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How to Recognize and Resist Toxic Budget Culture

dana miranda c e p f ® Mar 17, 2022

Money should be easy.

It shouldn’t be a source of stress or anxiety. It shouldn’t make you feel shame or guilt. It shouldn’t be more important than your need for joy or comfort.

Managing your money should feel simple, fun and freeing, regardless of your circumstances.

Personal finance gurus have mucked up our relationship with money with these sets of rules called “budgeting” — and it’s going to take a lot of work to break free.

“The personal finance and investment industry is a juggernaut,” one-time financial journalist Helaine Olen wrote in 2012 in Pound Foolish, “a part of both the ascendant financial services sector of our economy and the ever-booming self-help arena. It is seemingly everywhere.”

Our collective obsession with budgeting as a silver bullet to financial problems has only grown since Olen published.

Search interest in “how to budget” has risen about 20% in the past decade, and interest in finding the “best budgeting app” has doubled, as financial tech companies have pumped out ever more versions of the same myopic solution to the grand problem of financial insecurity.

A key step to recognizing and dismantling a pervasive phenomenon like this is to give it a name, so we can talk about it clearly. To that end, we’ve dubbed it “budget culture.”

What is budget culture?

Budget culture is what we call the damaging set of beliefs around money that — like so-called diet culture does for food and bodies — rewards restriction and deprivation, and promotes an unhealthy and fantastical ideal of financial wellness.

🥑 Budget culture: a damaging set of beliefs around money that rewards restriction and deprivation, and promotes an unhealthy and fantastical ideal of financial wellness. (click to tweet this!)

Budget culture is much more than just making a budget. You don’t have to engage in budgeting to be engulfed in the beliefs around it.

These beliefs pervade most of our conversations about money. The custodians of budget culture — many a personal finance guru, investment advisor, money coach, debt counselor, accountant and wealth manager — have us convinced we can find the right, most perfect way to manage money if we work hard enough. If your finances don’t look like you want them to, budget culture convinces you it’s because you’re not doing it right.

Budget culture:

  • Rewards restriction and deprivation, which are unsustainable.
  • Ignores the dynamics of income, interests and spending.
  • Demonizes spending — which is the whole point of money!
  • Categorically labels certain money moves as “good” or “bad” for everyone.
  • Demonizes some ways of spending and elevates others.
  • Promotes hyper-vigilance around money.
  • Values efficiency and economy above human health, happiness and wellbeing.

It does all of this because this standard rests on the premise that money is the goal in and of itself. It equates financial wellness with making the most money, and financial literacy with knowing how to hold onto it.

But, just like you are more than a number on a scale, your relationship with money is more than numbers in a bank account.

Let’s define ‘budgeting’

Budgeting is used broadly in the personal finance space and listed as a goal by almost everyone who consumes this media. But what does everyone mean when they say it? It varies.

At Healthy Rich, when we talk about “budgeting,” we mean any money management methods that rely on setting spending limits, tracking money and spending, or both. This could include named and defined budgets designed by financial gurus, or ad hoc money habits you’ve adopted because of the influence of budget culture.

Budgeting might involve:

  • Categorizing your spending (e.g. “eating out,” “bills” and “entertainment”).
  • Labeling expenses as “wants” or “needs.”
  • Tracking your spending, whether manually or automatically.
  • Limiting how much you can spend in a category or within a time period.
  • Accounting for every dollar in and out of your pocket.
  • Collecting shoulds for your money, like how much you should invest or how much your housing or debt should cost each month.
  • Bending your lifestyle to your money, rather than the other way around.

As personal finance educators, we hear often that people want to learn “how to budget.” I’m pretty sure they don’t mean they want to spend more time as their own personal accountants. 

What’s become clear over the years is that pretty much everyone just wants to have more, and worry less, about money.

Budgeting doesn’t actually solve that problem.

What’s wrong with budget culture

The simplest problem with budget culture is that budgeting doesn’t work.

New fad budgets keep rolling out, yet the average person is still accumulating debt, ignoring the future and fretting about money every day.

If a budget could solve our money woes, wouldn’t we all be a lot better off after all these decades of budgeting?

