Copilot Money vs. Mint

While I was always a Mint purist (“And if it doesn’t work for you, you’re just not trying hard enough!” I’d say when people would tell me it just wasn’t working), the more my recommendation was met with hesitancy, the more I felt compelled to find a solution for budgeting that would do for spending what Betterment did for investing. I was on the hunt.

My friend Richard is a quintessential Silicon Valley tech buff (a 2x start-up founder, no less), and when I told him about Money with Katie, the first thing he said was: “Cool! Have you ever heard about Copilot? All my friends love it. The UI is fantastic—one of the founders was a software engineer at Google.”

I downloaded it so quickly, my App Store almost crashed. Then I saw it: the price.

“Aw, man. This costs money? Shit. Never mind.”

But I noticed the demo mode, and it was enough to pique my interest. I played around with the dummy data and immediately felt envious. Then, a few months passed, and curiosity finally got the best of me. I didn’t want Copilot Money to be the one that got away.

Now, five years later, I’m especially glad I didn’t let my cheapness get the best of me. Not to brag, but I’ve categorized 7,121 transactions (more on that below) since I began using Copilot Money in 2020:

And, as longtime budget freaks will know, Intuit shuttered Mint at the end of 2023.

How to budget, generally

While it may be obvious, I want to make sure we’re on the same page here: I don’t use the budgeting app to decide what my budget should be (though Copilot Money will analyze your spending and give you accurate estimates for each category, including recommendations about how you should reallocate funds based on your actual behavior).

I used my Wealth Planner to make my spending and investing plan for the year, and then simply create identical groups and subcategories in Copilot Money so the app will automatically track my every transaction. (Doing this manually would be nightmarish, as I have a metric shit-ton of credit cards and accounts, as pictured below.)

You could definitely create and manage your budget all in one place using Copilot Money, but I like to have my own records as well. At the end of the month, I record the category totals in my Wealth Planner for accountability and record-keeping. The Wealth Planner is built to give you end-of-month and end-of-year summaries, because data is sexy and makes you rich. Obviously.

The system, when working together, might look something like this. On the left, you’ll see my high-level goals for food spending in my big financial plan in the Wealth Planner, and on the right, you’ll see every restaurant transaction being captured.

A Quick Guide to Copilot Money Transactions

The software is very smart and can generally tell with ease what a transaction is—whether it’s a regular expense, income, an internal transfer (like when your checking account pays off your credit card bill; that’s money that’s already been accounted for as ‘spent’ by the credit card transactions), or a recurring bill.

• “T” — If you see a little “T” inside a square next to the transaction, that was an “Internal Transfer.” You moved money from one account to another.
• “I” — Income. This is interest earned, income earned, or else other money that came in that the software recognizes as net-new.
• “R” — Recurring bill (more on how to set those up below).

You can also Exclude purchases from being counted, which I do with business expenses. (Just tap the transaction itself, which will open a little drawer where you can see details—tap the Category, and on the far left, you’ll see “Exclude” as an option. If you choose that, it’ll vanish. If only actual spending were that easy.)

How to Set Up Your Copilot Money App

I had heard Copilot Money was really “smart”; that it was a budgeting app that understood real life.

But I have to admit, when I first started syncing all of my accounts (which, by the way, were all available in the app with the exception of my obscure HSA fund), I was a little overwhelmed. Months of unrefined data poured in, and I had a brief moment of panic: As someone who checked, categorized, and combed through her Mint data multiple times a day, seeing the last year of my life begin to populate willy-nilly in the app freaked me out and I almost aborted the mission.

I’m so glad I didn’t.

The first thing that I had to do (after syncing my accounts) was begin correcting or approving Copilot’s estimates. Most of them were freakishly spot-on, but some of them required additional tweaking on my part. I noticed that normally happened for categories where I paid for something and then got reimbursed for someone else’s half (think utilities, groceries, rent, etc.). The estimate would guess double my actual out-of-pocket cost because the transactions themselves were twice as big.

Because I had already built my overall spending plan into my Wealth Planner, setting it up in Copilot was as easy as adding new spending Categories (and grouping them). Here’s what some of mine look like now after many iterations, as of December 2025:

Copilot Money’s Venmo Integration

The good news? If you’re someone who gets reimbursed via apps like Venmo a lot, you can connect your Venmo account so transaction names and amounts will populate like they would in any other account. (Here are some FAQs about how the Venmo integration works; the TL;DR is that you set up email forwarding for Venmo receipts within the Copilot app and that’s how it pulls the data in.)

Recurring Transactions

Another nice feature is “Recurring Transactions,” which analyzes your data to determine (a) what your recurring charges are and (b) when they happen. Then, it builds it into your spending already at the beginning of the month as if the money has already been spent—that way you don’t go on your merry way through your month thinking you’re hella under-budget only to be surprised by your $160 electric bill on the 21st and blow your own lead.

While setting the actual budget amounts and making sure all the Recurring charges took a little time (probably about half an hour), I’ve been really impressed at how easy it’s been to keep up with and how little ongoing effort it takes. Each Recurring Transaction gets marked with a little “R” in the app. The only Recurring Transaction I use currently is for my rent payment, which happens on the 1st of the month:

Something silly that I’ll admit I loved about Copilot Money: Personalization

You can change category names, colors, and emojis really easily. And while it’s silly to admit, I really liked that aspect of the personalization. Everything works the way you expect it to: Want to change something? Just tap it. Options pop up. It’s not hard to operate, which is crucial for an app that facilitates something as painful for some as budgeting. There’s a level of whimsy to the product and nice haptic feedback (when you tap something, you get a gentle jolt of recognition) that makes regular use of this app a joy.

