3 Ways to Budget Based on Your Situation

Budgeting is a crucial financial tool that helps individuals gain clarity and control over their money. The right approach for your financial plan depends on your situation (and your personality!). Usually, when I first start working with clients, the first thing they want to know is if I’m going to make them track an itemized budget monthly. The odds are good that, unless you were already following an itemized budget monthly before you became a client, one of these more hands-off approaches will be a better fit for your plan.

Today, we’ll delve into three budgeting methods: Traditional Budgeting, Reverse Budgeting, and Flow-Based Budgeting.

*If you want to join my budget accountability group, get on my email list to catch the next invitation. Sign up at the bottom of this page.*


1. Traditional Budgeting

Best for: Paying Down Debt

Overview: Traditional budgeting is what you imagine when you hear “budgeting.” This approach requires individuals to outline their expected income and expenses for the month and to set intended limits for each category of expenses. This sort of detailed budgeting works best with a tracking app.


          • Provides a detailed understanding of spending habits.
          • Helps identify areas of highest spending.
          • Can be tailored to specific financial goals, such as debt payoff or saving for a particular purpose.


          • Requires consistent attention and discipline to maintain.
          • Can feel restrictive.
          • Can be overwhelming.


Recommended Tracking Apps:

        • RIP Mint 🪦

My husband and I used Mint for 12 years, and I loved that it was low-maintenance and free. It let us see guidelines and trends, but it also made it easy to jump back in even if we fell off the wagon for a while. Mint is retiring this year, so stay tuned for my suggested replacement. I’ve heard fantastic things about Monarch and CoPilot. I’m trialing these now. I’m also revisiting RightCapital for budgeting since that’s the financial planning software I already use with my clients.

        • YNAB

If you’re ready for a more cutthroat approach to budgeting, I recommend YNAB. YNAB (“You Need A Budget”) shows no mercy – if you overspend in a category, you’ll get a pop-up asking you which other category you want to reduce to account for the overspending. You can only click out of this pop-up to review your budget after you decide! On the plus side, YNAB has a strong community of budgeting nerds online (primarily on Reddit). Community can go a long way in helping you through a tough budgeting transition if you need to make drastic changes.


2. Reverse Budgeting

Best for: Those spending less than they earn.

Overview: Reverse budgeting focuses on savings goals. Instead of starting with expenses, figure out how much you need to save monthly to meet your retirement, college, travel, and other goals. If you’re meeting those savings goals monthly, there’s only a need to track where the rest of the money is going if you want to. Set up automatic account transfers to meet your monthly savings goals without fail, then be sure those funds also invest automatically, if appropriate.


          • Hands off. Very little time or maintenance is required.
          • Guarantees a specific saving rate.
          • Provides flexibility for discretionary spending.


          • Doesn’t provide a detailed understanding of spending habits.
          • Only works if you have excess cash flow every month.


3. Flow-Based Budgeting

Best for: Those wondering “where does the money go?” each month

Overview: Flow-based budgeting is all about narrowing the scope of money decisions. I was introduced to this concept at a financial planning conference this year by presenter Natalie Taylor. Instead of looking at your “needs” vs. “wants” in your budget, flow-based budgeting looks at what is automated vs. what requires you to make an active decision.


          • Simplifies decision-making: if there’s money in the spending account, you can spend it; if not, you wait.
          • Weekly refresh provides a clean slate, which can be encouraging for those who might have overspent in the past.
          • Reduces the need for continuous tracking.


          • May not be meticulous enough for those who need to pay down debt under a particular timeline.
          • Those with irregular income may struggle to determine the right weekly amount.
          • May require some extra setup time to open new accounts and change payment information.


How it Works: 

Designate three different accounts or cards for the following three categories.

          1. Fixed Account: AKA the monthly autopay account. This account is for monthly commitments already on autopay, like your mortgage, subscriptions, and utilities.
          2. Flex Account: AKA the weekly spending account. This account is for expenses that require an intentional purchase, i.e., groceries, gas, shopping, etc. Make an initial estimate of weekly expenses, add some cushion room to that estimate, and replenish the account each Saturday. You’ll need to adjust this some as you get up and running.
          3. Non-monthly Account: This account is for expenses that tend to recur annually or sporadically. These tend to be larger items and may or may not be on autopay. Examples include property taxes, holiday spending, car repairs, and annual travel.

If you want to do this with separate credit cards instead of separate accounts, pay down the flex spending card every Saturday to reset the spending amount. The main goal is that once you’re set up and humming along, all you need to reference for your spending decisions is the balance in that flex spending account (or on that card). It’s much easier for your brain to decide if you can afford something if all you have to do is look at the balance of one account.


