Not budgeting his money is one part of a seven-step strategy Sabatier created to achieve financial independence .
This makes budgets one of the main reasons why some people have a hard time managing money , he said.
"Budgeting is a lot like dieting: the more guilt you feel, the less likely you are to stick with it," Sabatier wrote. "You think, 'Well I've blown it,' or 'This isn't working,' and give up. Or eventually you start to feel deprived, like you have to cut back on every indulgence in order to stick to your blasted budget, and you become frustrated or bitter.
"Instead of becoming a tool for empowerment by encouraging you to be smart about your money, the budget becomes a source of anxiety and stress," he said.
Maintaining a budget becomes too much of a burden, Sabatier added, by putting "too granular a focus on small purchases, which in the grand scheme of things, don't have that great an impact on how much money you have."
Cutting back on small expenses won't save you the most money, but controlling the biggest expenses housing, transportation, and food will increase your savings rate by at least 25%, he said.
This can be done without a formal budget and with a few changes, like moving to a smaller apartment, walking to work, and cooking at home. Together these changes could even double your savings rate, Sabatier said.
Just look at Kyle Stimpson , who socked away 30% to 40% of his post-tax income for three years by living in a small, non-renovated bedroom in a walk-up, taking public transportation, and shopping local and making meals at home. Ultimately, these moves helped him save $80,000, a fourth of which he put toward a mini-retirement .
The average American household spent $57,311 in 2016, according to the US Bureau of Labor Statistics $35,138 of that was on housing, transportation, and food. If they cut that $35,138 in half, they could save $17,500 a year, or $1,458 per month, according to Sabatier. If they keep it up for for the next 20 years at a compounding rate of 7%, it will grow to $835,143, he said.
If you think that not abiding by a budget sounds risky, consider this finding by John of personal-finance blog ESI Money , who studied self-made millionaires for a few years: many of the millionaires he interviewed didn't have a budget .
"The reasons millionaires don't need a budget makes sense they make a lot and have self-control," he wrote in a blog post . "In other words, they make a ton, spend only a portion of it, and have plenty left over. Who needs a budget?"
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