It’s 2025, stop making the wrong budget. Try this instead

It’s officially the new year. Now that the holidays are over, it’s time to start thinking about your financial goals for the year. Maybe it’s saving for a house or restocking your savings from last month’s spending. Once you set your goal, reality often starts to set in: You have no idea how much money is coming in or going out each month. Or how You Really plan to reach your goal on time. You need a budget.

I get it: traditional budgeting can be frustrating and daunting. It may make you not want to budget at all.

Think about adding your bills and expenses each month in Budget app Or the spreadsheet you’re afraid to open. You may spend some time regretting last month’s purchases or begin to wonder if your goal is achievable. It’s frustrating and exhausting. This technique doesn’t work for most people, including me.

Budgets are not inherently bad. In fact, that’s how I became debt-free. Here’s how I cover all my essential bills, while still working to pay my expenses Long-term financial goals Without a monotonous budget.

Why are you afraid of your boring budget?

I have a few Budgeting techniquesincluding my own Comprehensive spending strategy. What I’ve found is that traditional budgeting is rooted in tracking past expenses and berating yourself for money you shouldn’t be spending. Then, if you’re not completely desperate, make a plan not to spend the money next time. This approach doesn’t work, and it’s bad for your mental health.

Here are the top five red flags as to why your budget routine isn’t working.

🚩 Deprive yourself of living life: You always feel restricted and unable to enjoy yourself.

🚩 Guilt over spending: You feel ashamed when you spend money, even when it’s there Planned expenses.

🚩 One small change can be nerve-racking: You obsessively track every expense or scrutinize small details.

🚩 Debt and spending problem: for you Debt is rising Instead of shrinking, or going over your budget more than three times a year.

🚩 Financial discussions are tough: You’re afraid to talk about money, even with close friends or family.

Winner of the CNET Editor’s Choice Award for Best Budgeting App

Think of your budget as your best friend

I think of my budget as a living, breathing friend — a friend who I look forward to seeing each month because she supports me in achieving my dreams.

This approach helped my husband and I retire early after paying off $300,000 in debt in three years and investing more than $1 million. We did this without inheriting money or receiving financial guidance from our parents. I created a simple three-category budget to make managing my money simple and stress-free each month. Here’s how we break it down:

Budget categories

He works hard	alive	He survives
Investments in my future, including emergency savings, debt payments, investing, and business expenses.	Unnecessary expenses that enrich my life, such as vacations, clothing, entertainment, and hobbies.	Basic necessities such as housing, taxes, utilities, transportation, food, and health.

I don’t waste time thinking about last month’s expenses. Instead, I focus on what I’m planning within these three categories with the same enthusiastic energy as vacation planning. Here’s how to use this method to make your budgeting less boring and more motivating.

Put your Strive class first, seriously

When preparing a budget, most people set aside money for all of their daily expenses first, and then use what’s left to save, pay off debt, or invest. Life happens, and more often than not, there’s no money left over. Why not put this goal first in your Strive class?

For example, if you want to save $1,000 this year, start with the goal of transferring $100 to your high-yield savings account. This helps your budget be more motivated because you have prioritized and completed the goal. It’s nice to start with a high five instead of a slap on the wrist.

You need a cash cushion for this to work

To feel comfortable prioritizing your goals before your needs, you need to Cash flow cushion. Think of it as a buffer in your checking account to give you peace of mind that you can cover your bills. The exact amount will vary, but it usually equates to one month’s expenses. This is not Emergency fund (Although this is important for construction as well).

For example, if you typically spend $3,000 on expenses each month, make sure your checking account never falls below that number. Having this money stashed in your account can help you stop worrying about your next one payday It helps free you from the idea that budget is a constraint.

Your Revive class helps you live a fulfilling life

Your Revive class should help you build hobbies and happiness into your budget. Instead of looking rich, focus instead on feeling rich and content. Here are some examples:

Instead of booking a vacation that exhausted me more than rejuvenated me, I put that money toward a monthly yoga studio membership.
Instead of virtually buying clothes or gadgets at retail when I’m stressed, I pay for therapy sessions.
Instead of eating out for convenience, knowing that the food is not nutritious, I eat out to connect with close friends or experience new cultures.

The Revive category is often overlooked or avoided when budgeting. The Revive class is the most important part of your budget. You should allocate at least 25% of your net income to cover non-essential expenses that enrich your work week.

Set the survival category for automatic payment

Setting up automatic payment for your monthly bills can dramatically improve your relationship with your budget. Consider setting it up for your cell phone, insurance, and Energy bill. Taking a “set it and forget it” approach comes with some benefits:

Reduce the stress and anxiety that can come with bill due dates and amounts
Enhance your credit score over time with a good payment history
Avoid late fees with on-time payments
Improve your budgeting time by focusing on larger financial goals
Financial discipline by automating the things you need to pay for, regardless of income

Additionally, automatic payment simplifies daily budgeting, promotes accountability, and provides better support Cash flow management. Setting up automatic payments for these invoices means you only need to think about your Revive and Strive goals.

Allocate your budget to make it fun

I’ve condensed all of my items under each of these categories so it doesn’t get confusing. I’ve also given each item a fun title. Here are some examples from my previous budgets:

He works hard

Drop the debt! = Payments towards my student loans
My next dream home = savings on down payment
Crush patriarchy = business expenses

alive

Looking fly at 40 = my yoga studio and dance studio memberships
Rich Auntie Era = Plane tickets to visit my niece and nephew
No kids and no fun = nights out with my husband

He survives

Investing in infrastructure = paying taxes
Delicious in my stomach = food
I love my house = rent

There is no perfect budget

You’ve probably found budgeting boring in the past because it was an all-or-nothing plan. If one of the items does not go according to plan, it means defeat, anxiety and stress. No budget is perfect 100% of the time.

I’ve learned that 80% success is good enough to make significant progress. If one or two items in your budget get out of control, that’s okay. It means you live a normal life.

This budgeting approach gives you a combination of control, flexibility, and thoughtful spending. Sticking to a budget 80% of the time is better than not following it at all.