Speaker 1: Welcome back to the Net Worth Podcast.
This week we are diving into the anti budget system, a low effort approach to saving and spending that works even if you hate spreadsheets.
You know, traditional budgets are frankly just exhausting.
They demand that you micromanage every single dollar, every single one down to the pack of gum.
And it all relies on constant tracking and pure willpower, which for most of us is why they fail.
They’re designed to fail, right?
So the anti budget, it flips that script completely.
The whole promise which we’re pulling from this edition of your Wealth Blueprint is pretty simple.
You automate the important stuff first, your savings, your investments, and then you have guilt free permission to spend whatever is left.
Speaker 2: That’s the core idea and it’s so powerful because it shifts your focus. You’re not anxious about what you already spent. You’re confident about what you’re funding for the future.
Our mission in this deep dive is really to pull out the key takeaways from this edition and look at how that mindset change moving from perfect stressful tracking to just reliable automation, how that really transforms your wealth building and of course your net worth.
Speaker 1: Check out the full edition on our website wearenoyack.com. So let’s unpack that core problem.
Classic budgets. They just collapse the second you forget to log a coffee.
This edition argues that the problem isn’t your lack of discipline, it’s the tool itself. It’s the cognitive load of making what, 100 tiny decisions? A word about what you can afford.
You just get tired and quit.
Speaker 2: It’s decision fatigue. Exactly.
And the anti budget just gets rid of all that noise.
The whole concept is you take the decision making out of your daily life.
You decide one time on payday, where your money’s going, that’s it.
You pay yourself first automatically, and then you spend the rest without shame.
It’s that one big decision that beats 100 little mini decisions every time you pull out your card.
Speaker 1: That feels like a monumental shift.
You’re not looking backward at your behavior.
You’re guaranteeing a future outcome.
So instead of feeling that you know familiar guilt about a latte.
You can be confident because your retirement and your savings are already handled for the month.
It’s moving from after the fact cuts to making those big, impactful decisions before the money even really feels like yours.
Before it hits your main account.
Right?
And that’s where the net worth implication gets really critical.
We call it guarding the top of the funnel.
You set up your transfer, so the second your income arrives, a chunk of it just immediately flows out into your investment and savings accounts.
Net worth progress becomes the default setting.
It becomes the default.
It’s not something you have to struggle to choose every single day.
Speaker 2: OK, So if regarding the top of the funnel, how do we actually structure that?
Speaker 1: This edition breaks it down into the five buckets.
It calls them the set it and forget it buckets, right?
And it’s key to remember these are just guidelines.
You absolutely have to tweak the percentages for your own life, but we can basically split them into two themes.
You’ve got your today’s needs and then your tomorrow’s security.
OK, let’s start with today.
So bucket one: Essentials. This is your main checking account.
It’s for your fixed costs, rent, utilities, insurance, you know, minimum loan payments and also realistic guests for groceries and gas.
And bucket 2 is freedom or what I call the fun money.
Speaker 2: Exactly the fun money.
Discretionary spending.
This is dining out, hobbies, travel.
And the article calls this a necessary pressure valve, which I love.
Speaker 1: Yeah, if you try to cut that to 0, the whole thing just breaks.
It’s not sustainable.
You have to fund fun on purpose.
Alright, so then we move to tomorrow’s security, which is really the net worth building part.
This is the engine.
So bucket three: Future you.
This is all about investing in long term assets.
We’re talking about your 401K, your IRA, maybe an HSA and any taxable brokerage accounts.
And this whole bucket has to be automated.
It has to be at the employer or brokerage level.
So the money skips your checking account entirely.
Speaker 2: That skipping step feels so important, but what about, you know, emergencies liquidity?
Speaker 1: That’s bucket four: your safety cushion.
This is your liquid buffer.
It’s your emergency fund that three to six months of expenses and also your short term sinking funds.
Speaker 2: Sinking funds.
Speaker 1: So for things like annual car service or holiday gifts exactly planned but not monthly costs.
This bucket is purely protective.
It stops you from going into debt when life, you know, happens.
And finally, bucket 5 is the debt kill bucket, if that applies to you, right, That’s for any extra principal payments you’re making on high interest debt like credit cards.
So for someone just starting out, what this edition calls the learner profile, it suggests some starter targets.
Speaker 2: It does.
We’re looking at roughly 50 to 60% for essentials, OK, then 10 to 20% for freedom.
A good 15 to 25% for future you, so you’re investing and then 5 to 10 for safety, at least until you hit that emergency fund goal or even at the start, you’re putting away 20, maybe even 35% of your income by default.
That’s guaranteed net worth progress right there.
Speaker 1: Let’s talk about actually setting this up.
The promise is a 45 minute setup, no spreadsheet.
Which I mean, sounds great, but maybe too simple.
Speaker 2: It’s simple because it focuses your energy only on the big structural things.
Speaker 1: Step 1.
You spend about 10 minutes just naming the goals, OK, so that’s like I want to invest 15% of my income or my emergency fund needs to be $15,000 exactly.
And listing any high APR debt you need to kill.
Then Step 2, the longest part is mapping payday automation.
This takes maybe 20 minutes.
This is where you actually do it.
This is where you execute, you go set up that your 401K contribution with your employer.
Then you log into your bank and you set up recurring transfers that fire the day after your payday.
Moving money to safety, to freedom, to your debt kill account.
And then the final step is to right size checking.
Speaker 2: Yes, whatever is left in your main checking account after all that automation is your guilt free spending money for the month.
It’s your relief.
