What Is The Anti-Budget, Exactly? Does It Work?
The idea of the “anti-budget” has existed for a long time, taking on various (detailed) forms and trends. The anti-budget, in short, is meant to be a kinder, gentler version of budgeting that enables you to achieve the same objectives as a more conventional approach without requiring you to do any of the same, hyper-linear “stuff” that comes with creating and maintaining a traditional budget.
On the surface, it seems like a really good idea, but is it really possible? Really, is there a way to create an efficient budget… the operative word here being effective… less stressful? Or is this just another one of those clever workout plans that promise to help you achieve the same results with less strenuous exercise and less stringent dieting, but which are ultimately not as effective?
Let’s start by outlining what a budget’s main purpose is. Although that is undoubtedly a component of it, living within your means successfully is more than just a mechanism. The overriding purpose of a budget is to go a step further, to leave you with a meaningful enough amount ofdisposable income at the end of each month such that you can put some away in a retirement plan, pay down existing debts, and build up readily-accessible savings. With the anti-budget, you’re actually pulling off the top your sums to be set aside, and leaving yourself with the rest to manage your obligations and living expenses. For instance, a budget-buster who earns $5,000 per month might set aside $1,000 extra… which could mean taking it all at the beginning of the month, but, based on the way many folks are paid, might peel $500 out of each biweekly check as soon as it’s received… and deposit the rest into his regular “operating” checking account used to meet regular monthly expenses. The anti-budget, then, is really just a new term for the age-old practice of “paying yourself first”; you take out money for investing and savings before you pay any of your monthly bills, and then you figure out how to fulfill those obligations with the remainder.
Any personal improvement strategy’s effectiveness depends largely on the individual’s psychological makeup. Some people succeed with anti-budget strategies, while others do exceptionally well with traditional budgets and wouldn’t use anything else. Still other people have no need for anything quite so formal and are able to succeed without using any system at all. Of course, the rest simply don’t stick to their budget plans because they realize they are powerless to change their destructive financial habits.
In other words, what works is what works for you. Being personally opposed to budgeting would be impossible because I simply could not put money toward savings without first being certain that I could meet my obligations. In my situation, I sort of combine the advantages of both strategies by setting up an automatic monthly withdrawal from my checking account of a minimum dollar amount that goes straight into a retirement plan. However, I also wait to see how much I have left over at the end of the month before I decide how much I might put intoadditional savings.
If you are aware that you have trouble keeping up with your obligations, there is a risk that you will put the cart before the horse if you immediately adopt an anti-budget stance. It’s difficult to imagine how you would know how much you could pull off the top as discretionary money until you are confident that you have enough money coming in to meet your regular monthly obligations. When starting out with budgeting, someone who prefers the anti-budget method might find it helpful to first follow a traditional budget plan until he is confident that his finances are in order, and then switch to the less-strict anti-budget method once he is satisfied.
It all comes down to what works, once more. The anti-budget may be very effective for some people, but it’s crucial to first prove that you can meet your monthly obligations using a more conventional budgeting strategy before taking your discretionary funds straight off the top as soon as you get paid.
