Ep 5 | The Key to Saving Money (It’s Not Budgeting)
In this episode of The F Word, Priya Malani discusses the shortcomings of traditional budgeting and introduces a new approach called the reverse budget. She emphasizes that budgeting often leads to stress and failure, particularly for high earners who struggle to save despite making good money. Instead of micromanaging expenses, Priya advocates for a system where individuals save first for specific goals and then spend the remainder of their income guilt-free. This method not only simplifies saving but also aligns spending with personal financial goals, allowing for a more enjoyable financial experience.
Tune into this episode to hear:
Why traditional budgeting sets you up to fail—and what to do instead.
Why high earners still feel financially insecure—and how to fix it.
The trick to automating savings so you actually hit your goals.
How to stop second-guessing every purchase and start enjoying your money.
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Transcription
Whenever I hear the term "budgeting," I cringe. I really, really don't like the word. I've never had a personal budget, and I've never even used a budgeting app. Yet, I’ve managed to save successfully. And I promise you, I’m not using willpower.
If you're a hardworking, high-earning 30-something like yourself—whether you're financially free, fixing it, or feeling completely stuck—I'm here to teach you the stuff no one else is going to. Enough foreplay. Take off the jeans, put on the sweats, grab a glass, and let's talk money. Welcome to The F Word. Smart money, no toll.
Today, we're talking about saving and budgeting. More specifically, I’m going to walk you through the three reasons why traditional budgeting is designed to fail and what I want you to do instead. I get it—you have busy lives and don’t necessarily want to spend time on your money. I know this because I don’t really want to spend time on my money either. So this isn’t a finance protocol for finance people. Think of it as a finance protocol for everyone. I always say smart money management is the best way to save money, and I’m going to show you why traditional money management doesn’t require micromanaging.
I’m not here to make personal finance feel like a course in spreadsheets, right? I want it to feel like a system that runs itself in the background while you live your life. At the end of the day, the right system should support you in enjoying your life—not make you feel confined or constricted. So let’s get started.
Why Do We Even Budget?
Here’s the thing: most of us don’t have a budget. We’ve been taught that budgeting is the key to saving money. The logic is that if we set a ceiling on how much we can spend, we'll have something left over at the end of the month to put towards a bigger financial goal. In theory, that makes sense.
But here’s what really happens: The month goes by, and nothing happens as planned. As one of our clients said, "There’s no such thing as a budget." A typical month goes like this: You overspend on clothes, so you try to cut back on groceries or dining out, which never works. Then you start looking at where else you could possibly cut, right? Suddenly, you're spending the entire month negotiating with yourself, trying to balance everything. Yet, you still end up with little or nothing left over anyway. It’s exhausting and demoralizing. And most of the time, it doesn’t work.
To be clear, if you've ever failed at budgeting, the problem isn’t you—it’s budgeting itself. Whenever I hear the term "budgeting," I cringe. I really, really don’t like the word. I’ve never had a personal budget, and I’ve never even used a budgeting app. Yet, I’ve managed to save successfully. And I promise you, I’m not using willpower.
The Real Struggle
Does any of this feel right? You make great money, maybe even more than you ever thought you would, but you’re not skipping on lattes or saying no to dinner with friends. You’re trying to be responsible, though, so maybe lately you opt for a regular Uber instead of Uber Black—at least when it’s not going on your company’s card. You start with a glass of wine instead of a bottle, even though you’re probably going to order another glass. You hesitate and politely decline when the waiter asks if you’d like to add shaved truffles for an extra $65. (I do regret that decision.)
You walk by a sample sale, but the line is long, so you convince yourself it’s a sign and skip it. Ideally, in those cases, you go home with more money in your pocket than you would have. You’re really trying here. But then, months go by. You’ve been making these concerted efforts, these conscious decisions to be responsible, yet your bank account doesn’t reflect it. Is there anything more infuriating?
Here you are, playing the game the way you’re supposed to. You’re saying no, you’re cutting back where you can, yet nothing is adding up. Nothing is growing. Nothing is changing. At some point, you start wondering, “What’s the point of even trying?”
The Secret to Saving
If you’re in your 30s, earning six figures, and want to be able to save successfully, I’m going to teach you the foolproof system. But first, let me ask you a question: Do you know why you’re saving? Your parents said you should. You want to buy a house. You want to pay for a wedding. You want financial freedom. You want to start a company. You want to retire. For me, I want more luxurious vacations.
