Money is for Spending, Not Hoarding.

Author Dana Miranda explains how budget culture makes us miserable--and doesn't help our finances.

Udo Keppler’s “Money Talks” via Artvee.

Early in her financial journalism career, author Dana Miranda wrote for a publication that dispensed fairly standard money advice—opt for the employer match on your company 401(k), don’t carry a credit card balance, watch those lattes and avocado toasts. But over time, Dana realized that this advice does not work for everyone, and in her new book, You Don’t Need a Budget, she explains how our one-size-fits-all budget culture promotes greed, restriction and shame. Worst of all, it doesn’t work.

Dana is the creator of Healthy Rich, a newsletter about how capitalism impacts the way we think about money. She’s a Certified Educator in Personal Finance (CEPF), the expert behind the nationally syndicated “Dear Penny” financial advice column, and a contributor to Business Insider, Fortune, Salon, and more.

I’ve been a fan of Dana’s work for a while, so I was excited to read her book, especially since I’m fairly knowledgeable on this topic. I’ve written frequently about money for both women’s and business media, everything from Cosmopolitan and Women’s Day to Forbes and BBC Capital. And I have my own criticisms of the way financial media blame individuals for systemic problems.

But I didn’t anticipate how profoundly You Don’t Need a Budget would shift my thinking. I’ve never kept a budget, nor have I ever given the advice to keep one, but reading Dana’s book made me see the ways I’ve been both a budget culture participant and advocate.

At the same time, I’m glad I followed my own budget culture advice—it has helped me enjoy relative financial stability as a freelance writer and build a healthy retirement account. So I had a lot of questions for Dana, and I’m grateful she agreed to talk this through.

This conversation has been edited for length and clarity. The full transcript is double this length, and it was hard to cut because Dana had fascinating things to say throughout the entire interview. As always, paying subscribers can listen to the full audio of this conversation HERE.

SE: How did you get started in personal finance journalism?

DM: I kind of stumbled into it. I was working as a freelance writer for about four years. I was figuring myself out, and I was very interested in creative writing. I wasn’t making very much money, but I was starting to follow some people in the space, and someone I really admired announced that her company had just been acquired by a media company that wrote about personal finance, and they were hiring full-time staff. So I jumped at the opportunity to work with her and the people she had around her.

I thought I would hate personal finance, because it seemed very dull to me as a creative person, but it turned out to be really great. It was in the early days of personal finance blogging, and we were starting to talk about personal finance in an approachable way.

I also was able to learn about my own finances and learn about money and our financial systems in a way that had never been accessible to me. Growing up as a working-class person in the Midwest, money and the financial industry was not something that we talked about. So being able to write about these topics and get paid to dig into them was really interesting to me, and I came to really love it.

SE: You wrote about a study your colleagues brainstormed about, which found that people with lower incomes pay more for toilet paper. What did you learn from that study and the conversations with your coworkers about it?

DM: We saw a story in the Washington Post that talked about the fact that poor people pay more for toilet paper. They found that when you have less money, you end up paying more for stuff because you have to buy in smaller quantities, and things tend to be cheaper in bulk. The 24-pack, or the big toilet paper packs from Costco, can be a lot cheaper if you have the storage space for it and the money upfront to buy it.

We started talking about how we could cover this study for our site, and the suggestion that came up was, “Why don’t we compare? Help people understand when it makes sense to buy something with a credit card, even if you’re going to accrue some interest? Do a little bit of math to figure out if it makes sense to pay a little credit card interest if, overall, you’re going to pay less for this product down the line.”

And I raised my hand and said, “What if you don’t have a credit card?” And all of the writers around me looked confused about it and were like, “What do you mean?” And I was confused myself. I was like, “What do you mean what do I mean? What if someone doesn’t have a credit card?” So then I realized, “Oh, they’re not understanding that some people might not be able to get a credit card. So I just spoke up from my working-class perspective, from this person who had been making $12,000 a year for the past four years as a freelance writer, and said, “If someone doesn’t have enough money to buy a 24-pack of toilet paper, they might also not have a good credit score. Those things often go hand in hand.”

They were just surprised to hear that, and I realized that I was surrounded by people who had been raised in middle-class households. And then looking at the media landscape, even though we were primarily women in our newsroom, the industry at large is predominately white, male and middle class. That perspective really makes a difference in how things are covered, especially that middle-class perspective in personal finance.

SE: Is that what got you started with this idea of budget culture and what ultimately became this book?

DM: It certainly planted a seed, but I didn’t really start critiquing the industry with any intention until about four years later, when I started freelancing. I was writing for other personal finance sites and started to realize that all of the advice coming out was the same. Then I started to make that connection of the privilege and lack of diversity that was in the space, and how that was impacting the kind of advice that we were giving people about their money.

