I’m a huge fan of using a budget to keep up with your money and to be more intentional with the way you spend and save. Specifically, I’m a huge believer in YNAB as the best tool of choice to budget. Ever since I stumbled on it in 2012, I’ve never found a tool that I like quite as much.

But just because I think that you need a budget, does that mean that it’s the only way?  

Is it possible to be successful with your money if you don’t keep a budget?

When Katie and I had just gotten married and we were just starting out, I was doing a lot of new reading on personal finance. That’s when I came across Ramit Sethi and his book I Will Teach You To Be Rich. Ramit never pulls any punches and his humor isn’t for everyone, but I think he’s hilarious. 

In typical Ramit fashion:

“‘Create a budget!’ is the sort of worthless advice that personal finance pundits feel good prescribing, yet when real people read about making a budget, their eyes glaze over. Who wants to track their spending? The few people who actually try it find that their budgets completely fail after two days because tracking every  penny is overwhelming.”

Instead, Ramit developed his Conscious Spending Plan, where you should take a look at all of your household expenses and keep them to 50-60% of your pay. Then you’ve got 10% to save for retirement, 5-10% to save for things like vacations and a new house, and 20-35% to spend guild free for the month.

The idea goes that once you have your systems in place, you shouldn’t really have to budget. 

I eventually settled into a more Dave Ramsey approach, who teaches that you do need to create a unique budget each month that prioritizes being intentional with every single dollar that comes in.

But what about those people who still find success with their finances but don’t keep an actual written budget each month?

Is it possible to run your finances like that?

What would a No-Budget financial plan require?

In what instances could you get away with not having a budget and still be financially successful?

What about this-Do you feel like compared with the salary that you have today, you naturally spend less than you bring in each month?

If the habits and values you have keep you spending less than you make when matched with the salary you have, you could be very successful without ever budgeting. 

In Thomas Stanley’s books, The Millionaire Next Door and Stop Acting Rich, Stanley outlined how the habits of everyday people made them millionaires over the course of their career. 

These people kept frugal habits, spent within their means, and always made saving a priority. 

In many instances, the way they simply viewed money and the way they spent it was fertile soil for creating a millionaire.

So if you simply match the right income with a frugal enough lifestyle and are a natural saver, you’re likely to become a millionaire without much fuss. 

But what about the rest of us? 

What about those of us who may not naturally be as frugal or wish we had a higher income to match a lifestyle we’d prefer, what would we have to do to also become millionaires?

The answer is simple, but not easy.

We would have to set our most important goals first and make saving and meeting those goals our biggest financial priority.

In other words, we would look at how much we wanted to save each month to reach our retirement goals. Then prioritize saving that amount of money over all other spending.

We would also be great about saving for mid term goals first before spending. If we have a dream trip coming up, we’d save for that first.

Lastly, with the money we have left, we’d have to be careful that we spent within our means and didn’t overspend what we had left.

The No-Budget Budget Solution

The problem is that most people will have at least one category that they like to seriously overspend on. 

And if you’re married, you double your chances of having more than one hole in the boat.

I can say no to making a purchase all day long, but don’t seem to have the same frugal mindset when it comes to eating out. Katie has the direct opposite problem. 

I was reading back through the new updated copy of I Will Teach You To Be Rich and was pleased to see some changes that Ramit has made to his book in the updated edition. 

After building your conscious spending plan, Ramit actually recommends using a program like YNAB(You Need A Budget) or cash envelopes to track your most pesky categories. And he has a point when he says that there’s really only a few categories in your budget that you have to watch each month anyway. 

This is true. The vast majority of your budget will be static from month to month or only really move by a little. Sure, you’ll have to wait to see how much the electricity bill is each month, but it’s going to at least be around the same amount. 

It’s the dining out, the personal spending, and grocery shopping that are the categories you’ll need to watch most. 

So Ramit’s advice in his book is to focus on tracking those categories to keep yourself on track. 

It’s the No-Budget budget solution. 

I get that keeping a full budget can be daunting and seem hard to keep up with. I get behind all the time. But I don’t think that you should throw out budgeting because of it.

But the spirit of Ramit’s advice I actually really agree with.

Keep your budget simple. 

Keep it as simple as possible and focus only on building categories that you need to track. Even if you want to lump that 60% that’s monthly obligations into one category, while keeping certain categories like spending and food separate, do it. 

It’s still a budget. 

A budget doesn’t have to be complicated to work. You only need categories for things you need to track. 

Keeping track is still worth it, so that even if you don’t have an income that easily supports the lifestyle you dream of, you can make wise choices that get you to millionaire status anyway.