2 Weird Yet Worthy Strategies for Managing Your Money

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There's no "perfect" way to manage your money. Stop looking for the silver bullet or the magic formula -- it doesn't exist.

In fact, money can be counterintuitive. The best budget might be not having one at all. Seriously. This is called the "anti-budget," and we explain it in detail below.

Let's chat about weird strategies for managing your money. You might discover an oddball tactic that works well for you.

The Anti-Budget

Budgeting can be cumbersome. Tracking, itemizing and classifying how you spend every last penny can feel tedious.

It's no surprise that budgeting -- like dieting -- has low long-term adherence. People get excited about it for a week or two, and then they become busy. They're distracted by something else. They forget.

Why not just cut the charade and embrace the budget that you'll stick to: the anti-budget? This tactic involves skimming your savings off the top first and going wild with the rest. Spend without regard to how much you've shelled out on concert tickets or restaurants. There are only three rules:
  1. Your savings -- including debt payoff, retirement, investments and cash savings -– get pulled from the top first. No exceptions.
  2. Your bills -- including your mortgage or rent, utilities, insurance premiums, and other fixed costs -- get paid second.
  3. You never live beyond your means. If this requires you to use debit instead of credit, so be it.
That's it. No tracking. You don't need to worry that your clothing budget is $35 but this month you spent $43. You don't need to line-itemize every tube of toothpaste and can of dog food. Just pull your savings from the top, pay your bills and spend the rest guilt-free.

How much should you save? I recommend 20 percent as a bare minimum, which should include 12 percent to 15 percent into retirement accounts and the rest as cash savings for building an emergency fund, saving for your children's education, saving for big-ticket purchases and preparing for vacations and holidays.

If this seems like a lot, try boosting your savings rate 1 percent at a time. If you earn $4,000 per month, an extra 1 percent is $40. Trim this from your budget, adjust to the new lifestyle, and repeat.

If you're carrying debt, save more than 20 percent of your income and use this excess to accelerate your debt repayments. For the purposes of this budget, the minimum payments on your debt count as "bills," while payments in excess of the minimum count as "savings."

The Live-on-One-Income Budget

Here's another unusual strategy: If you're part of a dual-income couple, live on one income and save the other. I hear you protesting already: "That's impossible! We need both incomes!"

I'd invite you to challenge that assumption. You may need both incomes to maintain your current lifestyle, but what would happen if you downsized into a smaller home? Dined out less often? Stopped getting expensive haircuts? Traded your gas-guzzler for a more fuel-efficient vehicle? Rather than focusing on all the reasons that it can't work, ask yourself how you could make it work.

If you need to wade into this slowly, start by living on 1.5 incomes: save half of one partner's income. Once you adjust to that lifestyle, save 75 percent of that person's income. Then increase it to the entirety of that spouse or partner's income.

Remind yourself that the median U.S. household has 1.3 income earners for 2.5 people -- meaning that the median household has roughly one income per two people. If that many people are making it work, perhaps you can, too.

When you're starting this project, save the income of the lower-earning partner. After you achieve this, challenge yourself to flip the tables: live on the lower-earner's income and save 100 percent of the higher salary. By doing so, you'll save more than 50 percent of your combined income. I've done this for three years; here are the results.

As a bonus, if you ever decide to convert into a one-income household, you'll have a far easier time making the adjustment, because everything within your life -- from the mortgage or rent you've selected to the car payment you carry -- will be optimized around a single income.

Paula Pant quit her 9-to-5 job, traveled to 32 countries, launched her own business and became a successful real estate investor. She's the founder of Afford Anything, an online movement against tired old financial advice that says you should skip lattes and chain yourself to a desk for 40 years. Afford Anything helps you crush limits, build wealth and maximize life.
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