I was also learning about diet culture at the time, and so I started to make the connection there. And I thought this is so much like the way that we approach money, the restriction, the shame, and the one-size-fits-all rules. So I gave it a name, budget culture, and that really opened it up for me. Every time I learned something new about diet culture, I would tie it back to the work that I was doing in personal finance and realize that we’re making so many of the same mistakes in the way that we talk about personal finance.

SE: Would you say more about how you define budget culture and its relationship to diet culture?

DM: Budget culture is my term for our cultural relationship with money. And just like what I see in diet culture, it relies on restriction, shame and greed. That can show up explicitly as keeping a budget that puts restrictions on how you use money and shames you for not sticking to those restrictions. Or it can show up more implicitly in the attitudes that we have about money—the stance that we take about how we’re organizing our money, the way that we’re judging our own financial moves, the advice that says you should be saving a certain percentage of your paycheck. There are all these messages that we get in the culture at large, and then much more explicitly from personal finance media and education, that make up budget culture. It’s this cultural mindset that relies on individual responsibility and blames you for your financial situation, and then gives you this set of rules based on restriction to fix whatever you know is wrong with your financial situation.

SE: You also write that the other relationship between budget culture and diet culture is that they both don’t work.

DM: We’ve got almost 100 years of research into dieting that shows that it’s very ineffective. It’s unsustainable, and it doesn’t have the health outcomes that people want. It doesn’t even really have consistent weight loss outcomes that people are expecting.

I realized we should very easily be able to answer these same questions about budgeting. The behavior is very similar, so the kind of studies that we could do would be very similar.

But most of what I was seeing about budgeting was surface-level surveys in the media that asked a set of readers if they budget. And that was the only information we were usually getting. So it would be a headline about whatever percentage of people don’t keep a budget, or would like to keep a budget, followed by an article on how to keep a budget.

But when I looked a little deeper, I found some researchers who saw this lack of investigation into budgeting and wanted to answer that question. And they found that, just like dieting, budgeting is unsustainable because it enhances what they called the pain of paying. So it makes you more aware of what you’re spending, which makes the spending less enjoyable, which some budget fanatics think is a good thing, but if you think about it, spending is required to live your day-to-day life. And if you’re adding an extra pain point to that, you’re basically reducing the enjoyment in your life.

So it becomes unsustainable because we don’t want to live a joyless life. And even if people are able to sustain it, budgeting doesn’t help people spend less money. It doesn’t help them achieve financial goals, and it doesn’t reduce financial stress--which I thought was really telling, because the point of any kind of money management method would be to stress less about money.

So why do we continue to do it? This budget culture mindset, like diet culture, doesn’t work, and yet the blame continues to go on individuals. It says, “If you just try harder, or if you try this new kind of budget, this new method, then you will be able to achieve these goals.” But it continues to show time and again that that’s not true.

SE: You give advice that flies in the face of conventional personal finance advice, like possibly paying your rent or utilities late, or going to a food bank. You present these as reasonable options that a person might consider. How did you come to see it that way?

DM: I think that ties back to the diversity of perspective. From my experience, and the experience of people I’ve talked to who have lived in poverty or come from a working-class background--paying some bills late is just the way we live because we don’t have the cash flow to keep up with those things. It’s the same thing as the conversation about toilet paper. We can read articles all day long about how buying in bulk is the smarter thing to do to keep your budget, but if we don’t have the cash or access to credit, we can’t make that move.

So that came from my experience of understanding that sometimes I didn’t have the cash to pay rent on the first of the month, and I knew that if I paid it after the third or the fifth, I was going to pay an extra $50 or $100 as a fee. And so that was just part of my financial plan, because sometimes the money didn’t come in until after the late fee was added to the total.

Any financial advisor would say, “Pay your rent on time. Look at all this money you’re wasting on late fees.” But to me, it was like, “Well, I’m staying in an apartment. This is a way that I can do it. So it’s actually the smarter thing for me to do to have a roof over my head. I can just do this with my eyes wide open and know that that fee is part of it.”

And the same thing goes for taking on debt to get through your day-to-day life. And that doesn’t have to mean just putting food on the table and buying the necessities; it can also mean the luxuries and comforts that you need to exist in the world in a reasonable way. So if that requires you to use credit card debt and carry a balance and pay interest and maybe accrue late fees, you can do that just knowing that that is part of how you relate to money. Ideally, we can all get to a place where we’re able to earn enough money or have access to enough resources that we don’t have to deal with all these penalties, but so many people are starting way behind the starting line. I wanted to have a conversation that spoke to that experience, that said, “It is OK if you do this, and let’s have a conversation that helps you understand how the financial products and systems that you’re using and that you’re part of work so that you can make those decisions with a little bit more autonomy and control, rather than just trying to keep up with some arbitrary set of rules that don’t apply to your life.”

