If you’ve never heard of the “Things I Didn’t Buy” list, then you’re in for a real treat. The “Things I Didn’t Buy” list is a way to keep track of all of the things you didn’t spend money on and reward yourself with something worthwhile for your efforts.

IT’s is a simple strategy anyone can use to help curb their spending and save money.

All it takes is three easy steps.

Step 1: Cut out non-essential purchases

The first step is to identify what “non-essential” spending you want to monitor/eliminate. For example, you could choose things like clothing, dining out, and all online shopping. If you really want to go for it and see how much money you can put back in your pocket, then cut out everything except your normal bills and groceries.

It’s up to you to decide how challenging (beneficial) you want this to be. The more you’re willing to give up, the more money you’ll save.

Additionally, you need to decide on a timeframe. Commit to no less than one week and no more than 3 months to start. Personally, I think one month is ideal but that’s just me.



Step 2: Create your “Things I Didn’t Buy” list

When you feel the urge to spend money on something you’ve deemed as “non-essential,” write it on your “Things I Didn’t Buy” list. Include the name of the item or service as well as the price.

If you’re up to collecting some additional information, record where you found the item (online vs. in-store), what triggered you to want to make the purchase (window shopping, online shopping, email marketing, social media, etc.), and how you were feeling at that moment (bored, anxious, happy, or too much wine). You can also track how hard it was for you not to make that particular purchase.

Gathering this extra information doesn’t take much time and is immensely beneficial. It can help you to identify what environments or feelings trigger you to want to buy something. Once you’ve identified your triggers, you can take appropriate steps to avoid or even eliminate them in the future.

For instance, you may discover you do most of your online shopping while sitting in your car while waiting to pick up your daughter after soccer practice. Once you know this, you can take steps to eliminate the behavior by reading a magazine, calling a girlfriend, or *gasp* leaving your phone at home.

Chances are you’ll start to see other patterns emerge and be in a better position to fight the urge to spend or eliminate the trigger altogether.



Step 3: Review and feel proud

At the end of the “month,” or whatever timeframe you’ve set for yourself, it’s time to pull out your list and review it.

Go through each item and tally up everything you didn’t buy. You might be surprised by the total amount. All those “little things” you didn’t buy can really add up. Seeing this sum of money you saved instead of spent will make you feel proud and accomplished. Not only did you save a ton of money but you also proved to yourself you’re capable of resisting your spending urges and make the smart financial decision even when you didn’t want to.

Now for the best part!

It’s time to take all of the money you saved by not making silly impulse purchases and put it toward a more meaningful and well-thought-out purpose. It could be toward your retirement, college for the kiddos, or to bolster your emergency fund. Or, perhaps now you can afford to buy that new chair for your work-from-home office or take your sweetie out for a well-deserved night out.

The point of this exercise is not to deprive yourself. Instead, it’s a way to become more conscious in the moment about how you spend your money.


Why it works

This simple strategy can be highly effective in breaking bad financial habits and helping you form new ones for a few important reasons:

  • It’s simple. There are only three steps. And all you need is a piece of paper and a pen, or your mobile device to make a list. You are more likely to form a new habit (not spending on non-essentials) if it’s super easy to do.
  • It’s revealing. You may not think you make a lot of frivolous or unnecessary purchases, but this exercise is often quite revealing. Most people are shocked by the number of items on their list, as well as the final dollar amount. If you want to change a habit, you first need to be clear about what you’re up against. Your “Things I Didn’t Buy” list helps you know how big of a battle your in for.
  • It helps you learn about your spending habits. If you collect data on how you feel when you want to spend, it can be an eye-opening experience. Our emotions are often the biggest triggers of our spending habits. There’s a reason people often find themselves at the mall after a stressful week at work.Another powerful, but less obvious, trigger is our environment. When you’re at the mall trying to “spend the stress out of you,” do you find you’re always buying something delicious but terrible for you whenever you walk by the Food Court? Talk about a double-whammy! Not only do you spend more money but you’re wreaking havoc on your diet.

    Knowing these things about yourself may provide just enough motivation to avoid the mall entirely or at least the Food Court!

  • It gives you something to work toward. If you want to form better habits, rewards help. Knowing there is something special waiting for you at the end (money in your pocket, a personal sense of accomplishment) and you get to do something positive/fun/exciting with it, is motivating and makes it that much easier to do it again and again and again (hopefully).



