{"id":3189,"date":"2021-06-02T00:43:27","date_gmt":"2021-06-02T07:43:27","guid":{"rendered":"https:\/\/www.simplifimoney.com\/blog\/?p=1480"},"modified":"2024-11-18T10:21:11","modified_gmt":"2024-11-18T18:21:11","slug":"spending-plan","status":"publish","type":"post","link":"https:\/\/www.quicken.com\/blog\/spending-plan\/","title":{"rendered":"How to Budget \u2014 Without a Budget!"},"content":{"rendered":"\n

If you have trouble sticking to a budget\u2014or if the very idea of budgeting<\/a> makes you cringe\u2014you\u2019re not alone.<\/p>\n\n\n\n

As reported in The Cut<\/em><\/a>, Brad Klontz is a psychologist who also happens to be a certified financial planner. It\u2019s a smart combination for someone who wants to help people find better ways to manage their money.<\/p>\n\n\n\n

\u201cI think the entire concept of budgeting is flawed,\u201d Klontz said. \u201cYour emotional brain responds to the word budget<\/em> the same way it responds to the word diet<\/em>. The connotation is deprivation, suffering, agony, depression.\u201d<\/p>\n\n\n\n

So, how can you stay on top of your money without triggering all that negativity? By taking a different approach. <\/p>\n\n\n\n

Instead of a budget, Klontz recommends putting together a spending plan<\/em><\/strong>: a financial plan designed to help you reach your goals<\/a>.<\/p>\n\n\n\n

Why a spending plan is easier to stick to than a budget<\/h2>\n\n\n\n

Here\u2019s the problem with old-school budgeting in a nutshell: it\u2019s not flexible enough<\/a> to survive the real world, especially not today. Traditional budgeting is based on strict categories: spend only this much on groceries, that much on child care, and so on.\u00a0<\/p>\n\n\n\n

The problem with that system is that it tries to pretend life is routine and predictable, when, in reality, it\u2019s anything but. Here are 4 specific, real-world situations that demonstrate why a spending plan beats a budget hands-down. <\/p>\n\n\n\n

1. A budget won\u2019t adjust automatically when your life changes<\/h3>\n\n\n\n

Let\u2019s say a pandemic hits the planet, and all your habits change overnight. There was a time that example would have seemed far-fetched. Today? Not so much. <\/p>\n\n\n\n

A traditional budget forces you to adjust every category to stay in control: car maintenance and gas, take-out food, travel, child care, subscription TV, and so much more. But a spending plan flexes with you<\/a>, keeping up with your bottom line without missing a beat.<\/p>\n\n\n\n

Even in normal life<\/a>, things change. You might have to move to a new job. You might decide to take up dance lessons. You might welcome a new addition to your family. Whatever life brings, your spending plan changes for you, automatically.<\/p>\n\n\n\n

2. Budgets make it too hard to include everything<\/h3>\n\n\n\n

Let\u2019s say your car gets caught in a hail storm. The damage is covered, but you have to pay your deductible. If you\u2019re using a traditional budget, that probably wasn\u2019t in there.<\/p>\n\n\n\n

With a spending plan, you just pay the deductible. Your plan keeps track of that expense and adjusts what you have left automatically.<\/p>\n\n\n\n

You can also build savings goals into your plan, including an emergency fund. So it\u2019s there when you need it, ready to cover life\u2019s surprises.<\/p>\n\n\n\n

3. Budgets make it hard to splurge, even when it\u2019s worth it<\/h3>\n\n\n\n

What if your friend invites you out of the blue to spend the weekend in a city you\u2019ve been dying to visit? That\u2019s probably not in your budget either.<\/p>\n\n\n\n

A spending plan gives you the flexibility to take advantage of life\u2019s opportunities. It doesn\u2019t judge you when you decide to spend on the things that matter. It just shows you the trade-offs so you can make your own choices.<\/p>\n\n\n\n

4. Budgets force you to do a lot of work<\/h3>\n\n\n\n

Finally, let\u2019s say that same friend only invited you out to brunch. In a traditional budget, you\u2019d have to check on your dining budget and see where you are for the month. You might even have to adjust that category up and find something else to adjust down. It\u2019s a huge hassle.<\/p>\n\n\n\n

With a spending plan, you\u2019ll know at a glance how much you have left to spend for the rest of the month. It doesn\u2019t matter what category that spending happens to fall under. <\/p>\n\n\n\n

That\u2019s why you need a spending plan\u2014NOT a budget<\/h2>\n\n\n\n

Spending plans break free of those old categories to meet the constantly changing nature of real life. They still track<\/em> your spending, so you can see where your money is going, but they don\u2019t restrict<\/em> that spending to specific categories. <\/p>\n\n\n\n

That\u2019s what makes spending plans so effective. They tap into real human behavior to help you track your finances and stay on top of your spending the easy way \u2014 by understanding the way you intuitively think about money.<\/p>\n\n\n\n

But the power of automation can take spending plans a step further. An app like Simplifi can generate your spending plan for you, connect to your accounts to keep that plan updated automatically, and even learn your preferences, getting better over time. <\/p>\n\n\n\n