SE: I was recently working on a business piece and interviewing someone at a corporation, who was speaking to other people in other corporations, and he talked about the concept of working capital—if you pay your invoices 60 days later rather than 30 days later, you’ll have more working capital. As I was reading your book, it struck me that in business, they’re not tying it to morality. This conversation that was meant to just be between businesses was saying, “Just pay later so you’ll have more money.” But with people, it gets affixed to this heavy sense of morality. How did we come to equate saving money and paying bills as moral behavior?

DM: That is such a great example to show that contrast. If I said to my landlord, “I’m actually going to pay my rent 60 days after the first of the month because it’s better for my cash flow,” the way that companies do for us, people would think that is crazy. It’s just not an option.

I think there’s a power dynamic that says that what the people with power do is the right way to do things, and so we call that moral. And then what the people who don’t have power do is the wrong way to do things, and that’s why they’re in the situation they’re in with no power. And so, we call that immoral, or unethical, or just the wrong way to do things.

I think we judge the ways that people spend money and use debt because it helps us to see where we stand in the scheme of things. If you can judge someone else’s choices, it can help you feel like you are more in control of your choices. If you look at someone and say, “Well, the reason they’re losing their house is because they weren’t willing to work hard enough to make more money,” then you can feel like, “If I just work hard every day, my life is going to be okay.”

SE: That brings me to the idea of saving. Saving is always presented as this model behavior that we should all revere, and you don’t necessarily see it that way.

DM: I think there are always benefits to having some money for future purchases or for your future financial stability, but I think that our cultural approach to money is that saving really turns into hoarding in a lot of ways. And this might not be happening for everyone on an individual level, because we see statistics showing that most people are not saving a ton of money, but the mindset around it, I think, becomes much more like hoarding. So we are just thinking about how to get as much money as possible and how to hold on to it for as long as possible.

So when we say that the best moral thing that you can do with your money is to hold on to money, we start to be afraid to use money for its purpose, which a lot of people forget is to be spent to live a life. The reason that you save money is for a future purchase or for future financial stability, which means for spending in the future. When we frame it as just saving, it becomes much more of a hoarding mentality. It’s just hoarding money that could be put to better use in our own lives for more comfort or luxury. It could be given away, used more generously on a much broader scale.

We take that same mentality about paying taxes. People just want to accumulate money and not give any of it to the government where it could be used for a lot of social good. Like the end goal is to just have a lot of money.

SE: I am a saver, so this was interesting for me to think about. Am I just creating a stable future for myself ? Where is the line where it becomes just hoarding and greedy? So I really appreciated that. But when I was writing about personal finance, I saw frugality as being my rebellion against consumer culture. No, I don’t have to renovate my kitchen, just because all these forces are telling me to. How do you see that relationship between budget culture and consumer culture?

DM: There’s a lot of overlap between mindfulness and frugality in spending, and it’s really interesting to look at the differences. I’m so glad that you brought this question up, because consumer culture comes through marketing. It basically tells us that there’s some kind of deficiency in our lives and that we have to buy something to fill some hole and fix that. And budget culture turns around and trains you to see that that’s happening through marketing as a way to get you to spend less money.

So it’s really good to become aware that that’s happening, but then when the message is "become aware that that’s happening so that you can deprive yourself of something that you might have otherwise bought,” then it’s hard to know where the line is. Are you not buying something because you don’t want to consume something that you don’t feel like you need or want, or are you not buying it because you just feel morally superior for not buying something? So my message tries to find a balance between those things.

Mindfulness can help you be aware of the messages that we’re getting as consumers, which are constantly coming at us and telling us what we should be buying to have a better life. But instead of saying, “don’t buy it,” I’m suggesting that you use that information as a piece of data to make your buying decision. Budget culture just draws a really harsh line and says, “don’t buy it” in its simplest terms.

SE: Your book helped me see how my saving is connected to fear--fear that I will be old and alone and broke. But I don’t necessarily see a lot of obedience to budget culture when I look around me. I know a lot of people who spend freely and say that they don’t have anything saved for retirement. How does your book work for someone who … it’s not that they can’t save, they just don’t?

DM: This is where that insidiousness of a cultural paradigm comes into play. So it’s certainly possible that the people that you’re talking to have found that freedom from budget culture, and they are living and enjoying their lives and using money in the way that feels right for them. And I’m really happy about that.