Budgets don’t work for a simple reason – human nature.  Seriously.

I expounded on that in Budgets are Bullshit Part 1, but let me summarize:

They don’t work because few of us will take the time to gain the knowledge and build the data gathering, tracking, and monitoring systems required by a legitimate budget.  The time commitment alone is too much for most people.  Add the psychological weight of always telling yourself “no, you can’t buy this, you can’t do that” and – well, you know how that goes.

As long as humans are involved, budgets will continue to fail us.

Or, said more simply:  Budgets are bullshit.




The sooner we accept and move beyond this way of thinking the better off we’ll be.

So, what’s the alternative?  Beats me. That’s for you to figure out.

Okay, okay – joking of course.

There is a 
better way.

Yes, there is a better way than the traditional budget, but it’s not perfect.  It still requires some work on your part. You didn’t think you could get away with no work, did you?


Don’t start with the hardest, most complicated thing.  Start with something simple and easy. Then grow into it.

Budgets sound simple and easy.  And, if your definition of a budget is filling in predetermined categories on a piece of paper that has no ties to reality then, yes, it’s quite easy.  Carry on if that’s your objective.

But, if your objective is to use a budget as a meaningful financial tool to help you accomplish the important things in your life, then creating a budget is decidedly not simple and not easy.  Read Part 1 of Budgets are Bullshit here for more.

The constructive part of traditional budgeting requires us to be aware of where our money goes.  Knowing how/where we spend our money is a critical component to smart money management. However, we don’t need to know where all of our money goes.


Your Budget Solution

I don’t believe in budgets but that doesn’t mean it’s all bad.  We want to harness the good parts of classic budgeting and eliminate the rest.

This system does just that.

It’s best explained via an example.

Think of your income and spending in terms of buckets.  We only need to concern ourselves with 4-5 buckets, not the dozens of spending categories you see in traditional budgets.


Bucket A – Take-home pay.  The first and most important part of the system is knowing how much your monthly take-home pay is.  In this example, your take-home pay is $4,000.

    • Take-home pay – $4,000


Bucket B – Regular monthly expenses.  These are expenses you have to pay every month with most of them being the same amount each month.

    •  Regular monthly expenses – $2,000
      • Mortgage/rent/2nd mortgage/Home equity line of credit
      • Auto loans/leases
      • Credit card payments if carrying a balance.  Do NOT include if you pay the balance in full.
      • Insurances – all non-work-related
      • Utilities (it’s okay to use an average)
      • Other regular monthly expenses – daycare, alimony, gym membership


Bucket C – Monthly savings.  While not an actual “expense,” it’s still a cash flow item.  The most effective savings plans are monthly and automated. Note: workplace savings, such as 401k’s, are NOT included here.

    • Regular monthly savings/investing – $300
      • College savings
      • Retirement savings (outside of work)
      • Emergency fund


Bucket D – Regular non-monthly expenses.   These expenses occur regularly but not monthly such as travel or “Christmas.”  Best tactic is to turn these variable expenses into a recurring monthly expense.  In this example, you spend $4,800 per year or $400 per month.

    • Regular non-monthly expenses – $400
      • Travel
      • Holidays (i.e. Christmas)
      • Insurances (if paid annually, semiannually, etc.)
      • Gift giving


Bucket E – Lifestyle expenses.  The last bucket is for all remaining monthly expenses.  To get to this number you subtract buckets B, C, and D from bucket A.  $4,000 (A) – $2,000 (B) – $300 (C) – $400 (D) = $1,300 (E)

After paying your regular monthly expenses (B), saving for future goals (C), and setting aside money for regular non-monthly expenses (D) you have $1,300 for lifestyle spending (E).

    • Lifestyle Spending or “Everything Else” – $1,300
      • Groceries
      • Auto: gas, oil changes
      • Entertainment
      • Dining out
      • Health and fitness
      • Personal care



True, there are elements of traditional budgeting in this system.  We kept the parts that work and got rid of the parts that don’t.




Knowing where some of your money is going is important to both systems.  You need to know how much money you make, what your regular financial obligations are, and if you want to save for future financial needs.

