[USER]

Curious to see if anyone else approaches things the way I do… Budgets have never worked for me, whether monthly or yearly.

It’s never been a sustainable practice because I don’t like analysis, and the obligation to plug in numbers regularly couldn’t be less appealing to me.

However, I’ve been pretty good at setting up systems that save & invest for me, then I am also pretty consistent about living within my means after savings have been pulled out.

I’m still on a FIRE journey, but mine might look a little different than others, and I wanted to see what the community thinks of what I’ve got set up:

– I am 34, husband is 36
– Married, no kids
– Rent, $1500 per month
– Saving $2000 per month
– My salary, $75k; Husband, $54k
– 401k balance: $54k
– Brokerage: $31k
– Roth IRA (inherited): $56k

– Have a rental property, $155k equity, brings in net of $375/ month after mortgage paid

– No credit card debt or car payments. Only debt is the rental house mortgage.

I am hoping we can ramp our savings up to $3k/ month within the year.

Aiming to be work-optional between 45-50 and we plan to continue living our current lifestyle of $55-60k expenses per year, adjusted for inflation.

Anyone else take a sort of “educated guess” or “trust your gut” approach to FI?

[Trevis]

I wasn’t (still not) particularly good with budgets. What worked better for me was artificial scarcity. Max out everything and live on what’s left.

FI March 1 2024, RE May 1, 2025.

[Thomas]

Chatted with a friend yesterday. He and his wife are around age 60 with $3 million not including their home.

They’ve never budgeted, just consistently lived below their means.

[Erica]

Our budget is too tight for this strategy, but I’ve seen it work well for others. The point of a budget is to tell your money where to go (as opposed to always being broke and having no idea what you’re spending on various things).

If this savings rate gets you where you want to be and you’re happy with your current lifestyle, then I’d say this is working for you.

If you ever find yourself wishing you had the funds for, then maybe writing a rough budget would show you where you could shift to make room.

[Sunny]

I have never had a budget. I just know what I can spend or not.
It’s like watching my weight. I’m in my 50s. I’m the same weight-ish since high school.. about 120 lbs.

I don’t closely watch my calories (budget). But I know if I eat an extra slice of cake or have too much fast food or junk food, I just back off the next few days from eating like that.

To me, it’s just being mindful. Not to spend or eat in excess.
I haven’t worked in over 1.5 years now. And the last 12 months I’ve been internationally traveling with great abandon.

I had no budget for any of my trips. 11 countries in 12 months. And some trips around the US as well. A friend asked me what I spent. I could only say “a lot!” lol Still not in debt.

I’d quit my job due to mental burn out. Not intentional retiring. Not sure when/what I’ll do for next job move.

I was working 4 hours a week at Joann Fabrics before they closed down

[Wong]

What about an emergency fund? Didn’t see that listed. I had a crazy week this week of spending $700 on electrical repairs, $215 on car maintenance, and $1500 after insurance on getting wisdom teeth removed.

[Ernest]

there’s one critical strategy—whether or not you budget: pay yourself first and live off the rest. Set a savings target, automate it, and treat it like a non-negotiable bill.

That way, you never even see the money and won’t be tempted to spend it.

If you want to increase your savings rate from where you are now, it can be helpful to review a few months of expenses to identify areas to cut.

But if that feels like too much, you could also ease into it by gradually increasing your savings each month until you reach your goal.

[Michelle]

Everyone has something that works for them. I am not in a place where I need a tight budget.

I take care of what I need to take care of (bills and investments) and the rest I can spend on what I like.

It’s a form of the zero based budget.

[Adam]

You seem to be describing “reverse budgeting” where you pay yourself first by saving a set amount every month whether that’s payroll deductions into retirement or something similar.

Then you spend whatever is left. That’s perfectly fine as long as you don’t actually spend more than you have available and assumes you are saving enough to meet your long term goals.

If those goals aren’t being met then you need to go deeper and consider a traditional budget to find where the overspending is happening

[Ellen]

I didn’t use a formal budget until I was in my mid/late-50s. While I had/have no desire to retire early, I am obsessed with being financially secure.

As a natural saver, it didn’t seem necessary to budget, I wasn’t taking on consumer debt and found budgeting to be really tedious & annoying.

I felt like I was doing fine. And my finances are secure, I’ll retire when I feel like it, so I guess it mostly worked.

But my saving habit was really more money “hoarding” than anything else. I always felt bad spending on anything joyful but unnecessary.

After I started using a real budget (YNAB), I increased my savings and investments AND increased my joy.

The budget helped me be intentional and eliminate spending that didn’t align with my values and goals.

Now, not only am I surpassing my investment goals I am also increasing my spending on joy (like skiing, gifts, etc.).

Budgeting has allowed me to get a handle on the true cost to be me, which gives me a much better understanding of how much my expenses will be in retirement.

I’ve included expenses like home repairs, vehicle replacement, taxes, insurance, medical care, personal care needs (hiring out things I do for myself now, like bathing, cooking, cleaning, yardwork, transportation, etc.) in my planning.

Of course everyone is different, but if I’d started budgeting 30 years ago, my financial situation would be wildly better and I would have had more joy along the way.

[Bill]

The problem with this is you need to know how much you spend. You say $55k? Well, you make $130k and save $24k. So $100k is going somewhere.

You don’t have to track every penny and categorize every dollar, but you can’t be off $45k in your estimate.

[Hoch]

FI doesn’t have to be a sprint. In fact, for most its a marathon. Setting and meeting your savings goals, then living within your means keeps you on the course.

I never used a budget until I retired, but saved enough to RE.

You need to find your balance of living for today, and saving for tomorrow.

Everyone’s journey and goals to meet this are different.

[Jody]

Rather than tracking and budgeting what we spend, we always have savings/investing as our “budget” – a pay yourself first philosophy.

Figure out that piece and stick to it then it doesn’t matter where the remaining amount goes as long as you have met your mandatory monthly/annual savings and investing priorities.

Obviously to make this work you need to know how much you are spending and where you can cut!

[Jay]

You are doing the important stuff first which is what matters. Your strategy will be fine.

Plug in numbers to some investment calculators and see if it predicts you to hit your goals.

Good luck!

[Michael]

I think budgets are useful to a point. Useful in that it lets you ramp up your savings rate and informs you what your lifestyle actually costs. I could never make the dozens of categories work for us.

Once I clocked a 20% savings rate, I just stopped decomposing it below the top line number.

For example, if I saved $2k in a month and spent $8k, the utility of breaking that $8k down just didn’t pan out.

Tracking the $8k top line spend over a period of years informs me that is what my life actually costs for planning.

[Teresa]

I pretty much did this until I wanted to focus hard on very specific goals (pay off acreage, help son with college, set myself up to retire with full benefits at 46 if I got the chance, build a house, etc) while taking a series of hits to my income (pay cut due to job change, filing status, etc).

10 years later, I’ve done all but get the new house built (not for lack of trying, there have been a lot of obstacles).

I did pay off the mortgage on the current house though, so that should help build the new one.

I was looking forward to no more budget and just “wing it after the savings comes off the top”, but I got that opportunity to retire with full benefits at 46. So, I took that instead.

If you are flexible with when you want to retire, what you want your life to look like in retirement, etc, you can be more flexible with how you approach savings/spending.

If you have very specific goals and/or timelines, you might want to get more intentional.

It’s not a right/wrong answer, but one that fits with your own style and what you are looking to achieve.

[Author]

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