The No-Budget Budget

As a personal finance writer, I’m conflicted. I really believe in the power of budgeting — especially a zero-based budget. It can do amazing things for you. In fact it’s awesome, especially if you’re in debt or working toward some other financial goal.

But I know that many people hate budgeting. Sadly, extolling the virtues of one isn’t going to change their mind. Heck, even I don’t use a budget anymore (although I found zero-based budgeting massively helpful for many years, and still highly recommend it.)

So if you don’t want to give budgeting a solid try (meaning for at least 6 months), or if you find yourself with extra money available every single month, consider using the no-budget budget.

Why use the no-budget budget?

Not budgeting at all is easy, but it’s also often disastrous. Bills come in, and you freak out because you don’t know how you’re going to pay them. Or you really want to do something, but don’t have the money. So you do it anyway and put it on a credit card. Or you miss out on something you could have easily afforded if only you hadn’t spent all your money on something else.

Sure, you don’t have to “constrain” yourself by following a budget, but you have to deal with all of those consequences. They are not fun. Using the no-budget budget can help you avoid those.

How it works

The no-budget budget works like this. You’ve only got to know two things: how much money you bring home in your paycheck, and what you must pay each month.

Check your latest pay stub to figure out how much you bring home monthly, and look at your latest bank statement (or check online if you toss those) to see what you’ve paid in the last month. That’ll be stuff like your house payment, electricity, water, and whatever else you’ve committed to pay. Don’t forget about things like car and homeowner’s insurance, if you don’t pay those monthly.

Now add what you make and your bills up. If what you make in a month is plenty more than what your regular expenses are, you’re a good candidate for a no-budget budget. If you’re in the hole, you’ll have to either make some cuts first or start bringing in more money.

Setting it up

Once you’ve determined that a no-budget budget will work for you, set it up by:

  1. Arranging to have at least 10% of your take-home pay automatically sent to a separate savings account each payday.
  2. Arranging to have all of your fixed expenses paid automatically every month. Your fixed expenses should include funding retirement, unless you’re setting aside money for that pre-tax.

Whatever’s left each month after that is yours to spend or save as you please. And when it’s gone, it’s gone. That’s it.

Tip: If you have a hard time remembering what will be coming out of your account, you can have your paycheck direct deposited into two accounts: one that all of your bills are automatically paid from, and one that you use for everything else.


  • Though I have seen a lot of people live like this I am not for this type of budget at all. You end up just getting paid and spending everything almost every month. If you are telling me that they have a 401k set up to be automatically deducted as well as another sort of savings then well MAYBE. Setting up savings as a bill as well could certainly help someone living this way. But a no budget budget is simply just not a budget. Don’t really think you will get really far living like this.

    Like your last post – what happens when the unexpected comes up? Well this budget allow for the $500 issues?

  • This specifically says you are finding retirement AND at least 10% to savings each month, so yes, living like this you would be setting aside money for retirement and savings. It’s really only going to benefit people who don’t have a budget at all right now and refuse to even try, or people who have plenty of extra money each month that they’re just blowing without funding retirement and savings.

  • I believe this type of budget would be better for a seasoned person rather than an individual who needs assistance getting out of debt. I do like setting up your bills automatically and saving 10% a month.

    • I agree (and feel a zero-based budget would be a WHOLE lot better for someone who needs help getting out of debt) but any budget is better than no budget. And maybe getting a little taste of success will encourage more focused budgeting.

  • Blasphemy! J/k :)

    I know what you’re getting at here, but I find that money slips through my fingers and is used to buy things I don’t really care about, essentially wasting money that could have been better used elsewhere. Also, I believe in naming my savings, not just dumping it into a generic savings account, because what are you savings for? Who knows, unless you give that money some purpose.

    Budgets ARE awesome and useful for EVERYONE :)

    My $.02

    • What’s kind of funny about this is it IS a budget — it’s just not a very detailed one. It’s basically: 10% long term savings, 15% retirement, 75% everything else (bills, random spending, and allocated savings).

  • Jackie I love this. It gives a name to what I have been doing for years. As a finance person, I can extol the virtues of a budget – of course everyone should use one. But as a human being, I don’t always do what I know is best for me. This seems like a viable plan if you set up with some forethought. The automation piece is what really helped me. I agree with Jacob@iheartbudgets about directing money to named savings accounts and I have that process automated as well.