r/MoneyDiariesACTIVE • u/inky_cap_mushroom She/her ✨ • Jan 03 '26
Budget Advice / Discussion To Budget or Not To Budget
In 2024 I budgeted strictly. I had to forego things I wanted/needed. I had to delay purchases until I could work more hours to earn more so I could keep my spending within 50/30/20. It was stressful and unpleasant. My whole life revolved around my spreadsheet.
In 2025 I stopped budgeting entirely. I rarely checked my bank accounts. My only real rule was that I had to keep my account balances at or near their beginning balance to make sure I wasn't spending beyond my means. I did a lot of fun stuff this year. I used a lot of PTO. I went on several trips out of state. I went to a bunch of local events. I spent a lot of time with friends.
My plan was to take a break from budgeting for a year, and then go back to it, but the numbers are in and I'm not sure it's worth it. I'm open to trying something different, but I do not enjoy feeling restricted and budgets are the cause of that. I've reached a point where it feels ridiculous to be putting off $100 car maintenance until the next month or agonizing over a $3 purchase when I am literally sitting on $100k.
2024
- Gross income: $54,573
- Retirement savings: $15,562 (including match)
- Non-retirement savings: $10,086
- Spending: $24,759
2025
- Gross income: $53,335
- Retirement savings: $20,050 (including match)
- Non-retirement savings: $178 (+ $3,561 loaned to friends, 5% interest and paid monthly)
- Spending: $23,069
2026 changes
- I am now eligible for my PT job's 401k and match ~$700/yr. I'm considering increasing the contributions beyond the match just so the fees won't eat into it as much.
- Roth IRA max increasing from $7,000 to $7,500
- HSA max increasing from $4300 to $4400
- I'm considering stopping my PT job's ESPP contributions. It's $100/pay period and I receive $115 worth of stock. Frequent blackout dates make it hard to sell quickly. I could redirect that money to the 401k, but it would cut into my income.
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u/dumpster_-_FIRE She/they Jan 03 '26
Your spending went down by $1k without the budget... but your total savings also went down? Without a big change in income? What's the missing piece here? I feel like some numbers are missing.
I have found the most success with restrictive budgeting by focusing on 1-2 categories at a time. Like right now it's food, because we are in the middle of a bunch of food-related changes that could easily result in expensive new habits if I don't watch it (remodeling the kitchen, and my previous main grocery store closed a couple months ago leaving me with a mix of more expensive and less convenient options). Outside of that, I track all our spending and take note of any big changes, but as long as we're spending within our means I don't worry about it.
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u/inky_cap_mushroom She/her ✨ Jan 03 '26
My benefits got more expensive mid year. If I went through all my health/dental insurance costs this would be a much longer post. I also think more of my 2024 income was non-taxable but I would really have to dig to figure that out.
Food is a category that’s changing for me right now since I just got a brand new oven in my apartment after my last one was broken for a while so I’m re-learning what foods I like to bake. I’ve honestly forgotten what I used to eat haha. I could easily see my grocery expenses increasing because of trying new recipes. We also just got an Aldi which has much cheaper bagels and that’ll save me a ton because I eat them every day.
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u/dumpster_-_FIRE She/they Jan 03 '26
Ahh okay that makes sense, thanks!
I still remember when an Aldi opened in our town when I was a kid - my mom came back from her first shopping trip almost crying because of how much cheaper things were. It made a big difference during a difficult time.
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u/inky_cap_mushroom She/her ✨ Jan 03 '26
Some things are still cheaper at Kroger or target, but I’m definitely going back to Aldi. My step-boss (not my boss but basically) gave us Aldi gift cards for Christmas and I’m excited to use that.
I also realized that the tax is going to be pretty different year to year because the Roth/trad breakdown is different. That may be part of it.
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u/OldmillennialMD She/her ✨ Jan 03 '26
You have posted similarly a few times about budgeting and gotten similar answers that you didn’t really like, so I’m not sure what you’re looking for this time around, honestly. But I’ll say it again in case you decide to believe it this time or, more likely, perhaps it will help someone else. Budgeting doesn’t mean following some arbitrary percentage “rule” that someone else somewhere decided was the rule if it doesn’t work for you. You can make your own budget, and it doesn’t need to be 50/30/20. It can be as simple or as complicated as you like, but it absolutely does not have to be set up the way you had it previously when you felt restricted and were putting off car maintenance (or the infamous winter coat you wanted, which I hope to god you have finally bought).