And the article mentions adding gentle friction if you keep overspending that amount.
It’s a great behavioral hack.
You could use a separate debit card just for your freedom money preloaded with only that amount.
So when that card hits zero, you get an immediate signal, an instant signal.
You know you’re out of fund money long before you start dipping into your rent money.
Speaker 1: That makes a lot of sense.
But OK, let’s pivot to real life, which can be messy.
The system sounds perfect for a stable paycheck.
What about a freelancer or someone who’s commission based?
Speaker 2: That’s a fair challenge.
It does require one extra account, but the payoff is stability.
The solution is what this edition calls an income smoothing account.
Speaker 1: An income smoothing account, right?
So you first figure out a base paycheck for yourself equal to your worst case month, the absolute minimum you know you can make.
Okay, you automate all 5 buckets based on that number, and the extra income you earn in a good month goes straight into that smoothing account.
Then on the 1st of every month, you pay yourself that base amount from the smoothing account out into your main checking.
Speaker 2: I see.
So the smoothing account acts like a buffer.
It guarantees the buckets are funded even if you had a slow month.
Speaker 1: Exactly.
It creates predictability out of chaos.
And then once you’ve built up a decent buffer in there, you do a quarterly sweep.
Speaker 2: Sweep.
Speaker 1: Yeah.
Any surplus above your buffer gets split strategically 50% to future you, we’re investing 30% to safety and 20% to freedom.
You accelerate your growth in the good times without just blowing it all.
Let’s talk about high APR debt because that can be the biggest drag on anyone’s net worth.
Where does this edition draw the line between paying off debt versus investing?
Speaker 2: The hierarchy is very clear.
First, you always, always capture your employer match on retirement account.
That’s free money, 100% return.
You can’t beat it.
Speaker 1: You can’t.
Speaker 2: After that, you look at the interest rate.
If your APR on consumer debt is higher than say 8 or 9%, the advice is to prioritize debt kill aggressively.
Speaker 1: Why that 8 to 9% number?
Speaker 2: Because it’s historically close to the average return of the stock market.
A guaranteed 9% return for paying off debt is often better than a risky potential 9% from the market.
So you temporarily shrink your freedom bucket and you throw that cash at the debt until it’s gone.
Speaker 1: So you’re trading a little fun today for a guaranteed return and huge relief tomorrow.
Speaker 2: Precisely.
Now, if the APR is lower than that, you can do both invest and make extra payments.
But that high interest debt is a financial emergency and quickly.
On a related note, for couples, the system suggests 1 shared essentials account but two separate personal freedom accounts.
Speaker 1: That sounds like a genius way to avoid arguments.
Speaker 2: It is a critical psychological boundary.
It means neither of you has veto power over the other’s personal fund money.
As long as the big important buckets are already funded, the arguments over receipts just disappear.
Speaker 1: So once the system is up and running, the goal shifts to just light maintenance, right?
We’re not tracking lattes anymore?
Speaker 2: Absolutely not.
The focus is on making sure the automation worked, not policing your feelings about spending.
This edition suggests a 3 tier review.
Speaker 1: What’s the first tier?
Speaker 2: Weekly?
3 minutes tops.
You just glance at your checking and freedom balances.
Did the money move or the balance is OK?
You skim transactions for fraud, not for feelings.
Speaker 1: I like that.
Not for feelings.
OK what about monthly?
Speaker 2: Monthly is a 15 minute check in.
Confirm all the transfers ran.
If your checking has always got a surplus or worse, a shortfall, you just nudge the bucket percentages by 1 or 2%.
Speaker 1: So small adjustments, tiny adjustments,
Speaker 2: Yeah.
And maybe you check one other money lever, like getting a new insurance quote or cancelling a subscription you forgot about.
But the real power for growth comes from the quarterly review.
Speaker 1: That’s the key.
This is a 30 minute meeting with yourself.
It’s your moment for strategic wealth acceleration.
This is where you leverage new money.
Speaker 2: New money like a raise or a bonus?
Speaker 1: Exactly.
When you get a raise or a bonus, it shouldn’t just get absorbed into your spending.
You have to reclaim it immediately.
The recommendation is a split 50% straight to future you, half, half, then 25% to safety or your sinking funds and 25% to freedom.
This fights off lifestyle creep before it can even start.
Speaker 2: That’s powerful.
Instead of letting new money just inflate your lifestyle, you force it to accelerate your wealth.
And this is also the time when you’d bump up your retirement contribution by another 1% if you’re not at your target.
Speaker 1: The whole point is to make new income build your net worth by default and for those who are already heading their goals, this edition mentions some advanced upgrades.
We kind of touched on the rule of three investing, automating buys into say your 401K and HSA and a taxable account.
But the underlying philosophy?
Is what’s most important here and it is good enough is better than perfect.
The anti budget is designed to be forgiving.
If you overspend one month itself corrects on your next payday.
You don’t reset with guilt, you just reset with the next automatic transfer.
The foundation is stable so even if you have an off week your future is still being funded.
Speaker 2: So to wrap up.
The anti budget really works because it funds your future by default.
By default, it gets rid of the decision fatigue and it makes your net worth progress basically inevitable month after month.
That assurance is really the powerful take away here.
Knowing tomorrow is taken care of lets you live better today.
Speaker 1: So building on that, here’s a final thought for you to consider which season of life category whether it’s the high earning henry sprint, the family phase or maybe deleveraging.
Which one best describes your situation right now and how should that reality inform your personal percentage targets for your future you and safety buckets.
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