like I'm gonna push myself a little bit so see if I can save a little bit more than I think I can because I think when we squeeze and push ourselves usually more comes out right so I do that and I say it's very important that it's a set percentage it's not a dollar amount because if you make this much and you set a percentage which is what I do and which is what I'm suggesting as your income grows hopefully it does over time then proportionately that percentage of savings will also grow because it's just mathematical it's a a percentage it's going to be following along it's going to stay on Pace is what my point is income grows savings grow however if you have this much income and you set a dollar amount let's say you say I'm Gonna Save thousand dollars a month and then your income keeps going up and you're still just saving a thousand dollars a month well then the spread gets really wide wider than you probably need it to and what happens then is then as human beings in this consumeristic Society I would imagine almost all of us will be tempted to use that buffer money it's it's a lot of money sitting there oh let me buy another car let me redo my house let me go on 10 more vacations whatever the case might be and I'm not saying don't enjoy this is all about balance you want to enjoy and be disciplined together because if you enjoy too much you'll feel like you're over indulgent feels sick just like when you overeat but if you're too disciplined and only disciplined and strict with yourself there'll be no fun just like if you eat only foods that have no you know no sweet ingredients or no salty ingredients right you can't just eat plants all day so it's a balance but that buffer doesn't want to be too big you don't want it to be too big because then what happens is lifestyle creep lifestyle inflation I'm sure you've all heard these terms where you know those people who say hmm it's so interesting I make 10 times more than I ever did before but I still don't feel wealthy I still don't feel secure I still don't feel that comfortable why well because probably they set their savings down here and their income kept growing and they spent most of that buffer so you want your savings to keep Pace I don't want to harp on this too much I just think it's really important so I wanted to drill that in okay so it's a set percentage then you know what your necessary expenses and bills are every month you know utilities food like everything you have to pay for on a recurring basis to live to survive so you've got that that chunk of money gets spent and then whatever is left over you really want to sit down and kind of put this on paper okay if I say this much I have this much to spend on my recurring expenses and then I have this much left over that's too much oh no that's too little and you just kind of readjust play with the numbers play with the percentages that's what I did to get to my number and it will fluctuate our numbers changed when we had kids and then it changed again and again and again up and down up and down as our financial situation got either more healthy or more difficult okay so that's what you do then the leftover money after savings first by the way if you're like oh my gosh I have to put my money into savings first I don't know why that would feel icky you're literally paying yourself first you're paying you first of all you have to pay taxes first so it goes to the government so you're paying yourself second technically right why is that an icky thing you're thinking of yourself your future I mean so that's how I see it I'm paying myself first before it goes to all these companies and bills then I pay my bills and then whatever's left over that's the space that you have for dessert you see instead of saying no I can't have that cake no I can't buy that thing it's buffer money oh look at that I have this much left over it's an abundance mindset I've got extra now if you wanted to buy a pretty expensive item for yourself perhaps it's a treat and you have enough in that buffer money to go out and indulge and splurge and enjoy so be it I I think that's a great place to be however if you have this much buffer money and you go hmm I don't have enough for that big ticket item that I wanted to purchase then you wait that's where the discipline comes in you say to yourself it will take me how many months to get to that total amount all right so seven months it is seven months of buffer money that I'm going to just keep accumulating to get to that big ticket item that I have my eye on now this is where the discipline of how motivated are you that question comes in how motivated are you to keep your eye on the big prize otherwise what might happen is you'll just spend that buffer money on Rinky Dink silly things that you didn't even really want but you just wanted to buy something to get it out of your system that's a waste right um or you might be tempted to go into your savings and pull out the money that you literally just saved and lump it in with your buffer money and say okay now I'm gonna go buy that big thing well that's kind of silly because you went backwards why'd you save in the first place then right so I do think that it's absolutely possible to manage your money without a budget while still being disciplined you don't have to be so limiting so prescriptive this gives you more freedom hey I've got buffer money what am I going to do with it that's that's freedom of choice right there am I gonna leave it am I going to save it am I going to accumulate it for something big am I actually going to just put it into savings as extra right so I love this idea of abundance because it really leads to a more positive and healthy mindset and relationship with money and we all know that everyone including myself we have baggage when we think about money we have emotional psychological baggage and issues with money whether it be because of what we experienced ourselves or because of what we saw our parents go through whatever the case might be we all have some baggage and in order to have a healthy relationship with money I feel like it's got to feel good for the most part okay it's got to feel like exciting and motivating and inspiring and easy too it has to be easy that's why I put my savings on autopilot because it's easy that way this savings is separate from retirement so if you have the opportunity to participate in a 401k from your employer take advantage of the tax savings take advantage of any contributing matching dollars that's free money right there or if you have IRAs take advantage of tax savings right max out on your IRAs if you can this is this savings is after all of that okay or separate from that I should say not after but separate from that does that make sense I've heard some of you say oh I save and then I use that money to go shopping I don't love the idea of saving and pulling out saving and pulling out saving and pulling out short term but if that works for you then more power to you we all have to find our own personal system that makes us feel good and works for us but for me I love to see my savings accumulate that's where the feeling of abundance comes in where I go in at the end of the year and I go all right that's a healthy sum of money that's a nest egg for whatever something pretty major or for future or emergency that's what it is emergency too so anyway that is my system it's not going to work for everyone but I was asked to elaborate on why I don't budget uh and there it is that's why I don't budget just like I don't diet so I really believe in a healthy balance between enjoying enjoying all of the gifts and deliciousness of Life while also being thankful and disciplined and conscious and mindful so you see they go hand in hand I hope you enjoyed this video if you did please give it a thumbs up and I will see you all next time bye

Channel: hello catwalk city

Views: 9,786

Keywords: hello catwalk city, why i don't budget, saving, saving and investing, saving and budgeting, money tips, how to budget and save money, how to budget, how to save money, money mindset, shea whitney, jerusha couture, amber ashleigh, lvlovercc, isabelle's style, colourful noir, minks4all, financial literacy, caitlin pawlowski, cassie thorpe, je suis lou, emma hill, chase amie, sophie shohet, how to make saving money fun, how to make saving money easier, how to save money fast

Id: G9M5Pamu8Uk

Length: 12min 11sec (731 seconds)

Published: Mon Nov 07 2022