These are all great reasons to save. The good news is that saving isn’t something you're born with—you’re not just naturally good at or bad at saving. So, just get that out of your head. Sometimes, I hear people say, “I’m a terrible saver.” That’s not a thing.
The problem is that we've been taught to think about saving money incorrectly and have been given the wrong system. Let me tell you about Ashley. She’s 35, makes $268,000 a year, and by all accounts, she’s made it. But instead of feeling financially secure, she’s always stressed about money. She’s got the apartment, travels all the time, and doesn’t really skimp on experiences. There's nothing wrong with that—she can absolutely afford it. But the hesitation and guilt that come with every big purchase? Not worth it.
The crazy part? She can afford it, but she never feels like she can. Saving is always an afterthought for her. Every month, it's the same thing—if there’s nothing left over, she tells herself, “Alright, I’ll try again next month.” But there’s stress, a lot of stress, without any clear reason for it. And Ashley is not alone. Most high earners feel this way.
After working with thousands of high earners, I’ve noticed something: the only group I’ve come across that’s predictably good at saving for the sake of saving are the children of first-generation immigrants. Their parents drilled saving into them, and they saved because they were told to.
Then there’s me, also a child of first-generation immigrants. I did the opposite of whatever my parents told me to do. So if you're like me, saving just for the sake of saving isn’t going to work for you. Yet that’s where most of us start—by having a general savings account and saving whatever extra we can find. But there’s a big problem with this: it’s hard to stay motivated.
When something pops up, it’s easy to dip into your savings. There’s no real sense of trade-off. Also, when can you stop saving? When is enough enough?
The Solution: The Reverse Budget
So, I asked Ashley, “Why are you so stressed about saving? What are you even saving for?” She didn’t have a good answer. She just felt like she was supposed to save. Ashley’s problem wasn’t that she couldn’t save—it was that she had no clear reason to save. And that’s the missing piece most people don’t realize they need.
Most of us aren’t clear on why we’re saving, and without a clear goal, it’s hard to stay motivated or deny ourselves something we want in the moment. You need a clear reason for saving—something like, “If I skip doing X now, I can do Y later.”
Once Ashley understood that saving had a purpose, everything changed. The next step was to set up a dedicated savings account at an online bank. We’ll discuss the benefits of online banks in another episode. She nicknamed the account “Basque Girls Trip,” because studies show that when accounts are given nicknames, we are much more likely to stick to the savings plan.
With the trip seven months away, we divided the $10,000 by seven months. Ashley needed to save about $1,500 a month—or $750 per paycheck—so that she could “afford” this trip. Without this plan, Ashley might have put the trip on a credit card, and as we all know, that comes with high-interest payments.
So, we set up an automated savings plan, so that on payday, $750 would automatically transfer from her checking account to her Basque Girls Trip account. Then, I asked her, “What else do you want to save for?” She said she already had an emergency fund but couldn’t think of anything else. I told her that now she could spend whatever’s left in her checking account without guilt.
And that’s how the reverse budget works: Save first, spend the rest guilt-free. It’s not about being reckless—it’s about spending on your bills, childcare, all the necessities, and then spending what’s left, guilt-free, on whatever else you want. The key is that you’re saving first for your future goals, and then you’re free to spend what remains.
Recap: The Reverse Budget
Decide what you’re saving for: Be specific—whether it's a weekend in Napa, upgrading your couch, or saving for a down payment on your first home.
Set up an automatic transfer: As soon as your paycheck hits, set up a transfer to a dedicated savings account. That way, saving happens automatically, out of sight, out of mind.
Spend the rest guilt-free: Whatever’s left in your checking account, spend it however you want, guilt-free.
If you're skeptical about spending guilt-free, the reverse budget forces you to be honest about whether you’re living a lifestyle you can afford. If you’re putting a trip on a credit card and paying it off over time, you can’t actually afford it. The reverse budget gives you a reality check to adjust your spending and priorities to match your income and expenses.
In the end, the reverse budget makes it easier to plan for your future, enjoy life today, and know exactly how much you can afford to spend. When the time comes, you’ll be able to buy that home or pay for your wedding without the guilt or the question of whether you can afford it.
So if you’re on board with the fact that traditional budgeting doesn’t work, try the reverse budget. Let it work for you and start enjoying your money guilt-free.
If this episode helped you rethink saving, share it with a friend who needs to hear it. See you next time!
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