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Intuitive budgeting involves approximating your expenses instead of counting every penny. For some people, this kind of relaxed approach is more appealing than traditional budgeting.
“It’s more of a dance with your numbers,” says Bari Tessler, author of “The Art of Money” and a financial therapist in Boulder, Colorado.
In fact, Tessler shies away from even using the word “budget,” which can feel “so rigid and diet-like, as if there’s a right and wrong way.”
Tessler prefers “money map.” That phrase, she says, evokes the idea that “this is something we get to craft on our own, based on what phase of life we’re in, who we’re caring for and what our numbers look like.”
She’s part of a growing group of money professionals who are embracing the popularity of this more intuitive approach.
“Regimented budgeting strategies aren’t for everyone,” says Said Israilov, a certified financial planner in San Francisco and co-founder of Israilov Financial.
An intuitive approach means “spending your money on what feels right while staying mindful about your needs and wants. It doesn’t prescribe any spending guidelines and instead lets people make decisions by relying on their inner voice,” he adds.
It’s you relying on your sense for sound spending, trusting yourself and (hopefully) stressing less. If you’d like to give intuitive budgeting a try, here are some guidelines to keep in mind:
Capture an approximate cash flow
Before moving to intuitive budgeting, Tessler suggests getting familiar with your basic expenses each month.
“The key to intuitive budgeting is to have a baseline — a sense of what your expenses are,” she says.
Tracking your expenses for a few months can help you decide if you are comfortable with your level of spending or want to dial it back in certain categories.
Intuitive budgeting is not “magical thinking” where you simply don’t pay attention and hope for the best, Tessler says.
Instead, it’s being fluid and understanding about your numbers.
“It’s not critiquing ourselves but learning from it and being compassionate as we’re figuring this out,” she says.
You may have to gather some information up front and jot down your recurring income and expenses to get a good baseline feel.
Listen to your gut
Intuitive budgeting “relies on a gut feeling,” Israilov says.
If you’re deciding whether or not to splurge on a big television, for example, Israilov suggests reflecting on whether or not it feels right instead of crunching numbers. For much of his client base — which he describes as millennial immigrants working in the tech sector — this intuitive approach makes sense, perhaps partly because they tend to be frugal.
This way isn’t for everybody, though.
“If you tend to overspend, it might not work for you,” he says.
And even if the intuitive approach does work for you, it still requires guardrails.
“At the end of each month, make it a habit to audit your bank statements and review major spending categories,” Israilov says.
That way, you can make adjustments as needed.
Find the right method
The key to finding a money management approach that works for you is to make sure you use one that fits your life, says Dana Miranda, author of “You Don’t Need a Budget.”
Personal finance advice is not “one-size-fits-all,” she says, and pretending the same money maxims apply to everyone can be damaging.
That’s why she encourages people to explore their own financial goals and spending patterns with an emphasis on figuring out what works best for them, versus following along with whatever a money expert or influencer advises.
That might mean using intuitive budgeting or some variation of it. If the approach you select doesn’t evoke a sense of stress or shame, it has a better chance of being sustainable, Miranda says.
It also has to work, meaning your gut instinct needs to keep you from spending more than you make.
If needed, bring in more structure
If the free-flow of intuitive budgeting feels chaotic, Tessler suggests turning to more traditional tools like envelope-based budgeting.
A budgeting app can work well for people who need structure, she adds.
Some life events — like buying a home, having a baby or retiring — may require more guardrails, Tessler says. Then, when the phase passes, you can return to a more intuitive approach.
“There are certain phases of life where we have to be more vigilant,” she says.
And there are others, such as during periods of stable income and expenses, where you can go with the flow.
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