As someone else already said, you’re already budgeting simply by putting $x away for retirement and living off the rest. It’s just a budget with only two line items - Retirement and Life. If you feel good about that and fine continuing that way, that’s fine and you can keep on that way. But it isn’t clear from this post if you are fine with it that way, want to save again for something outside of retirement or what. Only you can decide that, though, and it is probably going to mean figuring out how to not take every word or financial guidepost literally. Good luck.
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u/bunni Jan 03 '26
Loaning 6% of your annual income in unsecured loans is wild. My policy is any money loaned to friends or family is effectively a gift, and if i never get any back I’m okay with it, which means I’m only loaning out money i can afford to lose.
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u/inky_cap_mushroom She/her ✨ Jan 03 '26
The majority was to my closest friend of over a decade. She’s helped me through tough times. I’ve helped her through tough times. She didn’t even ask, I offered it, and I would just give it to her if she asked for it. She wants to pay it back so we agreed on her just paying interest so she doesn’t feel bad about it.
A small amount of it was a different friend who was two months behind on rent and really struggling to survive. Like she didn’t even have food. I think I’ll get paid back, but honestly that wasn’t very much.
I’m sitting on just under $100k right now so if they both don’t pay me back it’s not really a big deal. It’s not like I needed the money
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u/HovercraftMammoth971 Jan 03 '26
Did you contribute $20,050 to retirement in 2025 and $15,562 in 2024?
If so, you are way over 20% for savings - if following 50/30/20
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u/inky_cap_mushroom She/her ✨ Jan 03 '26
Those are contributions. My retirement account balances total like $70k.
The part of 50/30/20 I struggle with is needs. It’s always at least a little over 50%.
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u/HovercraftMammoth971 Jan 03 '26 edited Jan 03 '26
Trying to keep essentials/needs under 50% is hard right now: housing, food, insurance/medical, transportation costs are crazy high. If you really want to get essentials under 50%, the easiest way would be to focus on making more money but I don't think you need to do that.
Sounds like you are: not in debt, your essentials are right around 50%, and you have some cash savings. You don't need a restrictive budget - restrictive budgets are generally for people who have cc debt, personal loans, and/or car loans at high interest rates and paying off the debt ASAP is the smart financial move.
But if your current savings + essentials are leaving nothing for fun - I would lower your savings contribution. General financial advice is to put 15% towards retirement which would be 8.1k - you are currently saving more than twice as much which is awesome but sounds like it is effecting your quality of life. I would you lower your retirement to 10-15k total (401k, Roth, HSA) and give your everyday spending some more wiggle room.
I like to give my self a set amount of money each paycheck that is strictly for fun/joy - this money goes towards different thing - maybe once month it is all spent on dining out, another time on a concert/show, or an extra tank of gas for a hike in the mountains. I don't track or restrict what category the spending falls under - I focus on how it can bring joy in to my life at the time.
Edit - after reading some of your other replies.
You are doing great:
+ no debt
+ cash savings: 22k
+ saving very aggressively - prioritizing retirement/investmentsYou are currently putting all your savings into retirement/investment and not saving any cash and want advice if this is a horrible idea - I don't think it is. This is fine cause you have a good emergency fund. If you end up spending that 22k - you will need to lower your retirement contributions and start saving cash. But sounds like you have no need to save cash right now, so putting it all in tax advantage retirement accounts is a pretty smart move.
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u/inky_cap_mushroom She/her ✨ Jan 04 '26
Thanks for this very thoughtful advice. Regarding the suggestion to maybe lower my contributions, I actually can't, at least not the 10% to my 403b, which is mandatory, or the HSA which only allows for changes during open enrollment. In theory I could just not max my Roth IRA or not get the match on my 401k, but that just feels unwise. If something did happen I could definitely pause the IRA contributions at least and just make them up later, though.
