Dana Miranda shares why you don’t need a budget and an intuitive approach for building a healthier relationship with money.
Have you ever felt that you’re just bad with money? Like, no matter how many budgeting apps you download or how many spreadsheets you build, nothing ever sticks? Maybe the problem isn’t you. Maybe the problem is that you think you need a budget…and you really don’t. So close the app, toss the spreadsheet, and let’s hit reset.
On the HerMoney Podcast this week, Jean Chatzky sits down with Dana Miranda, author of “You Don’t Need a Budget: Stop Worrying about Debt, Spend without Shame, and Manage Money with Ease.” Dana explains why traditional “budget culture” can be just as toxic as diet culture, and how a more intuitive, values-based approach can help us build a healthier relationship with money.
“You Don’t Need a Budget,” So What Do You Need?
Jean Chatzky: My attitude has always been, I don’t care if you have a budget. I care that you save first, and if you are consistently saving enough for your short-term emergencies and your long-term future, do whatever you want with the rest of your money.
Buy the coffee if you want to buy the coffee. Buy the shoes if you want to buy the shoes, just make sure that you’re hitting those savings goals. That’s the methodology that our FinanceFixx program is built on. But my question for you is, if you don’t need a budget, then what should we be using instead?
Dana Miranda: It’s very similar to what you’re talking about, which sounds a lot like reverse budgeting or anti-budgeting. It’s a pay yourself first method, which is to get your financial commitments and your financial goals in order, and then you don’t have to track every dollar.
Think about what makes sense for planning for what I call a comfort fund, which encapsulates your potential financial emergencies, but also embraces potential opportunities. You can decide what those numbers are, what those goals are, how much risk you want to take, and what comfort means for you.
The Money Map + The Yes Fund: A Simple, Intuitive Framework
Jean Chatzky: You have leaned into this idea of reverse budgeting. For people who want to give it a try, how would you say they get started?
Dana Miranda: First, I would start by getting the lay of the land of what’s going on with your money, so that you know where your money needs to go and any changes that you want to make. I lay out an exercise called a money map, where you list all of your resources and your financial commitments, and what’s left is what I call a yes fund. That’s your safe-to-spend fund. It is a fund that you can spend freely from without the stress of tracking every dollar.
Anchoring Your Financial Life Around The Work You Actually Want To Do
Jean Chatzky: This idea that sometimes I make a lot of money, sometimes I’ve made a lot less, is a very common reality for people. How did you get to a place where you knew what comfort meant to you and you could push back against those outside forces?
Dana Miranda: One of the biggest things for me was deciding what I wanted work to look like. When you decide what your priorities are for how you want to work and what kind of work you want to do, that can drive your decisions, rather than having to go after work to make a certain amount of money to support a certain kind of life.
I know that I’m not going to be a mid-six-figure earner for most of my career. So when I went to buy a house, even though I really like living in the city, I knew that I didn’t want to take on a mortgage for a house in the city. So I bought a house in a rural area where the cost of living is much lower, but I can own a home and have a stable housing situation that I can afford, regardless of how my income fluctuates over the years as a writer.
So ask yourself, what is the thing that you want to anchor your life around, and how will that impact your financial situation? And then, how can you use that financial situation to support the life that you want to have?
… Does more financial confidence sound good to you, then you might want to try:
🚀 FinanceFixx – HerMoney’s 4 or 8-week Money Makeover financial coaching program that will help you get your finances on track!
📈 InvestingFixx – HerMoney’s investing club for women who are ready to learn market lingo and grow their wealth. Your first month with us is completely free!
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