There are hundreds of articles out there on how to put together a budget, and there are a multitude of apps you can get to help you track them. So many people have weighed in on that subject I don’t feel like I really have anything further to add to that conversation. But have you heard of an anti-budget? And where do coupon codes fit into that?
What is an Anti-Budget?
Well, it’s not blowing all your money frivolously with no thought to debt or saving for retirement. It’s still a financial literacy tool that will help you keep your spending under control and yourself out of debt. Why do most people fail at a traditional budget? A traditional budget tells you to track every single dollar that you spend, and where you spend it. Fancy programs and apps have been created that tap into your bank account to help you do it, but it can be pretty overwhelming to look at all of those transactions.
So what is an anti-budget? You will still need to do a little up-front work, but it will be one hour of tracking expenses and income instead of every day for the rest of your life. In the anti-budget you’ll first figure out what your monthly expenses are. Add up rent or mortgage payments, utilities, all those subscriptions your have (and perhaps consider cutting some you don’t use), and other regular expenses including debt repayments.
For variable expenses such as groceries take an average of the last 12 months. For big expenses that only come up once or twice a year such as car maintenance or going to the dentist add up how much you spend on it last year and then divide that by 12. Once you have all those numbers you can add them up for your total monthly expenses.
Next you should also decide how much you are going to put away for retirement every month, contributions to an emergency fund if you don’t have one already, and also any additional money you’d like to put towards debt you may have. Add these numbers to your total monthly expenses as well.
Now, subtract the total monthly expenses + contributions from your monthly income. If you have variable income or extended periods of time off (ie. teachers) add up your total from the last year and then divide that by 12 to get your approximate monthly income. If it ends up that your expenses are higher than your income then you have a problem, you will need to reduce expenses. Otherwise the number that is left over is your anti-budget number. You know that each month you can spend up to that amount guilt-free because you’ve already accounted for the money you need for your day to day life. The best part is you only need to do it once. If your expenses or income change it’s quick and easy to recalculate.
Where do coupon codes come in?
Okay so you have your anti-budget number now. Maybe it’s not as high as you would like it to be, or worse it’s a negative number as your expenses are too high. Even if it’s a decent number, wouldn’t it be nice to have a little extra to spend on coffee or other small treats? Enter coupons. You can use coupons on anything you purchase online, yes even Amazon has coupons. Make sure to always try a few of them, some will get you a better deal than others.
And voila, just like that you could find yourself with possibly hundreds of extra dollars in your anti-budget that you are free to spend as you like!
What about credit cards?
Some budget programs and especially those aimed at debt reduction will tell you to get rid of your credit card entirely and only use cash to make purchases. While I agree that for extreme cases of credit card debt this may be necessary, it does have it’s drawbacks as well. However if you are the type of person to look at a credit card with a $4000 limit and think “That means I have $4000 to spend!” then no, you should not be using credit cards.
For the average person credit cards are extremely convenient, and can be leveraged for rewards points that you can use to save money on all kinds of things. You do need to be very careful about the type of card that you select, make sure it doesn’t have a yearly fee or that the yearly fee isn’t higher than the amount it will save you. For example some travel cards have a fairly significant fee, but the perks included for free will save you more than the cards fee. Look up ‘credit card hacking’, there are a lot of good articles and groups out there on how to leverage credit cards to your advantage.
Spend smart, and spend without guilt
I think there are two main reasons why people don’t stick to a traditional budget. It’s too much work to track every little thing daily, and it makes you feel guilty for spending on anything fun. The anti-budget works much better because you only need to track your fun spending money, and you know that you can spend it without worry because you’ve already taken care of everything else.