However, this system does NOT require you to make future projections or track your everyday spending.  It doesn’t put restrictions on how you spend your money or live your life either. It doesn’t wage psychological warfare on you by reminding you at every turn how little you get to spend.

Let’s dig into this a bit further to illustrate the differences.


Buckets A, B, and C are super easy to calculate.

    1. To get your take-home pay you just need to look at your pay stubs
    2. You get monthly bills/invoices for your mortgage, car payments, credit cards, and other regular monthly expenses or they are readily available online
    3. Savings is a voluntary process which means you know exactly how much you’re saving

Getting accurate data quickly is incredibly important and this system does just that.

Doing so for bucket D is a little harder to come by.  This is the first real “budget” item and it’s subject to the same flaws as traditional budgeting.  Namely, you have to guess how much you want to spend in each category.

There’s no way around this so don’t overthink it.  Estimate how much you spend in these categories each year and divide that number by 12 to turn it into a monthly number.  Then, save this amount into a separate account until needed.

Once you get buckets B, C, and D out of the way ($2,700 in our example), you’re left with bucket E ($4,000 – $2,700 = $1,300).  This $1,300 is the maximum amount you can spend on all other items (assuming you don’t go into credit card debt – which you shouldn’t).

Traditional budgets would have you line item this $1,300 and track how much you’re spending in each category.  But, do you really need a line item budget for this $1,300? Is it realistic?

No.  It’s not needed nor is it realistic.

Look, no one spends the same amount of money each month on groceries, gas, dining out, entertainment, etc.  No one. So, why are we tracking it as if it matters?


Here’s what actually works.

First, per our example, fughettabout the first $2,700 of your take-home pay because it’s already accounted for.  You only need to concern yourself with the remaining $1,300 which is where all of the action is.

Now, how do we handle the $1,300?

Truth is, who knows; it’s different every month.  You figure it out as you go along. You figure it out every month in real-time because that’s how we live our lives.




You don’t need a budget to tell you you have to buy groceries or put gas in your car.  And you’re not going to give up your morning Starbucks, and the delicious dessert that occasionally accompanies it, just because you’ve hit your “dining out” number.

The beauty of this system is that you don’t need to have a plan for every one of your $1,300 lifestyle dollars.  You start the month knowing you have $1,300 to spend on living your life and you will automatically choose how best to spend that $1,300 without a budget getting in the way.  And if it’s the 20th of the month and you’ve already gone through your $1,300, you’re done spending for the month.

“Yeah right, Ed.  If it’s the 20th of the month and I’ve already gone through my $1,300, I’m gonna spend more money.  Who are you kidding?”

True, you probably would spend more money.  At least at the start. In the early stages of implementing this system, you’re likely to mess things up as you work through the learning curve.  This is perfectly normal as most of us don’t really know where we spend our money.

But, if you give this method a little time to run, you’ll naturally settle into a spending pattern that works for you.  You’ll quickly cut out spending on things that aren’t important and focus your spending on the important things in your life.

And you know what you won’t do?  You won’t waste a bunch of time putting together an unrealistic budget and obsessing over every dollar you spend.  You won’t get frustrated at how suffocated you feel because you can’t spend more money on dining out this month just because your damn budget said so.




The point is you will organically make different spending decisions because you have the freedom to do so.  

Some months you’ll spend more money on entertainment because your favorite band is coming to town.  Another month you’ll drop more money than usual on gifts or dining out or whatever. It’s a dynamic, fluid process because THAT’S LIFE.

Budgets are static, confining, require a lot of time and attention to detail and a commitment almost no one is willing to make.  Do yourself a favor, test out the new system, and free yourself from the classic budget bullshit.




One of the most common words you hear out of any financial professional’s mouth is budget.

What if I told you that I don’t believe in budgets?   There. I said it. A counter-intuitive view on the world of managing our money.   Let’s take a look at this.

“You need a budget.”

We’ve all heard it before.  Go to any personal finance site and you’ll be hit with the  “you need a budget” rhetoric post haste.

Upon hearing said advice, you’d likely nod your head unquestioningly and mutter to yourself “of course, I need a budget.  Duh. Tell me something I don’t know.”

But, what if I told I don’t believe in budgets?  In fact, what if I told you budgets are bullshit? 

Fact is, for most of us mere mortals, budgets are, indeed, bullshit.  Well-intended bullshit but bullshit nonetheless.

