A different way to successfully budget


If the beginning of the year is the time when we’re supposed to get on track towards reaching our goals, the end of the year is when we can often go off the rails. Between wrapping things up at work and finishing out the year strong, with holidays and cold weather piled on top, the end of the year can be busy and overwhelming. This can lead to not exercising as regularly as we usually do, eating more than normal, and…blowing through the budget.

Day-to-Day Budgeting

Budgeting is not something that we often discuss with clients. In fact, I have found that many of our clients don’t want us to dive into their day-to-day spending, analyze everything, and make suggestions of where to cut back.

While our clients hand over information about their entire financial lives to us, spending can be very personal to some and not everyone is comfortable sharing. On the other hand, many clients have no problem at all sending us their full credit card and bank account statements.

Regardless of which camp you’re in, you may be surprised to hear that we truly don’t care what you spend your money on day-to-day as long as you’re following our recommendations and doing what you need to do to reach your financial goals – saving enough for retirement, paying down debt appropriately, not accruing new debt like credit cards, etc.

A Real Life Cash Flow Example

In a recent client meeting, the couple I was with brought up that they have been struggling with managing their personal spending. They told me that they give each other a budget each month, but one spouse always spends more than their allotted amount. Sometimes both will go over their budgets. While they see this as being an issue, they don’t want to micro-manage each other’s spending.

After hearing about this dilemma, I introduced the concept of reverse budgeting to them. This concept can help us move away from worrying about every little day-to-day expense and whether one spouse or the other spent more than they were supposed to.

Reverse Budgeting

Reverse budgeting is the concept of ‘paying yourself first’. In other words, when you prioritize saving for retirement, saving for short-term goals, and paying down debt you can spend whatever is leftover without worrying about where every dollar goes. If you’re able to meet all of your financial obligations, including those I mentioned above, then why does it matter what the rest of your money is spent on?

Everyone has different preferences and people find happiness in different things. Where you choose to spend your money is unique to you. What truly matters to us is that you’re on track to improve your finances and reach your goals while spending money on the things that you enjoy.

(Of course, I still encourage tracking and reviewing your spending as it can be an extremely helpful habit. Doing so can help you be mindful of where your money is going, evaluate if you’re actually spending on things that you value or if there are areas of waste, and can help identify and prevent fraud.)

Stay On Track With Reverse Budgeting

Sometimes, staying on track towards reaching a goal means that things need to be simplified. This can be especially true regarding personal finances. If you can make hitting your financial goals your number one money priority (preferably through as much automation as possible) and you’re able to consistently make progress and achieve those goals, then you will have the freedom to do what you want with the rest of your money and not have to agonize over where every dollar is being spent.

Subscribe to Our Blog

Sign-up for our blog notifications below to stay up-to-date on the latest from Market Street Wealth Management Advisors. 

Sign Up


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Market Street Wealth Management Advisors, LLC [“MSWMA”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from MSWMA. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. MSWMA is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the MSWMA’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.mswma.com. Please Note: MSWMA does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to MSWMA’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a MSWMA client, please contact MSWMA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.