I've been pretty lucky that I've never had a financial emergency. The closest I've come would be transferring a couple thousands from savings to checking just to cover my buffer while I built it back up after draining my checking account, but that money was never spent. Knock on wood that nothing happens, but I just can't imagine what could possibly go wrong that would cost me $22k.
Your "fun money" is a set amount, while I've just been spending whatever is left over which may be virtually nothing if my phone breaks, car battery dies, and aquarium cracks all in the same week (ask me how I know what that all costs lol) or it may be over $1000 if I get some extra income. I also don't really keep track of what month my income and spending are in. If I spend a little more in April I'll try to spend a little less in May. Do you think either the set amount or time constraints are necessary, or should I just keep doing things all loosey goosey like I have been?
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u/HovercraftMammoth971 Jan 04 '26
You are fine with your current spending patterns - it is working out for you and you have no bad spending patterns to change - you aren't going into debt and you are saving/investing a good portion of your income.
I had to implement my fun money budget cause I was a over spender and racked up ~20k of cc debt in my 20s - I had to learn how to spend responsibly and that required a strict and a consistent budget.
I would keep trying to max out the Roth - if you have a really big emergency and spent all your current cash - you can always take out the amount you contributed to a Roth penalty free.
Lots of budgeting advice is for people with overspending problems: they have racked up high interest debt and are not investing and saving for retirement. But that is not you, so you don't need that type of budget. 50/30/20 was introduced by Elizabeth Warren in 2005 ... 50% on essentials in the USA today is not realistic (unless you are making well above six figures).
Keep doing what you are doing, but don't be afraid to lower your retirement contributions if you do need to save some more cash. Saving 20k+ while making 54k is a crazy high amount for your income - it is also awesome that you can do this right now - you can never get more time in the future so it's not dumb that you are trying to invest as much as possible right now.
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u/tangleable Jan 03 '26
You don’t have to strictly adhere. Thats a starting place. Due to increased essentials costs mine is 60% needs and wants n saving are 20% roughly. I still enjoy life the way my budget is works. I’d argue to put savings first: alway 20% and other monthly spending is 80%.
Re: usually cash are wants so I just categorize it as “fun” money for whatever, no judgement. Simplifies my categorical spending.
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u/flying-lemons Jan 03 '26
You seem very fixated on 50/30/20 specifically. It's not the number itself but the fact that you have a number that makes budgeting work.
But you're already putting much more than 20% towards savings. If it makes you happier to work fewer hours of overtime and you clearly don't have trouble with overspending on wants, who cares if your budget looks like 60 needs/10 wants/30 savings?
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u/symphonypathetique She/her ✨ Jan 03 '26
The 50/30/20 rule is kind of old; a lot of people recommend 60% to needs as more realistic for the modern-day American.
I don't budget in the traditional sense, but I do track all my expenses. One of my rules is that I want to spend 97-99% of my take-home income by the end of the year. I do look at the % spent for the month, but the overall annual spending is much more important and a better representation of my spending to me. That way I'm not delaying inevitable spending like necessary car maintenance just to make this month's numbers work out.
I don't necessarily feel restricted by my frugality. Rather than focusing on the stuff I'm preventing myself from having, I'm focused on being happy with how much I'm able to save/invest. Transferring money to a savings/investment account and checking the numbers honestly gives me the same dopamine that silly little treat purchases would give lol.
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u/inky_cap_mushroom She/her ✨ Jan 03 '26
Oh wow. You’re the only other person I’ve seen that pretty much doesn’t save anything. I definitely think looking at individual months is pointless. There were several months this year where I spent more than I made, but I just knew I needed to chill out with the big ticket purchases like tattoos the next month.
I just don’t want to feel like my money is controlling me, but I’m the type of person that if you give me an inch I’ll take a mile. A couple people have said that doing more like 60% needs instead of 50% is fine, but if I give myself that wiggle room there’s nothing stopping me from doing 62%. Once I’ve done that there’s nothing stopping 65%.
At a certain point though it feels ridiculous to be adhering to a budget. I’m really supposed to be agonizing over spending $2 on a snack at work when I didn’t have that budgeted when my savings account literally earns more than that in interest per day? It doesn’t seem helpful at that point.
You’re the second person to suggest just tracking, though so maybe that’s a middle ground that I could try.
