Drop the Budget

Let's be honest, getting giddy about budgeting is like getting excited about a root canal.

Most of us, myself included, resist the word itself, and all the actions that go with it.

It appears the common belief is that budgeting is a simple task responsible adults do.?And because I don’t, every time the word arises, I feel a little twinge of shame.

Here’s the truth about budgets, you don’t need one to be wealthy.?

Let me say that again – YOU DON’T NEED A BUDGET TO BE WEALTHY.

In fact, the wealthiest people I know are the worst at understanding their personal expenses.

Budgets emphasize expenses and, in most cases, you can’t expense cut your way to wealth.

Wealthy people emphasize and optimize INCOME and INVESTMENTS.?

So, if you’ve been avoiding your finances because you think you must budget, drop it like a bad habit.

Instead, start by focusing on one number- your investment rate.?

This is the % of your annual income that you are investing for your future self.?

For a “normal” retirement age, somewhere around age 65, most people should be targeting a 20% investment rate.?In other words, if you are contributing 10% of your income to a 401k, increase it to 20% or contribute another 10% of your income to a different investment account (this may be necessary if you make more than $220,000 annually because 10% contribution maxes the IRS limits of the 401k).

Whatever your current number is 0 – 19% is perfect, just start with knowing it and checking in to see if it needs to increase.?If yes, move it up 1% at a time until you get to 20%.

Putting your emphasis here will take less effort and give you more bang for your buck in results.?

Lastly, I’ll leave you with my favorite hack to make this as easy as possible.?Have all of your income deposited into a savings account instead of a checking account.?Then automate a monthly transfer of a set amount, less than your total paycheck, to move from savings to checking (or bi-weekly, however often you are paid).?

For example, if you are paid $5,000 bi-weekly, have the $5,000 deposit to savings and set up a transfer of $4950 (start small) to checking the day after each pay-period.?

My favorite part about this hack is that when you get raises, your default is set to save your salary increase instead of spending it.?You can always adjust but you’re changed the default setting.

Hack or not, hope you enjoy a life free of budgeting!

If you'd like my help optimizing income and investing, WITHOUT someone jumping your?sh*t about about a budget, ping me at [email protected] or schedule a call using my?online calendar.

I’m not in the finance business. I’m in the life business.

If you’re inspired, let’s talk. No sales pitches. Like, ever.