      • If you need to cut your spending, you’ll still need to look at trimming expenses from your fixed account.
      • If you set up a new subscription in the fixed account, reduce your transfers to the weekly spending account accordingly.
      • If you and your partner have separate accounts, set up separate fixed accounts, flex accounts, etc. Or set up a different combination that mimics the setup you have now.



Budgeting is personal. What works for one person may not work for another. The key is to find an approach that aligns with your goals, lifestyle, and temperament. Whether it’s the detail-oriented approach of traditional budgeting, the savings-first mindset of reverse budgeting, or the simplicity of flow-based budgeting, there’s a strategy to help everyone take control of their finances.

Prenups Do More Than You Think

2 sets of hands clasped together on either side of a table. In between: a document, pen, and wedding rings.

Marriage is, for many people, the foundation of a happy life. But modern living puts pressure on us in so many ways, and money is often at the core. Finding a way to build trust and openness can be difficult. We all have complicated relationships with money, which begin in our childhoods and reflect our parents’ attitudes and beliefs. There are often hidden sensitivities and danger spots that neither partner is aware of – until something crops up that creates a problem.

In addition, it can be hard to navigate through all the things that Gen X and Gen Y will potentially face:

  • Multiple careers, multiple 401(k)s
  • Complex equity compensation
  • Blended families
  • Family wealth
  • Moving to a new city or state
  • Leaving the workforce
  • Starting a business

Having a road map that begins with honest, structured conversations and allows each partner to weigh in on decision-making and feel heard can be the best way to build a long-term, respectful relationship.

You might be surprised to know that what I’ve just described is a prenuptial agreement, also called a prenup or pre-marital agreement. The present-day prenup was originally conceived to protect each partner throughout the marriage and simplify the proceedings in the event of a divorce.

There are still a lot of situations where a prenup is necessary. But even for couples without those prenup-necessitating factors, the process of being thoughtful about money and making your plans and wishes explicit in the form of an agreement can be a part of starting a healthy marriage out right. Among many other positive functions, a prenup can be a springboard to allowing each partner to build a professional life that satisfies them while also keeping the family and marital life on track.

The Basics – Situations (and People) Prenups Are Designed to Protect

Blended families: Protecting children from previous relationships is often the first consideration of a prenuptial agreement. It may set aside funds for their future education or other needs, or protect existing financial obligations to children or an ex-spouse.

Protecting Existing and Created Wealth: The traditional view is that the prenup can protect the wealthier spouse – but that only works for existing wealth. Equity is increasingly part of the compensation package, and the potential for this type of compensation to suddenly be worth vast amounts of wealth – years after it was originally granted – has grown. Prenuptial agreements that protect both partners and spell out exactly what is included and what is not are becoming the norm.

One Partner Has More Debt: Debt is one of the most challenging aspects of joining finances. Existing debt can become the other partner’s responsibility, and debt incurred during the marriage may also be fair game for creditors. Prenuptial agreements can help clear the air, spark healthy conversations, and set clear boundaries that will help everyone feel protected.

Business Ownership: If you own your business, whether outright or with a partner, including it in a prenup can preserve the value, protect partners, and keep the business from becoming marital property as it grows in value during the marriage.

When the Choice is for One Partner to Forgo Work: If a couple decides that one partner will be putting a career on hold to undertake family-oriented duties, a prenup can help protect them. This can include annual contributions to an IRA, a life insurance policy, and other financial arrangements that allow the non-working spouse to create wealth on their own terms.

Clarify Non-Marital Assets: Inheritances are non-marital assets. However, they can be unintentionally commingled and converted to marital property. Additionally, some states only protect original inheritance values as separate property, and consider any appreciation in value during the marriage to be marital property. A prenup can explicitly define non-marital property so there is no question about how to treat it.

The Bottom Line

Careers, families, our dreams and goals, and our desire to create a true partnership with someone else can all be accomplished – with the help of some honest conversation and then creating a prenuptial agreement that speaks to everyone’s best interest. It’s not a contingency plan for divorce – it’s a road map to a long and happy life.


The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

This content not reviewed by FINRA

A Scoop of Vanilla Podcast Interview: Lindsey Talks Prenups with Kaylin Dillon

Check out my interview with Lindsey Swanson, CFP® on her podcast A Scoop of Vanilla. We talk prenups, relationship power dynamics, and when to start talking to your partner about how you want to handle your finances together.


Lindsey has dedicated her practice to providing financial advice for sex workers and gig workers. She’s passionate about making financial services available to communities traditionally ignored by the financial services industry.

