I have a very healthy approach to budgeting.
I write everything down.
I categorize my expenses.
I use a color-coded spreadsheet that, frankly, deserves its own LinkedIn profile.
I highlight rent in red, groceries in green, and “miscellaneous” in a shade of yellow that whispers you already know what happened here.
Then I spend money on things that were not in any column, in any color, on any spreadsheet ever created.
This is my approach to budgeting.
It has been my approach since I earned my first paycheck.
It will probably be my approach at retirement, assuming I reach retirement, which, given my approach to budgeting, is statistically ambitious.
The Moment Every Budget Is Born (And Secretly Dying)
Every budget begins the same way: with a crisis.
Not a dramatic crisis.
Not a cinematic, slow-motion crisis.
A quiet Tuesday crisis.
The kind where you open your banking app to check a balance, see a number you were not emotionally prepared for, and immediately close the app as if that will help.
It will not help.
But from that Tuesday crisis comes intention.
You grab a notebook, not just any notebook, the nice one you’ve been saving, and you write at the top, in your best handwriting: Budget.
Maybe you underline it.
Maybe you draw a small box around it, because this is serious now.
This is the honeymoon phase of budgeting.
Psychologists call this the planning fallacy, our remarkable human ability to believe that the future version of ourselves is a completely different, significantly more responsible person.
Future You wakes up early.
Future You packs lunch.
Future You does not stand in a checkout line adding things to the conveyor belt that were not on the list.
Future You, unfortunately, is a fiction.
Present You is the one with the card.
The Psychology of “I Deserve This”
Here is where budgeting gets philosophically interesting, and a little sinister.
The most dangerous phrase in personal finance is not “just this once.”
It is not “it was on sale.”
It is not even “I’ll figure it out later,” though that one does serious damage.
The most dangerous phrase is: “I deserve this.”
Three words.
Perfectly engineered to bypass every rational thought you have ever had about money.
I’ve had a hard week, and I deserve this coffee that costs the same as a small country’s GDP.
I worked overtime, I deserve this jacket, I will wear it twice.
I’ve been so good lately, I deserve this dinner that costs more than my electricity bill.
Psychology teaches us that this is not a weakness.
It is the brain’s reward circuitry doing exactly what it was designed to do, seeking immediate pleasure to compensate for recent discomfort.
Your budget is a rational document.
Your brain is not a rational organ.
It is an ancient, emotional, deeply irrational piece of biological equipment that survived thousands of years of scarcity by taking rewards whenever they appeared.
Your brain does not know that the scarcity is over.
Your brain does not know about the spreadsheet.
Your brain just knows the jacket is right there.
What Philosophers Knew About Money That Spreadsheets Don’t
The Stoics, Marcus Aurelius, Seneca, and Epictetus, wrote extensively about desire and self-discipline.
Seneca once wrote that it is not the man who has too little who is poor, but the man who craves more.
He was right, of course.
He was also writing in the first century AD, before same-day delivery existed.
The philosophical problem with budgeting is not mathematical.
If it were mathematical, everyone who owns a calculator would be financially sorted.
The problem is existential.
We spend money not just to acquire things, but to feel things: security, identity, comfort, status, joy.
A budget addresses the numbers.
It does not address the feelings behind the numbers.
This is why budgeting advice that focuses only on numbers fails most people.
“Just spend less than you earn” is technically correct in the same way that “just don’t be sad” is technically correct.
Accurate.
Useless.
Real budgeting, the kind that actually works, requires the uncomfortable question: What am I trying to feel when I spend money I shouldn’t?
That question, right there, is worth more than any spreadsheet.
The Five Stages of Every Monthly Budget
For those who have never budgeted before, allow me to walk you through the stages, so you may recognize them when they arrive.
Stage One: Optimism.
You sit down, calculate your income, and genuinely believe you will have money left over at the end of the month.
You feel like a person who has things sorted.
This feeling lasts approximately four days.
Stage Two: Negotiation.
Around day five, something unexpected happens.
It is always something unexpected.
You negotiate with the budget.
You move numbers around.
You tell yourself that the “emergency fund” column is flexible.
It is not flexible.
That is why it is called an emergency fund.
Stage Three: Denial.
You stop checking the spreadsheet.
The spreadsheet still exists.
The numbers are still in it.
You just choose not to look.
This is not a budgeting strategy.
It is, however, a very popular one.
Stage Four: The Reckoning.
End of the month.
The banking app.
The number.
The Tuesday Crisis returns, wearing the same expression it had last month and the month before.
Stage Five: A New Spreadsheet.
Slightly more detailed this time.
Different color scheme.
This time, you are serious.
And so the cycle continues, beautiful and eternal, like the seasons, or a television show that should have ended three series ago.
The One Approach to Budgeting That Actually Holds Up
After years of research, by which I mean years of personally failing at this and reading about others failing at this, here is what genuinely works:
Budget for who you are, not who you think you should be.
If you buy coffee every morning, put coffee in the budget.
If you stress-shop when work is difficult, create a small, contained allowance for exactly that.
If you eat out more than you cook, your budget should reflect your actual life, not an aspirational life that belongs to a calmer, more organized stranger.
The budget that tells the truth about your habits is the only budget that has any hope of changing them.
Because you cannot fix what you refuse to acknowledge, and you cannot acknowledge what you’ve hidden in a yellow column called miscellaneous.
Aristotle believed that self-knowledge was the beginning of all wisdom.
Turns out it is also the beginning of a budget that survives past day four.
The Budget Is a Mirror
Your approach to budgeting is, in the end, a portrait of your relationship with yourself.
The categories you fudge reveal what you’re ashamed of.
The columns you skip reveal what you’re avoiding.
The gap between the plan and the reality reveals the distance between who you believe yourself to be and who you actually are at 9 pm on a Wednesday when the online sale ends in two hours.
That’s not a financial observation.
That’s a philosophical one.
And the jacket was nice, in fairness.
It really was.
If this felt uncomfortably accurate, you’ll probably enjoy Still Loading: The Unauthorized Biography of a Professional Overthinker, another honest look at the gap between who we plan to be and who we actually are, and if you’re convinced you’re the exception who sticks to the budget, The Hobbies We Didn’t Quit, We Just Put on Silent Mode has something to say about that.