To the personal finance community (PFC) this is heresy.  If there’s one thing I know about the PFC, they love them some budgets.

Don’t get me wrong.  Budgets sound reasonable.  Actually, they sound quite smart.

Budgets look beautiful on paper. It’s all right there in front of you.  All you have to do is follow the budget you created…

The problem with budgets is that they don’t translate well to how we actually live our lives.



And the problems begin right from the start.  They begin from the first moment you create your budget.

If you’re like most people, you’ll start by going online and finding a free budget template because you’re savvy like that.

And, just like that, without even knowing it, you’ve set yourself up for failure.  You’ve pretty much ensured that a few months from now (if that long), you’ll be agreeing with me that budgets are bullshit.

How can I be so sure?

I’ll get to that in a moment but, first, it’s important we establish what I mean when I say “budget.”  Like most things, one person’s definition of “budget” may be very different from another’s. Let’s make sure we’re talking about the same thing.

According to Investopedia, a budget is:

An estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis.

Um, right.  Let’s try again.  Here’s my definition of a budget:

Your projected monthly take-home income and expenses broken down into different categories.

No surprises so far, right?  It’s what we’ve always been taught without the financial jargon.

In today’s internet age, it’s even easier.  We just Google “budget worksheet,” choose the one we like the most, and start completing it.

Okay, now that we’re on the same page as to what a budget is, let’s go back to my example.

You’re ready to start doing this budget thing and Google “budget worksheet examples” and choose the one that fits your eye.

I’ve done exactly that here.



Now, picture yourself ready to tackle this budget project.  It’s Sunday morning and you’re feeling good because you’re highly motivated to get your money right.  This budget is just an easy first step towards total money mastery.

You’ve planned ahead.  You have your “Monthly Budget” worksheet in front of you and it’s printed in color because you’re worth it. Your favorite pen has joined you and the calculator app on your phone is open and at the ready.  You’re in a quiet spot in the house, have your coffee, an assortment of muffins and fruit, and you get to work.

First step: enter how much you plan on spending in each of the categories in the budget worksheet.

    1. Mortgage/rent – Oh, I got this one.  I know exactly how much we pay monthly.  So far so good.
    2. Household maintenance – Hmm.  How should I handle this one?  What’s considered “maintenance?”  Cleaning supplies? Garbage bags? Paying the plumber to unclog the basement drain?  Geez, I really don’t know. Ah, screw it – I’ll just go with this…
    3. Taxes – Uh oh.  How I hate this tax stuff.  Wait, do I even need to worry about taxes since we’re working with my take-home pay?  Yes, I think that’s right. So, why have it in here at all? Maybe for property taxes?  Yeah, that’s gotta be it. Oh wait, but aren’t our property taxes included in my mortgage payment?  I don’t really know. Stupid taxes. I’ll just skip it.
    4. Insurance – I assume they mean all insurances.  Probably not health insurance, though, because that’s through work.  Definitely, our auto insurance. Oh wait, we pay that every six months.  Do I include it here? But, we don’t pay for it monthly, how can it go here?  Do I just average it? Ugh. Homeowners insurance? Isn’t that also included in our mortgage payment?  Grrrr. Why does this have to be so complicated?”

There are two flaws (one fatal) at play here already.  

The non-fatal flaw is in not knowing what the budget is asking for.  All budgets assume you know what “income” means, assumes you know what “taxes” means, assumes you know “mortgage” means to include property taxes and homeowners insurance and so forth.

As you can tell from this example, it’s not always easy to know how to classify your spending.

One way around this is to create your own definition for each category.  It’s not a perfect fix but it keeps things moving along.

The second – and fatal – flaw is entering budget numbers without having a firm basis for doing so.  Let’s use “household maintenance” as an example.

Does anyone really know how much they should budget for household maintenance?  Not really. If you don’t know how much you’ve spent on household maintenance in the past, how can you accurately project into the future what you should be spending?

It makes no sense.

Our past spending forms the basis for our future spending.  Without having a good understanding of how we’ve spent in the past, we can’t expect to have a good understanding of how to budget for the future.




And, since few people know where their money goes at the level required to complete an accurate, and therefore useful, budget, right from the outset, the system is primed for failure.  You think you’re building a solid financial household when you’re really building a house of cards.

