Budgeting doesn’t have to be boring. Five ways to do it — without using a spreadsheet

You can be terrible with math and hate spreadsheets and still be successful with managing money. The trick is landing on a system that works for you, and then sticking with it.

I have students who “budget” using colourful drawings to prioritize their money. Some set daily voice reminders scheduled into their smartphones (one student also plays herself a money meditation), some play games against themselves like, “Can I spend only $23 today, tops?” or “What’s my cost-per-use?” to determine if it’s worth spending on. Others prefer pencil-to-paper notes to themselves about their cash ins and outs, then stick it to the fridge with a magnet.

All of these are real examples of money systems that are working; meaning these people spend within their means, and the majority are saving for their future, too.

As a financial educator and coach with 18 years of experience, I can confidently say that what will not work is having no money management systems at all. The “it will all work out” or “I’ll deal with it later” approaches are costly, almost always lead to debt and amplify anxiety, not the other way around. 

If you’re allergic to spreadsheets, here are a few alternative budgeting systems that might work better for you.

Make a drawing of your money

The goal is to make this look like a pinwheel. Each segment is a certain category and colour. The essential categories you’ll need on your pinwheel are housing, food and dining, kids and pets, transportation, saving, investing, subscriptions and memberships, health and wellness, debt repayment and fun.

Then, label them with the amounts that go into each part of the pinwheel. If you’re using a pie chart in a tool like Canva, the pins will adjust so that you can see proportional amounts. As an example, your housing costs will probably take up at least 40 per cent of the pinwheel.

What I like about this is it helps you see the categories where you have some flexibility, or might want to make changes to. For example, if your food and dining is taking up too much of the pinwheel, and there’s not much happening in the investing category, you can shift from one category to the other.

The students I have who use this approach look at their pinwheel every few days to make sure that how they are actually spending aligns nicely with their pinwheel plans.

Automate everything

Setting up complete automation of all your financial obligations (such as bills, memberships, insurance premiums and TFSA contributions) means you don’t have to do anything except for check that your system worked, every month — and that’ll take 20 minutes tops.

The trick is to ensure your flexible spending money is automatically transferred into an account (or onto a card) so that you have that money available, and that it’s a set amount. What’s nice about this system is when that money is out, it’s out. 

If you find yourself really tight on money each month, or want more money for flexible spending, you’ll need to get creative in cutting back from other costs, and updating those automations. 

Turn it into a game

The most radical spending shift I’ve ever seen was solved this way — the couple was overspending by $9,000 per month (double what they were earning as a double income, no kids household), which had resulted in a line of credit balance north of $100,000. 

They just could not seem to stop — tickets for professional sports, clothes, car payments, golf memberships, and, and, and ...

So, we turned things upside down and into a game of “How much can we keep?”

The couple used their competitive natures to further challenge themselves to spend less and less every day — from $300 to $120 and then to $20 a day — until the budget deficit was closed, and they had enough money to start making payments on the line of credit balance. They’d compare who was more frugal that day. Once they shifted into this mode, they made bigger money moves, too — got rid of one car, changed jobs, cancelled trips, etc.

Could you turn your budgeting process into a game? Get the best interest rate. Save the most using coupons.

Bullet journaling 

If you love that pen to paper feel, this can be very rewarding. Write out the cash inflows, then put bullet points underneath for your expenses.

If the money in covers the money out, the budget balances. Many people add how they feel about things to their bullets, which makes it easier to nix something off the expense list if it’s non-essential and not bringing you any joy.

The 60/20/20 rule

Some people have very good memories and can mentally organize money in their minds. If that’s you, you should divide up your after-tax income into three categories: needs (60 per cent), wants (20 per cent) and saving/debt reduction (20 per cent).

There are so many ways to split up money, and my best guidance if you’re using this method is to keep it super simple so that you can remember the percentages easily.

If you’re going to use one of these budgeting alternatives, pair the process with an annual financial review with an adviser so that they can crunch your numbers and confirm that your net worth is growing. 

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star