In fact, that\u2019s why we created Simplifi<\/a>, to make spending plans even easier and add one more key factor \u2014 motivation<\/em> \u2014 to help you stick to your spending plan and reach your financial goals with confidence.<\/p>\n\n\n\n

Says Senior Director Kristen Dillard of the Simplifi project, \u201cWe\u2019ve watched people \u2018budget\u2019 for years. The reality is, very few people commit long term to traditional budgeting. It\u2019s restrictive, it\u2019s nearly impossible to set accurately, and it\u2019s time consuming. We truly believe everyone is better off with a plan, but that plan has to fit real life. And real behavior. That\u2019s what Simplifi is all about.\u201d<\/p>\n\n\n\n

1. A spending plan replaces judgment with positive reinforcement<\/h3>\n\n\n\n

Instead of making you feel bad when you miss a goal, Simplifi focuses on helping you celebrate each small win, so you\u2019ll actually look forward to checking in with your money.<\/p>\n\n\n\n

Did you spend less this month than you did last month? That\u2019s a win! Did you make a contribution toward one of your savings goals? That\u2019s a win too! <\/p>\n\n\n\n

Simplifi never judges you or your financial situation. It\u2019s designed to help<\/em> you by providing the information you need to make smart decisions about your finances.<\/p>\n\n\n\n

2. A spending plan lets you spend your money however you need to<\/h3>\n\n\n\n

Let\u2019s say you need new tires this month, so you decide to cut back on your take-out and eat in more often. That\u2019s a great decision!<\/p>\n\n\n\n

Instead of forcing you to recalculate your budget categories as they change from month to month, Simplifi focuses on helping you keep your overall spending in line with your income<\/a>.<\/p>\n\n\n\n

When you cut back in one place to account for something else, Simplifi recognizes that and celebrates it with you in your monthly spending report.<\/p>\n\n\n\n

3. A spending plan helps you balance today and tomorrow<\/h3>\n\n\n\n

The basic idea behind traditional budgeting is to control ALL your spending all the time, saving as much as you possibly can for the future. But that just makes you feel guilty about every dime you spend\u2014as if you should turn down all life\u2019s opportunities along the way.<\/p>\n\n\n\n

That\u2019s no way to live \u2014 which is one of the main reasons people hate budgeting!<\/p>\n\n\n\n

By letting you include as many savings goals as you want and showing you what you can still spend today, Simplifi gives you the best of both worlds. You can enjoy life right now, knowing that your future is still on track.<\/p>\n\n\n\n

4. A spending plan doesn\u2019t overwhelm you with information you don\u2019t need<\/h3>\n\n\n\n

When you\u2019re ready to manage your finances, you need a system that isn\u2019t going to swamp you with details and huge tables of data you don\u2019t care about.<\/p>\n\n\n\n

A spending plan shows you what you need to know at a glance: how much you can spend, where you are in your spending plan today, how close you are to your savings goals.<\/p>\n\n\n\n

Everything you need is right there at your fingertips, whenever you want to see it, without any clutter to get in your way.<\/p>\n\n\n\n

And, with a modern personal finance app like Simplifi, alerts make your spending plan even easier to follow. <\/p>\n\n\n\n

Set up your alerts however you want them, and the app will help you stay on top of your money the way you want to\u2014without spending hours poring over your finances.<\/p>\n\n\n\n

Final thoughts<\/h2>\n\n\n\n

Do you think you might want to watch a specific spending category more closely? Simplifi still lets you do that. Set up a watchlist<\/a> to follow any category, payee, or tag you want to.<\/p>\n\n\n\n

But with Simplifi, you never have<\/em> to do that. The app is designed to be flexible to meet your needs, whatever those needs might be, and even if those needs suddenly change.<\/p>\n\n\n\n

So if you want to be successful at staying on top of your money, you don’t need a budget. You need a spending plan. <\/p>\n\n\n\n

Simplifi\u2019s spending plan focuses on the things you care about, organizes your finances the same way you think about them, and sets you up to reach your financial goals with confidence. <\/p>\n","protected":false},"excerpt":{"rendered":"

What\u2019s better than a budget? A spending plan. It\u2019s the flexible, motivational way to stay on top of your finances and reach your goals with confidence.<\/p>\n","protected":false},"author":59,"featured_media":3118,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"none","_seopress_titles_title":"How to Budget \u2014 Without a Budget! | Simplifi by Quicken","_seopress_titles_desc":"What\u2019s better than a budget? A spending plan. It\u2019s the flexible, motivational way to stay on top of your finances and reach your goals with confidence.","_seopress_robots_index":"","inline_featured_image":false,"footnotes":""},"categories":[108,69],"tags":[],"class_list":["post-3189","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budgeting-savings","category-personal-finance"],"acf":[],"jetpack_featured_media_url":"https:\/\/www.quicken.com\/blog\/wp-content\/uploads\/2021\/05\/friends-out-to-lunch.jpg","_links":{"self":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/3189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/comments?post=3189"}],"version-history":[{"count":3,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/3189\/revisions"}],"predecessor-version":[{"id":3823,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/3189\/revisions\/3823"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media\/3118"}],"wp:attachment":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media?parent=3189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/categories?post=3189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/tags?post=3189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}