6 min read

How to create a budget that works for you

How to create a budget that works for you
Photo by micheile henderson / Unsplash

I wrote this post sometime last year. Now that theviewfromjq.com is up and running, I'm sharing it from the vault!

To be transparent, this approach worked wonders for me in 2022, but amidst the chaos of 2023, I didn't quite follow it. Today, I'm planning to review my 2023 spendings and revisit my budgeting process. Sharing this post feels like a good first step in that direction!

At the age of 8, my family immigrated to America with limited financial resources. I remember at a young age, complaining to my parents that all they do is worry about money. At the same time, I also remember having a strange awareness of the impact money can have on your life.

I distinctly remember getting into trouble for distracting my dad at the grocery store checkout, causing us to get double-charged an extra $1.79 for a bottle of Snapple. I remember that time in middle school, not being allowed to go to the carnival with my friends, because $20 to ride a ferris wheel and eat funnel cake was an exorbitant expense. I remember thinking it was crazy that anyone would ever shop at Target, considering you could purchase the same items at Walmart for so much less.

Yet when I got my first real job, I found myself struggling with a lack of knowledge on how to effectively manage my finances. I didn’t know how much I could spend, how to save, or how to invest for the future. I didn’t know how to make sure that money never became an issue for me, so for years, I worried about money.

I panicked about questions like:

  • Will I be able to support my family and provide for my future children?
  • How do I achieve financial independence and retire early, like these people?
  • Where should I be allocating my money, so that I am spending and saving in a way that aligns with the life I aspire to live?

I don't have all the answers to these questions, but after years of struggling with them, I have found a way to create a budget that works for me.

As a Google software engineer living in Manhattan, who grew up as a first-generation immigrant, here is how I budget:

1. Gather data

Start your budgeting process by gathering data on your current spending habits. There are a couple of ways to do this:

  1. Manual: Download spreadsheets from every checkings, savings, credit card, and investment account, and combine them into a comprehensive picture
  2. Automated: Use a service like Mint or Simplifi.

Once you have about approximately 3 months of data, bucket that data into these groups:

  • Monthly Income: Amount of money is deposited into your bank account, after deductions like taxes and health-insurance
  • Monthly Fixed Costs: Consistent, predictable expenses that don't vary from month to month. Examples include rent, phone bills, WiFi, and subscriptions.
  • Monthly Variable Costs: Costs that are roughly the same each month. Examples include groceries, Lyft/Uber, laundry, and subway fares.
  • One-time costs: For example, vacations, classes, annual subscriptions, or gifts for friends and family. 
  • Savings: Money set aside for savings, investments, and 401k contributions.

2. Align with your values

Once you have this data, take some time to figure out if your spending habits align with your values.

A common challenge with budgeting is information overload. Rather than focusing on knowing everything, I’ve found success in identifying what truly matters to me. I focus on making sure I allocate money towards things that reflects these values. 

I firmly believe that money can buy happiness, and people claim otherwise are just buying the wrong things. Here’s where allocating money brings me joy:

  • Saving: Investing in my savings makes me happy, because it gives me confidence in the workplace. I like knowing that I could lose my job or walk away at any time, and I would be perfectly okay and have time to get back on my feet. Having this financial safety net also helps me take up a little more space at work, in areas where I tend to play it small.
  • Learning: I willingly spend on books and classes, and optimize my credit cards for these benefits. For example, with my Amex Platinum, I get $20 cash back per month on Audible, which gets me ~2 books for free per month.
  • Traveling: I love to travel. For the last few years, I’ve spent a lot of my time and income wandering the world. I have both Amex Platinum and Chase Sapphire Reserve credit cards to optimize for lounge access, hotel upgrades, and other travel perks.

Yes, the credit fees may seem high, but for my spending habits the returns have made sense. This article might be helpful for evaluating if these cards would work for you too. If so, here are my referral links (Chase Sapphire Reserve, Amex Platinum) 😉 

3. Change your spending to match your values

Now that you have a clear understanding of your spending habits and values, it's time to make a conscious effort to align your spending with what matters to you!

That goal may seem obvious, but how to do that may be less so. Here are some practical ways I've adjusted my spending to align with my values:

  • Takeout: My partner and I used to spend a lot of money on takeout. We decided this was not serving our finances or our health. We now coordinate meals, prepare large batches of food on the weekends, and opt for frozen meals or prepared foods when we are feeling lazy
  • Nice furniture: We buy most of our furniture off Facebook marketplace and Wayfair, and avoid investing in new or expensive furniture. We know that we will likely move again one day soon, and by appreciating and adapting to what we have (even though I would love to have my friend's beautiful $2,000 couch), we have found budget-friendly ways to make our living space cozy for us.
  • Laundry: Like most people, we dislike doing laundry. But we mostly also opt to do our own laundry with units available in our building.

4. Automate and review regularly

After months of trial and error to figure out what works for me, I adjusted my paycheck allocations to match. Here's my system to channel funds into various accounts every month:

  1. Wealthfront (Savings): High-yield savings account for my emergency fund
  2. Ally Bank Checkings: Joint checking account for shared expenses with my partner
  3. Schwab Checkings: Checking account for my personal spending. I like Schwab because there are n0 ATM fees to take out cash when you are abroad.
  4. Wealthfront (Investment): Investment account for whatever is leftover

Once a month, I re-gather data on my spending and saving habits and re-align with my values, to make sure my assumptions are correct, and that my spending and saving are serving me in the best way. I do this using a combination of a personal script I wrote and Simplifi (this costs money, but I think it is worth it for me. Mint is a good alternative that is free.) The script and Simplifi basically do the same thing, but give me two different angles for review.

Every month, I check to make sure the assumptions I made in my allocations are still correct.

5. Budget to live, don’t live to budget

I’ve put a lot of work into my budget, not because I particularly enjoy budgeting, but because of the peace of mind it gives me to enjoy the rest of my life.

Knowing where my money is going through this budgeting system has helped me stop worrying and given me the freedom, financially and mentally, to just live my life. 

I believe this freedom is ultimately what budgeting is all about. The goal isn’t about creating the perfect budget. It is about creating a system that brings you joy, about having the freedom to not worry about money all the time, because you know for sure that you are spending and saving money for the things that make life really meaningful for you. 

Everyone’s mileage is going to vary, but if any of the services I use work for you, here are my referral links!

Credit Cards

Budgeting Apps

Here are some good budgeting apps:


Here are some people I have found helpful :

  • Jen Lu provides financial coaching, and shared this template in a talk my friend went to that is a useful framework for thinking about budgets
  • Erika Kullberg has a really great YouTube channel and Instagram account
  • Erin Lowry wrote Broke Millennial and has a newsletter 
  • The Mad Fientist provides useful resources about financial independence