Unbudgeting for Millennials

Jake Fuentes, CEO, Level Money

May 6, 2014

Let’s admit it: we, as Milllenials, don’t budget. We don’t, and we don’t want to. While we may be well-intentioned about creating budgets and sticking to them, 83% of us don’t actively use any system to manage money.  For most, the concept of money management means occasionally checking our bank account balances on ATM receipts, then doing some mental calculations to figure out how much money we actually have. 

But this “mental math” approach isn’t working for a lot of us, and there’s a simple reason for that. We live in a world where spending money is as effortless as getting into and out of an Uber cab or clicking purchase on Amazon. Spending money has gotten easier. Trying to keep mental track of how much we’ve spent has become more difficult.

Nobody budgets, and we need a new system to ensure we’re making the right decisions with our money.

But let’s approach it differently than our parents did in the past. The essential purpose of managing money is to be able to do what makes us happy but still set aside money for a rainy day. Tracking spending in categories like entertainment, food, shopping and groceries are generally not the way we think, so let’s get rid of those and start with basics.

A simplified system has three categories of total spending:

Things we must pay like rent/mortgage, utilities, or other items.

Think of this as an investment in “happiness later”.

This is the amount available “for the now”, also known as discretionary spending.

The spendable category generally breaks down into three sub-categories:

  •  Sorta Have-To’s: gas, groceries, diapers, new socks because your old ones have holes in them. Things you expect to happen but you have some control over how much they cost.
  •  “Ugh” Spending: car repair, parking tickets, medical bills, stuff that may or may not be expected but that does not bring you any joy.
  •  Happy Spending: Starbucks (for some people), weekend trips, a date with your significant other, that new book you’ve wanted to read. This is investing in yourself or someone else.

The lines between Spendable categories often get blurred, and that’s ok. The point in this “unbudgeting” system is to get the maximum amount of Happy Spending possible, while making sure that Total Spending stays at or below your monthly income.


  • Am I saving the right amount each month so I can ensure happiness later?
  • How can I anticipate the “Ugh” Spending so that I’m not blindsided by it?
  • Can I eliminate or lower a bill to increase Spendable?

Achieving financial balance means finding a place where you can do what you enjoy today without stressing about tomorrow and balancing the have-to’s with the want-to’s. Budgeting isn’t a difficult burden if we think about it the right way and are informed by the right information.

Happy Unbudgeting!

The views of the authors of these articles do not necessarily represent the views of First Republic Bank.