I think there are also people who understand that they don’t want to make decisions based on the rules that budget culture sets for us, like hoarding money or restricting their spending, but they feel a lot of guilt and shame for that. So my book is largely for those people who know that what they’re learning from personal finance media or education, or just from cultural conversations at large, that the rules they’re being taught are not right for them, but they are still harboring this idea that they’re doing something wrong by not following those rules. This conversation is largely for them to say, “You are not doing something wrong. You are correct--something is wrong with this system, with this culture, and you can do the things that make sense for you.” That’s largely the message that I want to share.

SE: But we do need to save for retirement, right? Especially now because God only knows what’s going to happen to Social Security.

DM: You brought up the fact of "where’s the line--are you hoarding?" You have this fear of ending up old and alone and with no money, and we all do, because the system that we’re part of does not take care of people if they’re not working. And that is a terrible thing. And the only way we have come up with to deal with that is the individualistic solution of personal savings with a little bit of incentive from the government in the form of tax breaks. You have to decide for yourself what you want your financial future to look like, and we don’t have a better solution.

But my message is, when you’re feeling that fear of ending up old and broke, when you can’t work anymore, or you’re disabled and you can’t work at any point in your life, I think it’s really important to understand that that’s a problem with our financial system, our political system, but also more relevant to the conversations that I have, it’s a problem of the way we relate to money and the way we see money in our culture. And I think that perspective on money, that approach to money has to change in order to make these larger changes that we need to make to take better care of people in our society.

So yeah, there are some things we quote-unquote, “need to do,” because we don’t have another solution. You have to do what you have to do to take care of yourself. For a lot of people, that also means some restrictions in their spending. It means paying off credit card debt on time. It means paying their rent on time. I’m not sharing advice to just do the opposite of everything that budget culture tells you to do. I’m trying to share a different perspective and to expand the conversation so that people understand that if they’re struggling with money, it’s not because they’re not following this set of rules. It’s because the rules don’t make sense, and so you can do what you need to do to survive in the system, which might mean paying credit card interest or paying a late fee on your rent, without feeling shame and guilt.

But also, I think it’s really important to note that most people don’t have enough money saved for retirement, so just saying we need to save for retirement is a little bit irrelevant, because something like 80% of millennials don’t have enough money saved for retirement. Similar for Gen X, who are getting very close to retirement, and over half of even boomers, who are largely in retirement, don’t have enough money saved. So the system we have is not working for people, and just continuing to share that advice is not helping people.

SE: For somebody who wants to get themselves out of this budget culture mindset, whether they keep a budget or not, what is the best way to get started and rethink their relationship with their money?

DM: When you’re thinking about a financial decision, instead of looking to the experts to ask, “What should I do?” start to ask, “How does this work?”

When you ask, “What should I do?” you’re looking toward that set of rules, looking for someone else to tell you what you should do next. And when you ask, “How does this work?” you can inform yourself about how a product works, how some systems work, why the advice is what it is, and then make a decision that makes sense for you. You can educate yourself, rather than just look to an outside set of rules.

SE: In terms of educating yourself, people should get your book, which is great, and just a really enjoyable read, too. Do you recommend any other resources, since probably a lot of the traditional ones will give this budget culture advice? Or is it just a matter of reading that stuff, but knowing it’s probably going to be underlaid with this budget culture mentality, even though the actual facts in the stories might be accurate and useful?

DM: Yeah, some of both. The personal finance sites that I wrote for in the past give some really good, nitty gritty information about, for example, how mortgages work. But, like you said, just be on the lookout for embedded budget culture advice. So they might explain how a mortgage works, but then start to moralize about, “Well, if you take out a 15-year mortgage, then you’ll spend less interest, and that’s better.” So, I don’t think you necessarily have to shut out traditional personal finance media or education altogether, because there’s a lot of good information there. Just sift out the advice and understand where it’s coming from.

There are some great people who are starting to question the paradigm. My friends Jen Smith and Jill Sirianni just released a book called Buy What You Love Without Going Broke. They do the Frugal Friends podcast, and they’re not completely anti-budget. I love the way they talk about money, and I’ve learned a lot from them.

Money with Katie is a great podcast and newsletter. Katie Gatti Tassin is an amazing writer who also has a book that just came out for pre-order. She has a great wealth of knowledge about wealth-building and money management and how to be balanced with money, while also questioning the systems and explaining how our systems work.

And if you check out my newsletter, Healthy Rich, I’m always recommending anyone I come across, because I love seeing people brought into this conversation.

The full recording of this conversation is available for paying subscribers HERE.

How has budget culture affected you?