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Money Management Tips and Finance Basics

How to Balance Your Finances Without a Budget

Nearly every expert will tell you that meticulously monitoring your spending (Excel spreadsheet and all) is the surest way to stay on track financially. And for the three or four of you out there with the capacity to do that, congratulations. The rest of us can rely on these alternative strategies—just as effective and a lot less labor-intensive.

By Ashley Tate
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3. Tally Your Regrets

Chances are, you’ve heard of the “latte effect.” This is the phenomenon in which people habitually fritter away small amounts of money on frivolous things and are barely aware of the cumulative cost until they add it all up. This is often cited as an expense that can be reduced by budgeting. But there’s another way to eliminate mindless expenditures, according to Gregory Karp, the author of The 1-2-3 Money Plan ($18, Just look at your credit-card and bank statements several times a year. For each purchase, he says, “ask yourself, ‘Do I regret buying that?’” You may be shocked to realize that in one three-month period you spent $95 on iTunes downloads and 10 percent of your take-home pay on takeout.

Write down any purchases that make you wince, and keep that list posted by your computer or on your cell phone. “Being aware of where you’re spending too much should deter you from making the same mistakes again,” says O’Connor.

4. Maintain an Extra Savings Account for Long-Term Goals

Maybe you wish you could afford a new computer. Or you’re hoping to celebrate your wedding anniversary by taking a cruise. One easy move can make it more likely that you’ll succeed. Instead of just stashing money in an undesignated savings account, Brad Klontz, Psy.D., a financial psychologist in Kauai, Hawaii, and a coauthor of Mind Over Money ($11,, suggests that you create a new one with a name that specifically refers to your goal: “Tom and Samantha’s Trip to Greece,” say, or “Elinor’s Laptop Fund.” (At many banks, if you transfer a specific amount into this account each month or maintain a minimum balance, you won’t be assessed maintenance fees.)

“Saving money is an abstract concept, but doing this exercise taps into the emotional part of your brain,“ says Klontz. “You are less likely to feel like you’re doing without, because you’re saving toward a clear goal that you genuinely want to achieve.”

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