Why This Guilt-Free Budget Works For Me And How You Can Try It

Method #1

The standard way to go about the guilt-free budget is to decide how much you want to tuck away toward your savings and then use the rest toward your monthly spending. This only works if you have an idea of your take-home pay and your expenses.

Interestingly enough, if you set a reasonable savings goal, you might be surprised at how you manage to spend within your means. When I started using this budgeting method, I committed to saving $250 per paycheck, or roughly $500 a month.

The year was 2006, and I was bringing home about $1,900 a month. Saving 25% of my paycheck was a lot, especially when I was living on my own in Los Angeles and over a third of it was going toward my rent. Because I was set on stashing $500 a month, I looked for all the ways to cut back on my expenses and made it work.


Method #2
Subtract your outgoing (aka bills and debt) from your incoming (aka take-home pay). Whatever remains is what you have left to spend on whatever you please. 

This is a slight deviation from the standard guilt-free budget. But I've found it might be more doable if you side hustle or freelance and your cash flow goes up and down.

After my bills are accounted for and I've set aside some money for self-employment taxes, I typically save a percentage of what's left over. And when I was feeling particularly ambitious, I would divvy up the rest of what remained — for instance, 25% toward retirement, 25% toward a new car fund, and 25% toward my emergency fund. 

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