Money Rules are Better than Budgets

Budgeting is a bit of a four-letter word in my world. I’ve never enjoyed budgeting. Tracking every expenditure, feeling guilty going over budget, or having to say no to fun outings… Just not my thing.

But despite my dislike for budgeting, I have always managed to live within my means and contribute excess funds to my savings and investments, even in the freelancing early days where my paycheques were pretty lean (more about my early freelance journey here, here, and here).

So how did I do it? How did I stay on budget without having a budget? Well, I’ve created a series of money rules that help me keep my spending in check. They allow me the freedom to spend money on things I care about and save money on things I don’t care that much about. Also, keeping these rules give me a loose budget because I know approximately how much I’ll spend per month based on certain things.

This is not a perfect system, and I’m certainly not recommending it to everyone. If you have debt you’re trying to pay off, or you struggle with over-spending, you might need adhere to a stricter budget. But, if you are generally earning more than you need and are self-motivated enough to keep your own rules, this might be a system for you!

So, here are some of my money rules that have kept me away from budgeting.

1. I can go out for dinner as a social activity, not because I’m too lazy to cook. We all know going out to eat can add up! But it’s also one of my favourite things to do! So, to curb the spending on eating out, I’ve made it a rule that I (virtually) always go out for food as part of a social activity, not just by myself when I’m feeling too lazy to cook. This cuts back on the number of times I go, but also keeps it as a special, fun event that is something to look forward.
2. I don’t spend money on things I don’t care about. I drive a 2003 Chevrolet Cavalier. It has manual windows and locks and no air conditioning. I bought it back in university and it’s the first and only car I’ve ever owned. Most of my peers – those of us creeping up on 30 – have long since upgraded their cars to something nicer. And while there’s part of me who wants to do that too (especially now in the summer! No AC can be brutal), I honestly just don’t care. So, I stick to my values and keep my old car. It does what I need it to do, it’s reliable, so there’s just no need to spend the money on an upgrade.
3. If a mid-afternoon coffee is going to bring a boost (physical or psychological), it’s a valid expense. I used to feel so bad about buying coffee in the afternoons. Maybe it’s because of the constant shaming millennials hear about not being able to buy houses because we spend too much on lattes. But the reality is this: going for a coffee in the middle of the work day (even when I can make it myself!) makes me so happy. It boosts my mood and productivity. And, because I often walk to get a coffee, it gives me a bit of exercise too! And, because of rule #1, I don’t ever buy lunch during the work week, and so I save some money that way to go towards my coffee fund.
4. I only buy clothes I will wear a lot and matches other items I already own. Pretty self-explanatory, right? Every time I buy a piece of clothing, I consider what I already have that it will match and whether or not it’s something I’ll get a lot of use out of. This also prevents me from buying duplicates – even if the leggings are cute, I have multiple pairs and don’t need (or won’t wear) any more!
5. I always off my credit card in full every month – no excuses. This is a financial rule of thumb that EVERYONE should follow, but doing so has kept me out of any kind of expensive credit card debt.
6. I make my money work for me. This includes a few things. I use a cash-back credit card for all purchases to get 2% on my top spending categories. I invest my excess money in index funds to take advantage of the magic of compound interest. And I keep my short-term emergency fund in a high-interest savings account so it at least earns a bit more than what the bank offers.

These simple money rules have helped me live within my means, save and invest, and generally stay within budget… all without actually putting pen to paper (or finger to app) to make a budget.

Your turn – what are your money rules?