Budgeting doesn’t work

Like the fad diets that haven’t miraculously eliminated chronic illness, every budget relies on some form of restriction and deprivation, which isn’t sustainable. 

Just like we can’t starve ourselves of food in the long term, we can’t starve ourselves of life-giving spending, either. For most budgeters, the restriction eventually becomes too much, the budget fades away and we snap back to where we were until the next fad rolls along.

Even if spending limits and dollar tracking were proven to be the secrets to financial success (they haven’t been), they don’t work, because humans don’t work this way.

As Richard Thaler and Cass Sunstein point out in their influential bestseller on behavioral economics, Nudge, humans don’t have the brainpower or willpower most financial models require of us.

“Real people have trouble with long division if they don’t have a calculator, sometimes forget their spouse’s birthday and have a hangover on New Year’s Day,” Thaler and Sunstein write. “They are not Homo economicus; they are Homo sapiens.”

The fantasy of being rich

The much more insidious problem with budget culture is that it feeds off the never-ending pursuit of a promise it can’t fulfill: the fantasy of being rich.

It’s not that being rich isn’t possible — we’re called Healthy Rich because we believe a rich life is possible for everyone. It’s a “fantasy” because “rich” is a moving target.

Whatever you think of as being rich probably involves a little more income and a bit more comfort than you have now. Yet, when you reach it, you’ll probably still feel as if you have a little less than you could (or should).

🥑 Whatever you think of as being rich probably involves a bit more income and comfort than you have now. Yet, when you reach it, you’ll probably still feel as if you have a little less than you could. (click to tweet this!)

Some experts call this “lifestyle inflation” — the tendency to spend or need more as you earn or have more — but it’s more than that. It’s not just about how much money you have or spend; it’s about the way money drives every decision in your life because of the relationship with money budget culture has defined for you.

In a 2020 survey by financial advisory firm Willis Towers Watson, 38% of employees were living paycheck to paycheck — including 18% of employees who earned more than $100,000 a year.

When budget culture convinces you money is the end goal, that you could always have more and that there’s a right way to get there that you just don’t know yet, you get into a never-ending loop of aiming for the fantasy of being rich — a line that will always move to be just a little better off than you are now.

That fantasy of “someday” crossing a line that sneakily keeps moving means you can’t ever settle, be satisfied, feel comfortable or do what will make you happy in this moment.

That fantasy of “someday” crossing a line that sneakily keeps moving means you can’t ever settle, be satisfied, feel comfortable or do what will make you happy in this moment. You’re always waiting to have enough or be enough before you can take that next step.

This never ending dissatisfaction with money leeches into every part of your life.

In the Willis Towers Watson survey, 49% of U.S. workers who considered themselves “struggling” with money suffered from stress, anxiety or depression, compared to only 16% of employees who weren’t struggling.

How you feel about money has an important impact on your overall satisfaction with life — it’s about a lot more than just how much you have.

The patriarchal, white supremacist model of success

The very worst part of budget culture is that it’s, unsurprisingly, rooted in patriarchy and white supremacy. Because of course it is.

Like every other systemic arrangement that ignores the realities of varying levels of access and privilege in our world, budget culture preaches individual responsibility. It vilifies and oppresses anyone who doesn’t live up to the (poorly defined and ever-changing) ideal, regardless of their circumstances.

The personal finance industry is desperate to hawk financial literacy as the solution to financial struggles, dishing out one-size-fits-all advice for success — a financial planner once told me her male professor’s pet piece of advice was, “Contribute fully to your IRA every year. It’s that simple.”

But of course it’s not that simple.

52% of U.S. households have money invested in the stock market, according to Pew Research. But there are huge racial and income discrepancies:

  • 18% of households earning less than $35,000 per year are invested, while that number is 88% for households earning more than $100,00.
  • Families headed by white adults are twice as likely (61%) to have invested than families headed by Black (31%) or Hispanic (28%) adults.
  • 55% of women are likely to be saving for retirement compared to 65% of men, according to a BlackRock survey.

(We could share bleak money stats all day.)

Budget culture idealizes and advises for a version of richness that includes things like power at work, freedom from domestic labor, well-rounded education, debt elimination, homeownership, credit, and other things rich, straight white guys tend to have access to more readily than anyone else.

