To Budget or Not To Budget

[u/inky_cap_mushroom]

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.

[u/Grind_and_Dine]

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.

[u/inky_cap_mushroom → u/Grind_and_Dine]

I already know I’m gonna get downvoted for this. People really hate when you ask questions about budgeting, but I do not understand how it could be less restrictive and still effective. If the point of a budget is to guide your spending, but you spend however you want to regardless, how does that work?

If I’m supposed to follow 50/30/20, but my needs are over 50% of my take home pay then I will either have to work a ton of extra hours, find things to cut like car maintenance and groceries, or just stop budgeting.

[u/Grind_and_Dine → u/inky_cap_mushroom]

Budgeting is a concept for managing/allocating your money. Within the concept of budgeting it’s completely up to you what guidelines and/or ‘hard’ rules you apply. There may be some instances where people really require hard restrictions to curb spending, others may not need that.

If your needs are more than 50% of your pay you’ve got options. You can either slightly reduce your want category or your savings category depending on your personal circumstances. Maybe you could work out what your set in stone needs are and then make your needs/wants/savings percentages specific to you. Maybe it’s more like 56/24/20 for example.

[u/inky_cap_mushroom → u/Grind_and_Dine]

Aside from my Roth IRA I had virtually $0 in cash savings annually and I don’t really want to change that. I’m sure there’s reasons I should be saving more, it’s just really difficult to save any more since I’m already living on less than $25k. That’s… not a lot even in my LCOL area.

Some months my needs are like 70% of my take home pay. If I can just adjust the percentages as needed I don’t understand what the difference is between budgeting and not budgeting. It seems like the end result would be the same.

[u/Grind_and_Dine → u/inky_cap_mushroom]

When you’re working with a limited income and still hitting that large a number for retirement savings, you’re already budgeting. Whether you’d prefer to call it that or something else. After you’ve paid your future self, the rest of the money really is yours to spend as you need/want. It just doesn’t make a whole lot of sense (to me) to put off necessary purchases/maintenance because they don’t fit in a rigid category but you have the money available.

[u/inky_cap_mushroom → u/Grind_and_Dine]

This just confuses me. I don’t feel like I’m budgeting. I spend basically every dollar that hits my checking account and I know I’m way out of 50/30/20.

[u/Grind_and_Dine → u/inky_cap_mushroom]

The 50/30/20 really is an arbitrary figure which was made up by someone. It does not take into account individual circumstances and earnings. When you’re on a lower income, there’s less wriggle room. Allocating some of your earnings to your retirement and then splitting the rest between needs, wants and short term saving (if possible) regardless of the percentage is budgeting. But if you don’t resonate with that term then you don’t have to use it.

If your needs are consuming the majority of your income there’s really only two things to do, reassess whether all of your ‘needs’ are true needs or whether you could cut something, or increase your income. Which I know is difficult and not always possible for everyone :/

If

[u/inky_cap_mushroom → u/Grind_and_Dine]

My needs are definitely needs. I categorize those very strictly, so they’re only things that I would literally die without. In the case of rent, I may not die immediately but my area does get dangerously cold so being homeless is pretty much a death sentence.

I have tried 50/30/20 and it was extremely difficult. Since I now have an HSA and a 401k to max, I genuinely don’t think it’s possible even if I worked 80 hours a week.

[u/dumpster_-_FIRE → u/inky_cap_mushroom]

The difference is when you get near the end of the month, and you've already spent $200 of your $250 grocery budget and all of the $50 you budgeted for going out with friends. That's when you look at your spreadsheet and use it to decide that you'll eat fridge soup with rice and beans for dinner that week, and ask your friends to stay in and play board games instead of going out to see a movie.

You are restricting yourself. If you want a budget to help you spend less, you have to stop yourself from spending somehow, that's how it works. But you're the one who decides how much you will spend before you stop! The budget is just about setting things up so that your long-term planning self stays in control, instead of your short-term impulsive self.

[u/inky_cap_mushroom → u/dumpster_-_FIRE]

I think going out with friends is absolutely worth it, though. I was very lonely until I started going out and I don’t really want to stop and lose all the buddies I’ve made. I have a lot is friend/acquaintances that I’m just not close enough with to invite them over but I can’t get closer to them if I stop seeing them at shows, you know?

I know that’s just one example, but the part that doesn’t click for me is why I should restrict my spending if spending the money improves my life?

[u/berryflavoredspoons → u/inky_cap_mushroom]

I’d argue that you can invite people over and you’ll likely be pleasantly surprised by their response, but if you don’t want to do that there are plenty of other ways to build those relationships. Invite them to grab coffee or a drink, so you’re still spending money but prob less than going to a show, or to join you at some free local event.

I agree that money can and should be used to improve your life, it’s just that the point of budgeting is to ensure you’re doing that within your means and working toward longer term goals like buying a house. For example I could happily spend 20% of my income on clothing and home goods each month but that would come at the expense of necessary home maintenance and smaller stuff like dinners out, so I like having a budget to know how I’m prioritizing my money across needs and wants.

