Funded
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Funded

Break-up with budgeting in 2020

A new way to think about your money and feel good about it

For years we’ve been taught to budget, to be frugal, and spend conservatively. We’ve never questioned it, and it has led to the stifling of important money conversations. Instead of budgeting or being frugal, we’re now too embarrassed about our spending to have honest conversations about it.

Turns out, people who have a median salary don’t need to budget, all we need to do was manage our money to feel empowered about every purchase we make. What’s the difference between budgeting and managing? It’s quite simple if you think about it — budgeting as we traditionally see it in the media or on popular apps is constant policing of spending and purchases by category. It involves collection or logging and reporting of data, a periodical analysis of spending with the occasional unsolicited recommendation to cut down on a certain category/habit.

Managing your finances is quite different — it’s understanding where your biggest expenses and obligations are, and prioritizing wants to ensure those are taken care of before you spend on everything else. Managing your finances provides the freedom to spend your money however you see fit regardless of category.

The philosophy has many variations and names: envelope budgeting, 50/30/20 rule, needs-and-wants-based, and the list goes on. But boils down to something quite simple.

(Fair warning: expect round numbers because I hate math)

Let’s assume you get paid $1,500 every paycheck and you get paid twice a month.

Now let’s break that amount up to account for some important obligations

And now let’s set up some goals e.g. a trip to Hawaii in April that’s going to cost ~$1,200

Finally, building up a rainy day fund by setting aside money without a total amount in mind.

So what does this mean? Though it’s a fairly short list, it’s a lot to compute and keep track of. So here’s the “math”

So you have $835 every paycheck, or $1,670/month to spend on whatever you like. Oat milk lattes? Sure! An unplanned Sephora haul? Sure! Just make sure you stay under that $1,670 mark. No need to worry about the categroy-shaming for Uber rides crosstown or going over on your Eating Out budget. That’s because everything you need to pay for is already accounted for 💰

Simple, isn’t it? Of course, you can add more items or ignore the ones that don’t apply to your situation.

One thing is for sure — there’s no need to move all your money to a special online-only bank and move your spending off those high cashback credit cards. In fact, spending on those credit cards may get you a few hundred dollars every few months now that you spend freely on the things you could always afford.

Adopting this philosophy has been life-changing for me, not having to feel the shame or embarrassment when I spend my money, and working towards goals that I care about — this philosophy helped me afford to travel to 4 countries in one year, pay for my gym subscription, achieve smaller goals like a wardrobe upgrade for my new job, getting myself a new iPhone, and enjoy some impromptu splurges too.

I’m a product designer so when I was designing Funded, I wanted to make sure it wasn’t just another budgeting app chasing down every penny. We built Funded with a few core principles that we believe strongly in:

  • Provide a unified overview of finances
  • Empower users to spend their money with confidence
  • Treat users like adults (no shaming, no red alerts, no judgment)

Funded is a simple anti-budgeting app that helps you manage your finances so you can feel confident about their purchases knowing all your obligations are taken care of. Try it out today and start spending your money!

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