What’s the difference between budgeting versus spending awareness? I want to start this off by acknowledging that many people have to budget. The majority of people in this country live paycheck to paycheck, and the consequences of them not budgeting are so severe they can’t imagine a world where they don’t budget. 

On the flip side, many people are so busy they don’t have time to budget. So many clients that walk through my doors don’t know how to budget, and they might not even know how much they’re spending on a monthly basis! 

If you can relate, keep reading because I want to give you some tools to help you on your budgeting journey (and if you want a concrete way to start budgeting, check out my BudgetingBlocks™).

Simplifying your budget

If you’re busy with work, life, or other things and you feel like you don’t have the time to sit down and budget, let’s talk about simplifying your budgeting life! 

First, we want to build an awareness of where your money is going. And when you know where it’s going, ask yourself: Is that aligned with the values you have in life and for your money? 

But you don’t have to do this by creating a line by line budget. That’s not simplifying budgeting! Instead, I like to have clients put their spending into categories. This gives you a broad idea of where your money is going and a high-level overview of whether or not you’re spending in the right places. 

The phases of financial life

Everyone has two phases in their financial life — an accumulation phase and a de-cumulation phase. Of course, that’s simplifying it to the extreme, as you’ll both accumulate and lose money throughout your life. But for the most part, we’re accumulating money before retirement, and we’re de-cumulating it once we’ve retired. 


In this phase, you’ll still be spending money. You might even be in a little bit of debt, if you have a mortgage, for example. 

But in this phase, your overall net worth will continue to increase. Your house value increases, you invest in stocks that begin to accrue interest, and you build more wealth through promotions at work. 


Now, you’ve retired. You worked hard your entire life to build wealth and give yourself a comfortable retirement, and now you can finally enjoy it! Your net worth is decreasing each year, but you’re taking advantage of all the money you saved. 

Budgeting for each stage

The way we budget is going to shift depending on which stage of life a person is in. When someone’s in the accumulation phase, the biggest thing I look at is how much money they’re saving.

For example, if my clients want to max out their 401k each year, it’s important to consistently track it and make sure they’re meeting that goal each year. 

Really, it all comes down to the bottom line: are you saving and investing money in alignment with both your income and your overall financial plan. 

Pro tip: when you get a bonus or additional unexpected money (like a raise), it’s really great to put half of that money into your savings and investments! 

Now, when a client is in the de-cumulation phase, they won’t be saving money anymore. Instead, budgeting is going to be based on how much they’re withdrawing every single month. 

The key numbers we look at are how much your portfolio decreases each year. Sometimes, clients can live off of their interest, so the base value of their portfolio remains relatively stable. 

All in all, whichever phase of life you’re in, if you’re trying to start a budget, the most important thing you can do is look at how much you need to live off of and then how much you’re able to save each month. Focus on your savings and investing rates… and everything else will fall into place. 


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