It also worships money as the end itself, which is a goal that’s only useful if you already hold power and privilege and don’t have to use your money and success to earn it.

Women are more likely to have a bachelor’s degree than men, but still earn just 81% of the salary their male peers can expect to earn after graduating at the same level — and hold nearly two-thirds of the student loan debt in our country, according to the American Association of University Women.

A push for literacy alone won’t close this gap.

Even most gurus who eschew the typical trappings of budgeting and preach “financial wellness” in place of “wealth” still tend to work within a system where “wellness” means some version of freedom and wealth defined by white patriarchy — like early retirement and property ownership. 

It’s not you — but budget culture makes it feel that way

Budget culture relies on your endless pursuit of its empty promises. It convinces you there’s a “right” way to do money; therefore, if your finances don’t match the ideal, it’s because you’re not doing the right things.

Plenty of financial gurus have conceded that budgets often don’t work, but they point to you to explain why. They say you set unrealistic goals, you spend too much, you haven’t allocated your limits properly, you don’t stick to your restrictions, you have no discipline, you don’t know enough about money, you you you…

It’s not you.

Budget culture supports mindsets and methods that are fundamentally flawed.

“I know, on a rational level, that tracking every dime that passes through my bank account is simply a way of distracting myself from all the ways my finances are out of my control,” journalist L.V. Anderson wrote of her transition from yo-yo dieting to obsessive budgeting for Slate. “I could get fired or laid off, I could get hit by a car or get cancer, I could get sued, the stocks in my retirement accounts could crash and not recover.

“But I’d rather not dwell on these possibilities. I’d rather believe — despite my experience with dieting — that if I keep logging my spending and keeping it in check, someday I’ll have enough money, and all my other problems will just go away.”

This is the siren call of budget culture. But it can’t fulfill such lofty expectations.

Restriction and deprivation can’t be maintained within a healthy and fulfilling life. Almost no one has perfectly fixed income and expenses. Life doesn’t operate on a 30-day reset. Our interests and needs fluctuate with seasons, age, relationships, moods, menstrual cycles, family dynamics and more.

No use for money is universally good or bad, right or wrong.

Your finances don’t look the way they do because you’re inherently good or bad with money.

As Olen wrote in Pound Foolish in the wake of the 2008 financial crisis, folks following the “right” financial advice discovered what so many have re-discovered in the wake of the 2020(+) pandemic: 

“No amount of personal initiative and savvy could guarantee anyone an exemption from broader negative economic and social trends.”

How to be anti-budget culture

Are you with us? Here are some ways you can spread awareness of and fight against budget culture in and around your life.

🥑 Want to share these tips? Click to tweet them!

1. Identify and question budget culture messages

The first step to dismantling any dominant paradigm is to recognize it around you. Where do you see budget culture influencing your life and society, and how can you flip the script?

Take a note from these tips that fat activist Virgie Tovar shared with NPR about battling diet culture to spot and question budget culture around you:

On an intrapersonal level, i.e. within yourself, ask yourself how budget culture affects your relationship with money. When you feel like you’re not doing enough or not making the right moves, pause to ask where that message comes from. Do you encounter definitions of wealth or success in education, entertainment or social media that impact how you feel personally?

On an interpersonal level, how do people treat you and others because of their money moves? Listen for judgments of how you use money — like praise for avoiding an “unnecessary” expense, criticism for not investing more toward retirement or jealousy about an expensive item you just bought.

On an institutional level, look for systemic bias related to money. Consider how easy or hard it is for you and others to navigate society based on your financial situation — like your income, wealth, credit score, savings and spending. How does budget culture’s emphasis on personal responsibility create barriers for people in various circumstances?

2. Watch your language 

Like many damaging social issues, budget culture lives as much in our language as in our actions and teachings.

That’s why we talk about “using money” and “money management” at Healthy Rich, instead of “budgeting.” It’s a regular reminder to ourselves of the messages we work to unravel, and it’s a simple way to avoid inadvertently perpetuating them.

