I Hate Tracking My Spending. Here’s What I Do Instead

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Tracking your spending isn’t the only way to stay on top of your finances. Learn what one writer does instead to save time. 

Most of us have heard about the importance of making a budget and tracking our spending. It’s financial advice that gets repeated ad nauseam, to the point where it seems like something you have to do.

But it’s not. Here’s my dirty little secret as a personal finance writer — I don’t have a budget, and I don’t track my spending. It’s boring, it’s time consuming, and I’d be miserable relying on a budget to see what I can afford.

Despite all that, my finances are in pretty good shape. I have an emergency fund and a retirement fund, and I don’t stress about money. Since tracking my spending definitely doesn’t work for me, I found another method that did.

How I manage money without a budget

My method for managing money is simple. I set monthly savings and investing targets for myself. I make sure that I reach those targets, and that I can pay all my monthly bills from my income, without dipping into my savings account. As long as I can do that, I don’t worry about my spending, because I know I’m on track with my financial goals.

If you’re interested in trying this, there are two ways you can set savings and investing goals:

Use dollar amounts. For example, you could decide to save $400 per month and invest $600. This works well if you have stable income.Use percentages of your income. For example, you could save 5% of your income and invest 10%. This works well if you have income that fluctuates each month.

Let’s say you take home $6,000 per month. You decide you want to save 10% of your income and invest another 10% ($600 each and $1,200 total). You’d be left with $4,800 to use as you please for your bills and other expenses.

Here’s the key to making this work: Leave yourself some wiggle room. Continuing the example above, let’s say that you usually spend about $4,000 on your monthly expenses (with a take-home pay of $6,000). I wouldn’t recommend setting savings and investing targets of $1,000 each. If you have a month where you spend more than usual, you’re not going to be able to hit your goals.

Some people like the “give every dollar a job” approach, where you plan where all your money will go. I prefer simplicity and not having to micromanage my money. My monthly expenses normally aren’t more than 50% of my income, and my savings/investing target is 30% of my income. Normally, I end up investing what’s left over. But if I want to spend more, I do, without feeling guilty about it. If I’m saving as much as I want, investing as much as I want, and paying off my credit cards every month, then I’m happy.

Find a method that works for you

Tracking spending and following a budget works for those who like to stay on top of everything financially. If it works for you, great! But if it doesn’t, that’s alright, too.

Even though there’s a ton of advice that recommends budgeting, there are plenty of people who just don’t like to do it. In fact, according to a 2013 Gallup survey, only 32% of households said they prepared a detailed budget every month.

You don’t need to track where every dollar goes. There are really only a few things that are important when managing money:

Earning more money than you spendHaving money to save and invest every month (20% total, divided how you like between savings and investments, is a good number to aim for)Staying out of high-interest debt, such as credit card debt

Would I have more money saved if I was stricter about my spending and kept a budget? Probably. But I wouldn’t have as much free time, and my lifestyle could suffer. However you choose to manage your money, it’s important to have a balance between financial security and quality of life.

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