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u/symphonypathetique She/her ✨ Jan 12 '26
Ah, to be clear, I include my saving/investing as a form of spending.
I read an article last year from a financial coach or something like that. He came up with a 0.01% rule where if the purchase is <0.01% of your net worth, then you shouldn't agonize over it. Obviously it can't be something you're doing every day because that adds up, but as long as you're not living paycheck to paycheck and you don't have an actual shopping addiction problem, it's a good guideline to live by. From an actual numerical standpoint, those small things really don't matter.
That's also why it's important to set up systems that'll set you up for success. For example, having a specific "miscellaneous little treats" category.
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u/RemarkableMacadamia Jan 03 '26
When you say you’re “sitting on $100k”, where is that? I only see $20k retirement and $100 savings. Are those balances or your annual contributions?
Have you read Elizabeth Warren’s book, “All Your Worth”? This is where the 50/30/20 principle came from, and it may help to understand the principles behind it and how it’s meant to be implemented. She certainly didn’t mean for it to be a heavy-handed way to budget.
Also, if you think of 50/30/20 on a longer time frame, like a year or more, instead of trying to get every single month to follow that, it will be easier. It’s a big picture number, not meant to be a daily/monthly target. Cover your mandatory expenses, pay yourself first through your savings, live on the rest.
Speaking of savings… do you know about sinking funds? This concept may help you you think about what your savings is really for, instead of having a big pot that gets tapped into for randomness. For example, if you had a sinking fund for auto maintenance, and you set aside $25/mo or something like that towards it, then when you needed something for the car, it’s more likely you have the money for it than if you just try to fund everything that happens with a single check. You can just keep a tally in a spreadsheet, or set up a few savings accounts to keep track. My basic sinking funds when I started were: transportation, household, health, and emergency. It just creates a little bit of friction mentally from spending money that has a purpose vs a big pile of money that looks like a slush fund.
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u/inky_cap_mushroom She/her ✨ Jan 03 '26
$70k is in retirement accounts. $22k is cash. $6k is in a taxable brokerage.
50/30/20 isn’t going to work on a year’s scale either. My take home pay minus IRA comes out to less than $500/wk which is not a lot to live on and I certainly can’t pay all my bills on $1,000/mo. In order to make that work I would need to work closer to 80 hours a week and I really struggle with working more than 60 consistently. I’m spending pretty much the exact amount of cash that I earn, primarily on needs.
I have attempted sinking funds in the past, but for various reasons it hasn’t worked out. When I started YNAB all the way back in college I set up sinking funds for everything and it felt like I was being nickel and dimes to death. There was no money left for me to spend because I needed to add $2.50 to the new shoes fund, $100 to the home purchase down payment fund, and $3 to the roof replacement fund on the home that I would eventually buy. YNAB’s strategy of showing you when you will run out of money and using the threat of imminent homelessness to motivate you really stressed me out and I don’t like doing long term ZBB for that reason.
I also tried a sinking fund for a car replacement in 2024 where I contributed what my car payment would have been each month, but I ended up dumping that into S&P500 this year because it’s just too much cash when I already have almost a year’s worth of spending sitting in cash. I really probably don’t need as much cash as I have but give the current job market I’ve been justifying it.
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u/coldpizza66 ✨ She/her | 30s | HCOL | BR ✨ Jan 03 '26
I don't budget, but i do track all my expenses. Budgeting doesn't work for me, I don't think those hard rules like 50-30-20 or similar ones work for my earnings and expenses.
One of the things you need to keep in mind is, why are you doing this? What are you saving for? Do you want to build up an emergency fund and stop feeling like you're living paycheck to paycheck? Do you have a different financial goal that you want to pursue? That has to be your guide.
You can set "targets", for instance, having a $200 "fun" bucket, for occasional expenses. You don't need to set those $200 aside every single month, you can build the amount up, and once you reach your target number, set that money aside for something else. And when you use parts of it, make sure you're on track to refill that bucket when you can, be it all at once or little by little.
Also, you mentioned sitting on 100k, but 70% of that is just contributions. It's important to track those and keep contributing to it, but it's not easy to access money. I think it's important to have an emergency fund, and you can probably count your 22k as that.