Talking Money With Your Partner

Being able to talk about money and work through uncomfortable conversations is the mark of a strong partnership. Many of us would agree with that but that doesn’t mean we’re good at it. Most people do not grow up hearing adults modeling healthy financial conversations, which means most of us could use some practice developing this important skill. Money is also deeply personal for everyone. Broaching a conversation about how to manage money as a couple means tapping into each others’ childhood, history, personal values, fears, and dreams. It’s no wonder that, according to a 2019 study from the Financial Therapy Association, nearly 80% of people surveyed hadn’t talked to friends or family members about money in over a year.1

So how do you successfully communicate about this loaded topic? The answer is: with care. It can help to have a framework that fosters the psychological safety, respect, and kindness you strive for in other aspects of your relationship. Ultimately, when you know your partner understands where you’re coming from and cares about your feelings around money, you will be able to discuss finances constructively with confidence – even when you don’t totally agree!


Be Curious and Open

Whether you’re dating, planning your wedding, or have been married for years, it’s never a bad time to start talking more about your finances and how you want to approach them in your relationship. Like any new skill, it’s best to work on mastering the basics first. When it comes to talking about money one of the key basics is to approach the topic first with curiosity and a desire to learn more about your partners’ feelings around various money topics.

Tip: keep the conversation in a healthy mode of curiosity by agreeing up front to take decision making off the table.

Here are a few questions to get your wheels turning:

“How did your family handle money growing up? How did your family view and talk about money?”

This question helps clarify existing beliefs and habits, which is necessary to start moving forward and having more in-depth, constructive conversations.

“If money were no object, what would your ideal life look like? What would it mean for you if you could achieve that?”

This allows you to open up your mind to more possibilities and can help get to the root of your financial desires and goals.

“What’s one thing you would change about the way we manage our money?”

This helps set a baseline and gives you both a chance to share concerns and wishes so you can start aligning on a shared future vision.

“What would you like money to do for us that we haven’t done yet?”

This question may help you develop more tangible action items that can help you on your way to your shared vision.

👉 Sign up here for more conversation tips and money discussion prompts.


Set Collaborative Goals

It’s essential to set financial goals in order to put your money to work towards your life goals. The critical part is doing it together. If you’re new to setting collaborative financial goals, start with one you can control. For example, a great first goal together could be to review your spending together monthly.

If you’ve created trust and comfort in your financial conversations, you can start discussing more difficult money goals. These could be prioritizing paying down debt or building up an emergency savings fund. If your finances are in good shape, you can tackle life goals such as saving for kids’ college education, buying your dream home, or funding a new business venture.

When you set goals together, you get buy-in from both sides. Each person gets to express their thoughts and opinions and, ultimately, finding common ground will give you room to adjust to life’s inevitable surprises while still remaining on the same page.

Lastly, don’t neglect individual financial goals. Let your individual goals help guide how you set up your finances. You may have a joint checking account you each help fund to cover shared expenses while you also save to personal accounts for individual goals. There’s absolutely no right or wrong way to do it as long as you find a way that works for the two of you. Having conversations around what you each value individually will help each of you support each other’s individual goals as part of your big-picture goals as a couple.


Make a Plan

Goals are only as good as the plans made to achieve them. Once you’ve had conversations and highlighted some key goals, get out a pen and paper (or a Google Doc) and write them down along with achievable action items you can take to get there. Committing plans to writing can be powerful. Spelling out your goals and steps also helps you remember them when life gets busy. Don’t worry about making a perfect plan. Real life will always get in the way and require you to make adjustments. Just setting a starting point and moving in the right direction will take you far.

In addition to making plans to achieve your big, long-term goals, your money plan can consist of many different things. It can outline financial responsibilities for the household, such as who pays the bills, who reviews the spending, or who manages the investments. It’s not uncommon for partners to each think the other is handling a task so it’s worth checking together to make sure the lines of responsibility are clear and that you’re both comfortable with them. And if you’re one of the many busy couples that operates by addressing “fires” like past-due notices and tax deadlines as they come up, your schedules and stress levels will benefit greatly if you discuss responsibilities clearly and give yourselves room to divide and conquer financial tasks proactively.


The Takeaway

Talking about money is hard but avoiding it is harder in the end. Communicating about money is just as vital to your relationship as any other type of communication but it also takes practice. Start small and build confidence and trust before tackling bigger conversations. If you’re both willing to practice the skill of communicating about money, you’re already off to a fantastic start and you have a lifetime ahead to keep practicing.



1. McCoy, Megan. Exploring How One Exploring How One’s Primary Financial Conversations Varies by Marital Status. Financial Therapy Association. 2019.


The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

This content not reviewed by FINRA.

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