Home' Trinidad and Tobago Guardian : May 3rd 2015 Contents SBG10 PERSONAL FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt MAY 3 • 2015
Are you the type of per-
son who diligently
tracks every expense
and knows exactly
where all your dollars
go? If so, congratula-
tions! You re a rare
If you re a regular, everyday person, on the
other hand, line-itemizing your budget just
isn t realistic. Sure, it s possible to keep a
detailed budget, but doing so will consume a
massive amount of your time, energy and
effort. The entire process will feel like a tough
uphill battle, and you hold a high likelihood
of giving up.
Just as most people abandon their diets,
most people also abandon their budgets. So
let s get rid of the budgeting notion altogether.
To give yourself the best chance of financial
success, work with your personal nature, rather
than against it.
If you aren t likely to stick with a detailed
budget, then try this alternative: the anti-
The premise of the anti-budget is simple:
Pull your savings off the top first, then go wild
with the rest. When I say "go wild," I mean
you can spend this money freely, without
needing to track where it s going. It doesn t
matter whether your groceries come to $173.58
or $192.49. You no longer need such detailed
As long as you re pulling your savings off
the top first, you can spend the remainder
guilt-free. You won t need to doubt yourself
or question every purchase you make.
The anti-budget is pragmatic and goal-ori-
ented. The purpose of a budget is to make
sure we re adequately saving. You want to
make sure you re setting aside enough money
to pay off debt or save for the important things
in life. Pulling your savings from the top first
allows you to make this a reality.
To be clear, a detailed budget is helpful for
those that can stick with it. But if that level
of scrutiny isn t your cup of tea, you can
achieve the same result by pulling your savings
off the top first.
To get started, split your savings into three
buckets: retirement, debt payoff and cash sav-
Retirement: Set up automatic payroll con-
tributions to your retirement accounts, so the
money never even reaches your paycheck.
Debt: Establish additional debt payment
(above-and-beyond the minimum due) to
automatically draft from your checking account
every payday. These include credit cards, car
loans and even excess mortgage payments.
Savings: Open a savings account at a dif-
ferent bank, so you don t see your savings
balance when you log into your primary
accounts. Establish an automatic transfer from
your checking to your savings account every
Congratulations, you ve just pulled your
savings from the top. The rest of your money
is yours to spend. Now, allocate the money
that s left over towards fixed and essential
bills, such as rent or mortgage, utilities, phone,
insurance premiums, gas and groceries.
Pay these bills first. Once you re done, any-
thing that s left over is yours to spend without
concern. You don t need to worry about
whether you spent US$92.87 or US$114.02 on
restaurant dining this month. You don t need
to concern yourself with the fact that those
spur-of-the-moment concert tickets or that
impulse pair of shoes weren t included in your
You can simply spend anything that s left
over, because you know your savings has been
In my household, we use the anti-budget
to make sure we re saving at least 50 per cent
of our income (after taxes).
Our approach is simple. We save 100 per
cent of the income that s generated by
whichever partner is the higher earner.
Since "who makes more" has changed a
few times in the last couple of years (depending
on promotions and self-employment growths
and slowdowns), we respond by adjusting our
strategy monthly: We save the income brought
in by whomever earned more in the past
This approach guarantees we ll be saving
more than 50 per cent of our income. It also
puts us in the mindset of being a single-income
couple, which means that if we decide to actu-
ally become a one-income couple in the future,
the transition won t be such a shock. We
already make most of our buying decisions---
including choices about big-ticket items like
mortgages and cars---from the budget and per-
spective of a single-income couple.
You don t need to leap to 50 per cent right
away; that s admittedly a large goal.
Start by setting aside just one additional
per cent more than you currently save. If you
normally save five per cent of your income,
start the anti-budget by putting aside six per
cent. If you usually save 20 per cent of your
income, save 21 per cent.
Each month, adjust the anti-budget so that
you re saving one extra per cent, as compared
to the prior month. You ll be able to save an
additional 12 per cent over the span of a year
by making these incremental moves.
The anti-budget is a simple way to make
sure you re saving as much as you want to
every month. If tracking your expenses is get-
ting you down, give this a shot.
How to use an anti-budget
Each month, adjust the
anti-budget so that
you're saving one extra
per cent, as compared to
the prior month. You'll
be able to save an
additional 12 per cent
over the span of a year
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