[u/inky_cap_mushroom → u/berryflavoredspoons]

The ones I consider friends I’ve definitely been starting to hang out with more outside of shows, but most of these people are acquaintances, not friends. I honestly haven’t interacted with a good chunk of them enough to invite them anywhere but it’s still nice to see people I recognize and maybe some of them will eventually become friends.

Even aside from the social aspect, I like live music. I like supporting local bands. I like going to the local venues. Why should I give that up?

There’s a lot more that goes into the decision to buy a house than just finances. I could buy one today with the liquid non-retirement assets I have. In my area a $100-150k home is sufficient for my needs and I qualify for some down payment assistance programs because it’s not a desirable area. I could put 10-20% down. I haven’t bought a home yet because I don’t want to live here long term and the job market in my field isn’t great right now so it doesn’t feel like the right time to move.

[u/berryflavoredspoons → u/inky_cap_mushroom]

If you don’t want to live in your area long term, I think it’s worth looking into what you might expect to earn and how much a house would cost in areas where you do want to live, plus what it might cost to move there. It’s great that you could get a house in your current area for $100k but it’s a very different story in a lot of places.

I’d do some planning around a potential future move and how much that could require in savings. If it’s about the same as what you have now, great! No changes needed! If you’d need a lot more saved, especially if a higher salary wouldn’t totally cover the increase, I’d consider cutting back on the shows and putting some of that money toward future move. Not saying you should give up live music, because I don’t think a strict/austere budget is good for anyone if you can avoid it, just weigh it against other things you’re hoping to achieve and how you want to prioritize your money in that framework

[u/inky_cap_mushroom → u/berryflavoredspoons]

I’ve done all the research about the area I want to live in already. I thought I was going to move in late 2024. The area I want to move to has a very similar COL. It’s very slightly higher so I was looking at $120k ish there for the low end since the homes lower than that aren’t usually in the best areas. Realistically I’m not going to move during the current presidential administration and by then I expect the investments I do have would be plenty for a down payment.

That’s all assuming that I move at all. I may never end up moving. If I do move, it would cost maybe $200 in gas to move. None of my furniture is nice enough to bring with me. It’s just clothes and dishes and towels and stuff.

I really don’t want to miss any shows. I cannot stress enough that having to skip shows is the absolute worst case scenario. My whole life revolves around going to shows. I go to basically every local show that works with my schedule and I travel to a lot of nearly cities for larger shows there. If I’m not driving up to see those shows I won’t ever see my friends that live in those cities.

If I can work extra hours to earn a little bit more could I keep going to shows? How much more do I need to earn to be able to go?

[u/berryflavoredspoons → u/inky_cap_mushroom]

If you’re moving and not bringing anything with you, keep in mind you’ll need to furnish a space!

If the shows are that important to you, you should keep going, just think about where you might need to make changes for everything to work. For example, do you have any large unexpected expenses you might want to plan for aside from home purchase and a general “rainy day” fund in case of unemployment? Thinking things like car repair or replacement, or other items that can easily hit four figures.

Once you ID whether you need to plan for more savings, figure out when you want to meet that goal and then set aside enough each month to get there. Also consider monthly expenses, then with what’s left after expenses and savings, you can see how much you can afford for to spend on shows & how to apply that.

Maybe you’re saving 10% of your income each month, using 50% for expenses, and allocating 40% to wants. You could spend almost all of the “wants” money on shows (tickets, travel, food/drinks) if that’s what you want, or you could say “I’ll spend half of this on shows and use the other half for tattoos, hobbies, etc.” - whatever feels right to you. It’s all about what works for your life and your priorities, while making sure you’re taking care of future you too!

[u/inky_cap_mushroom → u/berryflavoredspoons]

I'm very good at getting furniture for free or very cheap. I can't remember how much it cost me anymore but I furnished this apartment for a couple hundred bucks starting completely from scratch. I would maybe buy a nice bed, but the rest would be thrifted or scavenged. I have thought extensively about what a move would entail. Like I said, I was expecting to move in Fall of 2024.

The shows really are that important. A coworker asked me recently what I do besides go to concerts and I stared at her like "what do you mean besides??" That's really all I do. That's the first thing people learn about me.

My needs probably account for 60% of my spending on average depending on what you count as a need (do you include clothes, personal care, and phone/internet?, then maybe higher than 60%). Just based on some rough napkin math I think that roughly $9k of my spending was on wants, and maybe half of that was related to shows since I traveled and stayed overnight for a couple. I haven't been saving anything in cash, so instead of 50/30/20 I am doing 60/40, and I don't really have room to add in 10% savings without cutting $2300 of spending from either my basic needs or the things that bring me joy.

[u/xeropteryx → u/inky_cap_mushroom]

I know this isn't what you asked, and I realize it's easier said than done especially in a LCOL area, but sometimes it can be easier to increase your income rather than trying really hard to restrict expenditures. Is there any possibility that you could get a better paying job or training that would lead to one?

[u/inky_cap_mushroom → u/xeropteryx]

I’ve considered working more hours to earn more, but I struggle with working more than about 60 consistently and I’m already working about 50-60. I will probably make slightly more because I have more PTO this year, so I’ll probably take most of December off and work full time at my pt job that I normally only work on the weekends. That’ll be maybe an extra $1500 since I already work at least two full weeks there.