Some other words we’re careful about (this list is ever-changing as we learn to do better):

  • “Wants” versus “needs.” This is nearly impossible to define and only serves to perpetuate stigmas about ways of using money. Things like shelter, food and health care are needs, but when we stop thinking of them as fixed costs, we have more options for meeting them without bending our life to our financial circumstances.
  • Expenses, bills and debts. We’ll use these words, but we’re careful about their context and framing. A lot of the ways personal finance media talks about expenses frames them as immutable obligations, which can make you feel trapped by your finances. We frame expenses as financial commitments — the promises you’ve made to pay — but not as obligations. A commitment is a choice you make, and that puts you in charge of your finances, instead of the other way around.
  • Emergency fund. This term for designated savings implies that a change in your financial situation constitutes an emergency, and we don’t support that narrative. Money is one reality in life, not a defining force. We recommend contributing to a comfort fund, a pool of money that sets you free from worrying about money, not an amount driven by your current expenses or income. It’s a reminder that the most money fluctuations can do is make you uncomfortable — they can’t break you.
  • Money mindset. We’ve talked plenty about money mindset, because it’s foundational to stepping out of the rigidity of budget culture and gaining a deeper understanding of the nuances of money in your life. But we’ve come to favor framing the idea as your relationship with money to avoid the implied blame the self-help world often connects to “mindset.”
  • Responsible. This term has been attached to money management and spending habits in modern personal finance to refer to “good” use of money and credit, and it’s toxic. It gives personal finance brands the leeway to recommend financial products like loans and credit cards while blaming you for undesirable outcomes.
  • Afford. This is a get-outta-jail-free card for financial gurus. Take out only the mortgage or loan you can “afford” to repay. Buy what makes you happy, as long as you can “afford” it. But no one explains what it means, and it likely means something different to everyone — making it meaningless in the realm of financial advice.
  • Credit scores. There’s not a better term to use here, just a crutch we in the personal finance industry need to stop relying on. Financial institutions, fintech companies and educators could weaken the power of this blatantly biased measure of our financial (and, therefore, social) worthiness simply by disentangling it from our processes and lessons.

3. Learn more about your own relationship with money

We’ve all been influenced by budget culture, whether or not we actively restrict spending, track money or hope to have more.

How has budget culture affected your relationship with money?

Answering that question is an ongoing process — we’re all perpetually in it — and it starts with understanding what your relationship with money is like. As you become aware of how you feel about money and how it fits in your life, you can look into how budget culture impacts that.

Ask yourself these questions (continuously) to unravel your relationship with money:

  • What messages have you gotten about money from your family, friends, coworkers, teachers and media?
  • How have your experiences with money affected how you feel about it now?
  • How do you feel when you or others talk about money?

4. Practice and promote conscious spending

Budget culture is all about controlling your spending in a quest to achieve the fantasy of being rich.

The counter to that isn’t uncontrolled spending in a quest to be broke. It’s conscious spending in service of a healthy rich life.

That means managing money in a way that feels satisfying and productive, not punishing and restrictive, nor obligatory and detrimental. Spend as much as you want on whatever you want — and check in with yourself occasionally to see how that spending impacts your life.

If it’s not making you feel good, make a change.

5. Get comfortable with not knowing the ‘right’ answers

Budget culture thrives on our need for an illusion of certainty.

When you believe the wrong financial moves will destroy your life, you’re understandably desperate to know and do the right things. Fad budgets promise to tell you which are the right things, and that certainty is comforting.

But it’s not real. 

The promise of budget culture is a fantasy, and its rules rely on a foundation that falls apart with the slightest variable.

To fight against the forces of budget culture, you have to get out of the comfort zone of those illusory rules and get OK with uncertainty. Because that’s real life.

Trust yourself 

All this uncertainty and rule-free “conscious spending” might sound scary to you. That’s budget culture convincing you you don’t know what’s best for your life. 

Trust yourself to use money in a way that’s right for you.

That’s the greatest act of resistance you can commit, and it’s the first step to real financial freedom — a life free from worrying about money, for everyone.

About the author

Dana Miranda is a Certified Educator in Personal Finance® and founder of Healthy Rich. She’s written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and a column for Inc. Magazine.

Image by @WOCInTech via Nappy

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