How We Paid Off Six Figure Debt Without a Budget


A famous quote by Tony Robbins says, “complexity is the enemy of execution”. We can all think of an example of where this has been true in our lives. Take exercise for example. Everyone has an opinion on the best workout routine. Some experts say cardio, others weight training, then there’s yoga, and cross fit, and on and on. Before even getting started there’s so much information that many don’t even start. Can the same level of simplicity also allow you to pay off debt or invest without a budget?

Humans are really good at making things more complicated than needed. The book, “The One Thing” by Gary Keller tells us to ask ourselves one simple question. “What’s the ONE thing I can do such that by doing it everything else will be easier or unnecessary?” I find myself asking this question in many different aspects of my life, including personal finance.

Read through most personal finance blogs and many will say that budgeting is an essential part of any financial game plan. I agree that some people need a budget to stay disciplined. With that being said, budgets can be complex for simple-minded people like me. I’d much rather save my brain space for more interesting things than trying to plan out if I need a haircut that month.

Paying Off Debt Without a Budget

There are times when you will need a strict budget, at least for a while. If you are living paycheck-to-paycheck with no savings and a lot consumer debt, then you are going to have to be more precise. In this situation, every dollar really does matter until you can build up some savings and pay down debt. If this sounds like you, then you’ll need to budget at first.

When You Don’t Have to Budget

Throughout our debt pay off journey we never had a budget. In the Dave Ramsey world this is considered blasphemy. Even without a budget we were able to pay off $200,000 in debt in seven years. Now, I’ll fully admit that if we did have a budget it may have helped us stay more focused. Of course, that would be dependent on if we actually stuck with it.

Knowing our tendencies, there’s a good chance we would have become frustrated with the constricting nature of a budget. I didn’t want to keep receipts, write down every charge, and feel guilty about buying the $5 frozen lemonade when I’m at the zoo with the family. I’m also not sure how good it would have been for our marriage if I was nit-picking every purchase made by my wife (and vice-versa).

The Alternative

If you are in a situation where you do have some disposable income to save, invest, or paydown debt, then you may be able to simply the way you manage your finances every month. The best name I’ve heard for this method is the “anti-budget” with credit given to Paula Pant at

Below is a step-by-step approach if you decide to go this route:

Step 1: Track Your Spending 

Wait, what? Isn’t this just budgeting? Well, kind of. Here’s the thing, you have to set a baseline when you’re starting out. Track your spending for a month or two. Don’t judge yourself or even do anything differently than in past months. Just write it all down. Having a baseline will allow you to determine the current gap between income and spending so you can develop a plan.

Step 2: Automate Your Payments

Now that you’ve tracked spending for a month or two, it’s now time to set up your automated payments. This will be the key to success if you use this approach. First determine how much you plan to save or invest every month. Pull this money immediately out of your primary checking account and move it to a savings or brokerage account. Even better, see if your employer will allow you to deposit money directly into a different account. This is called paying yourself first.

After paying yourself first, it’s now time to automate your bills. I know there are a lot of them. Heating, cooling, water, sewer, insurance, phone, internet, day care, groceries, gasoline and on and on and on. Where you can, automate payments to immediately pay bills as soon as you are paid. This may take a few months to sort out. Sometimes you can call and negotiate your payment dates.

For bills that don’t cleanly fall on the date you get paid, you can hold back and wait until the next pay day to make the payment. For expenses that don’t have a clear pay date such as groceries, consider taking the money out of your account immediately and putting in an envelope. We generally used this approach for any monthly expenses of $100 or more.

The key here is to get any regular expenses out of your bank account as soon as possible.

Step 3: Spend the rest

Again, many individuals do not have the luxury of saving/investing, then paying bills, and then having extra spending money. This method is going to require that you have a gap in you income and spending. When you first start out, you may not have much if anything in the “saving/investing” or “spend the rest” category. However, as you pay down debt, reduce expenses, or increase your income there is opportunity for extra money here.

As our family’s income has increased we have put 80-90 percent towards out debt payments and 10-20 percent towards “spending the rest” (otherwise knowns as lifestyle inflation). To build wealth you have to continually look for opportunities to save more than you earn, and eventually invest the difference.

This then gives us the freedom to spend the remaining money on whatever we want, guilt free. After a few days of getting paid we usually know exactly how much we have left to spend on everything else including outings with the kids, trips to the hardware store, convenient store purchases, and a variety of other smaller purchases. In many people’s budgets this is referred to as fun money, we’re just getting to the number in a different way.

Paying Off Debt Without a Budget

We used the anti-budget approach over the last seven years to pay off all of our debt, including the mortgage. I’m not suggesting that this approach will work for everyone. In fact, given the depressing statistics regarding the number of individuals who live paycheck-to-paycheck, this approach may not work for most.

For others, simplicity may keep you in the game for longer. If you are struggling with the complexity of a budget, consider paying yourself first and then automating your bills and other expenses.

We realized early that budgeting wasn’t for us. It felt too constricting and we didn’t want to feel guilty every time we decided to go out to eat, got a haircut, or made an small impulse purchase. As long as we had money in our account after paying ourselves and expenses, we should be able to spend the rest guilt free even without a budget.


    1. Glad I’m not the only one! Do you pull money out for savings right away or wait to see what’s left at the end?

  1. Micro managing finances can be counterproductive. It doesn’t take an actuary to find out if more money is going out the door than coming in. Congratulations on paying off the debt and you’re one step closer to financial freedom 🙂

    1. Thanks and I agree. Some need the micromanaging to be successful. Others are turned off by it. I just like simplicity and have found an approach that seems to work for us.

  2. Have you ever considered using to help track your spending? I use the site and it’s very helpful to understand were my money is going each month.

    1. I have thought about it, but there’s something that makes me uneasy about sharing so much personal information with one site. I already use e-banking and many other apps so it’s probably not much different, but I don’t like giving access to my banking and credit card accounts. Just a personal preference.

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