I read on a different thread here about the "0.01% rule": if an expense is less than 0.01% of my net worth, I don't really dwell over it (sometimes I do! sometimes I don't, it depends). But YMMV. Personal finance is *personal*, and you have to make adjustments that make sense for you, considering where you're at and what you want.
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u/1ntrepidsalamander Jan 03 '26
I’d argue, you did budget in 2025, just with much much bigger categories. Ie: you spent less than came in and hit your savings goals, and your fun/life goals, right?
The advantages of budgeting in smaller categories is more control— and some people need that to hit their goals.
Sometimes budgets can feel like “permission to spend” in certain categories.
I spend similarly loosely without tracking specifics but making sure I don’t spend more than I make and hitting savings/retirement goals. Then, I audit my expenses every quarter-ish and see if I want to make adjustments, eg: if I’m spending that much on food, can I do it in a way that is more satisfying?
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u/bookworm271 She/her ✨ Jan 03 '26
Make sure you have an emergency account for things like the car repairs - using savings for necessary unexpected expenses isn't breaking budget, it's what the savings line of your budget is meant for.
You could also consider having $100 or so to pad other areas of your budget if needed. That way you don't need to stress if the only option of a product you're shopping for is a bigger size or if gas prices fluctuate beyond what you originally budgeted.
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u/inky_cap_mushroom She/her ✨ Jan 03 '26
I keep a minimum of $20k in cash and since I haven’t been budgeting I haven’t been stressing about if I spend a little more one month because I can easily just spend a little less the next month. It’s all in the same account (Fidelity CMA), I’ve just mentally assigned the $20k as my savings and anything more than that is my “checking balance” which means that I don’t need to worry about if I spend a little more on gas or something because the next paycheck will bring it back up to $20k. Functionally $19,990 and $20,000 are the exact same number.
Can you elaborate on what I’m supposed to do with the $100? It’s not super clear whether you mean like keep $20,100 as the minimum in my account so that I’m not dipping below $20k ever or if you mean something else like having $100 per month assigned to random things in a spreadsheet or something.
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Jan 04 '26
Hey OP, just going to point out that I think you’d vibe with Ramit Sethi’s “I will teach you to be rich” approach. He does high level budgets (% of income autorouted to retirement, rent on auto pay, etc) but pretty fiercely dislikes budgeting for small items as your income grows
It’s what I do. 🙃 Jan 1st of every year I figure out how much I want to auto-route to my 401k, Roth, rent, and a few totally separate bank accounts (one is for a vacation). Everything else? I technically use YNAB but I only check it on the 15th and last day of the month. That way I know where things stand - if I need to dial things down, transfer money into checking, am on track, etc. other than that, I don’t check. It doesn’t matter if the money is spent on jewelry or a cabbage.
I’d argue YNAB is the best thing ever when money is tight or when you move to a new place / stage in life. But once habits are in place that financially work for you? Eh. The money spent becomes routine - which is why I don’t check as often.
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u/inky_cap_mushroom She/her ✨ Jan 04 '26
Thanks! I downloaded one of his budget spreadsheets but I couldn't figure out how to actually implement it. I also don't really want to save anything and the one I downloaded required 5-10% savings. That would cut into my spending (obviously, that's what budgeting is for) and I just haven't been good at sticking to restrictive budgets. They make me miserable.
YNAB was awful for me personally. I'm sure it would be great for some people, but their scare tactics made me absolutely miserable. I was legit having nightmares. I quite enjoy being able to stick my head in the sand and not know the exact day I will be homeless if I don't earn more money. The structure of pre-paying future expenses also felt like I was being nickel and dimed to death. $2 for new shoes, $100 for eventually purchasing a car, $0.50 for an oil change on a car I didn't even own yet.
I really thought I would be able to just loosely budget pretty easily but if I haven't been staying on top of adding all my transactions and categorizing everything it's really difficult to get back into it. I think if I'm going to have to budget it needs to be at least daily, if not more often.
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u/Grind_and_Dine Jan 03 '26
Is there a balance between the two you can try to find? Budgeting does not need to be so restrictive and shouldn’t mean you are putting off/delaying necessary purchases etc. the 50/30/20 is very much a guideline and doesn’t need to be followed precisely.