And this is just the first fatal flaw.


Yes, budgets are forward-looking.

But, their legitimacy comes from looking backward, from looking at how we’ve been living our lives.

It has been said that the best predictor of future behavior is past behavior.  It’s hard not to apply that psychological lean towards budgets. You don’t automatically become someone else because you complete a budget, do you?

Budgets need to be accurate.  The amounts you put down on that piece of paper need to be grounded in how you currently live your life.

Is it reasonable for someone to say: “I’ve been spending too much money on dining out and entertainment.  It’s gotta stop. I don’t really know how much I’ve been spending but I know it should only be about $300/month.”

Is this reasonable? Don’t answer too quickly.  You need more information to weigh in with a valid opinion.

She thinks she should only be spending $300/month on “entertainment and dining out” because those aren’t “necessary” expenses according to the personal finance blogs she’s been reading.  No one needs to go dine out, right?  Perhaps not.

But, this is bigger than “dining out.”   It’s about how it makes you feel.

Her dining out and entertainment budget is spent on going out with her girlfriends for lunch and dinner and drinks after work.  She also loves movies and enjoys seeing them on the big screen. She loves going to concerts and seeing shows at the theater – something she partakes in several times a year.

These activities, and the people she’s spending time with, bring a tremendous amount of joy to her life. And that budget just put a serious constraint on her joy. 

Added together, it costs her about $700/month on average for these activities.  Of course, she’s unaware it costs her this much. And she hasn’t inspected what she’s getting for her money.  She just knows she’s spending “too much” because all of the stuff she’s reading says “dining out” is a great place to cut spending.


Knocking $400/month off your monthly spend is really easy when they’re just numbers on a page.  But, to take that out into the real world where you actually live your life? That’s an entirely different thing and it’s another reason why budgets don’t work.

Do you really think she’s going to stop participating in some of the most enjoyable aspects of her life just because she wrote $300 in the entertainment category?

This isn’t a $400 decision.  She hasn’t asked herself to stop spending $400 a month.  She’s asked herself to change the way she lives her life and how she interacts with the most important people in it.

Is this a reasonable ask?

No way.

If she knew how much she normally spends on entertainment and examined what that spending meant to her life satisfaction, she probably would have put down a different number.  But, in order to get an accurate entertainment spending number, she would have to already be tracking her spending and do so over an extended period of time (6-12 months at a minimum).  Who does that?

Budgets are supposed to guide your decision-making, they’re supposed to be the lynchpin of your new financial life and outlook.  They’re supposed to be the first step to getting your financial life on track.

And yet, they’re built on whims and best guesses, unrealistic time and data tracking commitments, on the propensity for people to take the path of least resistance.  They end up being nothing more than “numbers-on-a-page.” They’re meaningless.

The reality is we don’t take our budgets into the real world and live it.  Because when we do try to implement our budget and cut out “$400 of unnecessary entertainment expenses” we quickly realize the difference between writing down spend “$300/month for entertainment” and actually living it.  We realize this isn’t about “money,” it’s about how we live our lives.  

Against such formidable opposition, budgets don’t stand a chance.

Budgets are built for failure. They’re bullshit.



“Yeah, but what about all those people who are using a budget effectively?“

What about them?  What about those people who can eat anything they want and remain annoyingly thin?  Should we follow suit and pull up a chair at the all-you-can-eat-buffet?

Look, there are always going to be a few outliers who can do something us mere mortals cannot.  They’re the exception. You never want to compare yourself to the exception.

Put the odds on your side.  Budgets work great on paper.  They’re terrible in practice.

So, you’re saying we shouldn’t know where our money is going?  That we shouldn’t have a plan for where we spend our money?

Let’s not get crazy.  I do believe we need to track our expenses. But to what level of OCD detail is really necessary?

Most people don’t know where their money goes.  At least not at the level of detail where a budget is useful.  With a budget, you can’t “sort of” know. You must know where your money is going.

In the real world people don’t manage their money at the “budget” level.

For example, every budget I’ve ever seen has a line item for groceries. Makes sense.  We all have to eat, right? So, without giving it a second thought, you fill in a number and are ready to go.

Next step, hit the grocery store and buy groceries.  But, you don’t only buy groceries, do you?  No, you buy other stuff too.  You buy household cleaning products.  You buy books and magazines. You buy shampoo and personal care items.  Sometimes, because you’re tired and don’t want to run to another store, you buy items like light bulbs and school supplies and a bunch of other items that are more expensive at the grocery store.

You pay with a debit card so you have an official record of how much you spent and where.  You save your receipt because that’s what you’ve been taught to do. You do this multiple times throughout the month.

It’s month-end and you’re feeling pretty good as you begin to calculate how you did compared to your budget.  As you review your “grocery” receipts you realize what is probably already obvious to you and I. You can’t just add up your monthly receipts ‘cause there’s a bunch of non-grocery spending in there, can you?

No, no you can’t.

In order to get an accurate “groceries” number, you need to strip out any items that weren’t spent on “groceries.”  

That means going through every receipt line-by-line and adding up only the “grocery” items into your budget.

How long before you to say “screw it” and just add up the receipts?  Like 20 seconds max. And just like that, your budget is wrong (again).  And that’s just one budget category. You have 24 more categories to go.  And this is just the first month!

How much longer do you need to go through this horrible exercise?  Um, how does THE REST OF YOUR LIFE sound?




Budgets are like incredibly strict diets.  Diets with strict rules for what you can eat AND strict rules for recording EVERYTHING you eat.

Like diets, budgets are well-intentioned but almost always fail to live up to their promise. And the biggest reason for their failure is simple — we’re humans, not computers.

We live our lives in the real world, a world where things rarely fit into tidy little categories.  Life is messy. Further complicating things, unlike diets, budgets aren’t only applicable to one person.  They apply to the household.

Meaning, if I go on a diet, my wife isn’t obligated to go on the same diet or any diet at all.  But, that doesn’t work with budgets. Budgets require both of us to be on the same budget.  When was the last time you and your partner agreed on anything spending related, much less 25 categories of spending every month of every year for the rest of your lives?

This “budgets are bullshit” idea is starting to make more sense now, isn’t it?

You might be saying to yourself, “okay, If budgets are, indeed, bullshit, what’s the alternative?  There must be a reason why everyone touts budgets as the lynchpin of financial responsibility.”

I’m glad you asked.  There is a better way.  A way that builds on the good qualities of budgeting while acknowledging, and eliminating, many of its deficiencies.

If you’re ready for a new way of thinking, join me here.



Ever get paid on a Friday and realize by Monday morning you have no money left??

Yeah, we have all heard that much of the world lives this way. But, does that make it okay for you to live this way??

Not taking control of your money, not understanding what your obligations are and what is left over after your bills are paid, and worse yet, not paying your bills on time, are mistakes that will continue to haunt you and hold you back in all aspects of your life.

We have worked with so many women who would rather stare at the sun for an hour than review their bank statements. They have no idea what is going on in their financial lives and the thought of finding out scares the shit out of them. And guess what else– few, if any, of them are on track for their goals either!

Knowing exactly how much money you make (your income) and how much money your lifestyle demands (your spending) is a critical first step to getting on track.

So, how do you get started?

1) Calculate your monthly income

  1. If you’re paid every two weeks – take your take home pay (the amount that is deposited into your checking account) and multiply by 26
  2. if you are paid twice per month – take your take home pay and multiple by 24
  3. Did you know you were making that much/little??

2) Pull last month’s bank statement and review it.

  1. This may sound horrible but how will you know where your money is going if you never look at it? Make it a part of your weekly routine to check in on your spending.
  2. Using a credit card? Pick one card to use for spending and review your charges online at least weekly.

3) List all of your bills for the month, when they are due and how much is due. Include everything! Your rent/mortgage, car payment, credit card payments, student loans, cable/internet, cell phone, Roth IRA savings, cash savings, etc. (I hope you are saving something! More about this at a later time…)

 4) Subtract number #3 from #2 – this is how much you have left over each month to live your life. If you aren’t saving, perhaps you can peel off some of this excess and put into a Roth IRA. Not much left over? Stay tuned for tips on how to cut the fat.


I sincerely hope you take the time to complete these steps. Most likely you will have some questions about what to do with this information now that you have it – I will be sharing more thoughts on that soon! But in the meantime grab a girlfriend and start talking with her about this stuff! You likely aren’t alone with your questions and perhaps you can pick up some good tips from your pals!