After You’ve Set Up Your Copilot Money App

Understanding the Tabs You Swipe Between

I quickly got to know the major sections of the app because they make really good use of all the real estate. You can move them around based on what you use most often, and my lineup is currently:

• Cash flow, where you’ll see your net income for the year (super addictive to check, if you’re a psycho like me), which you can easily compare to years prior
• Dashboard, which I’d consider the homebase, where you can see a visual for your spending month-to-date, your budget overview (overages are highlighted here), upcoming recurring payments, and income to date — this is where all new transactions that need to be reviewed will appear, so you’ll probably spend most of your time there
• Categories, which is where your budget categories are listed and the “Spent” amount is tracked against the budgeted amount
• Accounts, where you’ll see all your synced accounts and your assets and debt — this is also where you’ll see your net worth at a bird’s eye view
• Investments, where you’ll see your investment holdings by ticker — the cool thing about the “holdings” section of the Investments tab is that if you own the same security across five accounts, it’ll aggregate your total equity here (pictured below)
• Transactions, where it tracks each and every transaction in a simple ledger
• Recurrings, which we’ve already discussed
• Goals, which is actually a feature I haven’t personally used much because my savings goals are automated in my Wealth Planner and I don’t really think about them anymore

And because you pay for Copilot Money, they don’t have to advertise to you—so every section of their app is actually useful and “real,” with no noise from sponsors or ads.

How to Use Copilot Money in an Ongoing Way: iOS, MacOS, iPadOS, and Web

I might be a unique case study since I f***ing love tracking my spending, but I use Copilot like it’s Instagram now. I’m in that shit constantly. I checked my screen time report, and it’s consistently clocking in as one of my top 5. What can I say? I told you I liked data!

When you open the app, it pulls up the dashboard and highlights transactions that have happened since you last logged in, organized by day. You can click “Mark as Reviewed” to let the app know you’ve signed off on them. It’s pretty slick. I’d guess that about 20% of the time, I have to recategorize the transaction, but that takes all of 8 seconds to click the category and select a new one.

Copilot Money is available on…

• iPhone (where I use it most)
• iPad
• Mac (if I’m sitting down to update my Wealth Planner at the end of the month, I’ll usually use the desktop app since it’s bigger and you can see more at once)
• And, recently, web!

That’s something I appreciate about their team: They push new features thoughtfully, and when I get a notification something new is coming, I know they’re going to overdeliver.

Smart-Rebalancing of Your Budget: Why Copilot Money is Good for Beginners & People New to Budgeting

Let’s say you’re relatively new to the magical world of personal finance and you’re still getting your arms around what your typical spending looks like. The Rebalancing feature essentially uses your actual behavior to determine the most optimal way to shift your budgets, but without changing the total amount spent. It reallocates the dollars to the categories where you’re actually spending money, which improves accuracy over time.

To have Copilot Money rebalance for you, just tap the little magic wand icon in the lower righthand corner of the “Categories” tab, and you’ll see what it suggests based on your spending that month:

Notifications

I’m a freak about notifications most of the time (I turn most of them off), but with banking apps, I’m really paranoid ever since my identity was stolen in 2019. Copilot’s notifications will alert you to any suspected fraud activity right away. I went ahead and gave them full permission to send me whatever they wanted. Blow me up, Copilot. Give me your worst.

It was a “green checkmark” spree as I went through my notifications settings, and I’ve been pleasantly surprised at how respectful the notifications are—I actually don’t feel like I’m getting blown up at all. I tried to go back in my Notification Center to screenshot a sampling, and there weren’t any there…because I’ve clicked on every single one. Clearly, even in the fugue state in which I typically use my phone, I’m entranced enough with the notifications that I engage with them.

Usually, they pertain to spending updates, categorizing new transactions, or letting you know you got #paid.

Is Copilot Money Worth the Cost?

All right, people. Back to the elephant in the room. The original reason I was almost #out on Copilot Money was because it costs money. It’s $13 per month (or, as college Katie would say, two burrito bowls) if you subscribe monthly, or $7.92 per month if you subscribe for the year upfront.

Because I’m a #moneyblogger, I decided upfront it was market research (and therefore a #BusinessExpense! Thanks, IRS). But after using it, I wholeheartedly believe it’s worth the expense, especially if it finally gets you to interact with your spending and track your budgets on a regular basis.

Try Copilot Money for free—use the code KATIE2M at checkout to extend your free trial to two full months, so you can take it for a true test run, free of charge.

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Copilot Money has been a sponsor of the Money with Katie newsletter in the past. They had no input in this particular blog post or the opinions expressed herein.

I heard from a reader the other day who’s in marital gridlock about the best way to manage their newfound high income. When they earned less, she said, they were in agreement about their strategy: They used dedicated savings accounts for discretionary purchases and a rollover strategy, in which each category had a monthly limit. If they ended the month under-budget, they rolled the money forward for next month, and if they went over, another category had to pick up the slack to compensate.

Slick, no? This system served them flawlessly for years, she said, and now, they’re earning nearly $100,000 more per year. Amazing! 

Except…introducing more money to the picture has them pulling in different strategic directions.

To her, their monthly boundaries and sophisticated rollover system give her the mental freedom to spend within those parameters guilt-free. 

To him, the categories feel like arbitrary limits now that their income picture has changed, and he’s advocating for the elimination of their system in favor of something a little more loosey-goosey. 

She feels like ripping off the training wheels will send them down a slippery lifestyle creep slope, and they’ve been in financial stalemate for months, unable to reach consensus.

It’s fascinating because the disagreement surfaced when they started managing more money, not less. Mo’ money, mo’ problems indeed, Biggie. But her email jumped out at me because it struck me as the quintessential challenge of navigating something as personal and psychological as money with another person. Two people who have traversed much ground together find themselves at a standstill because they perceive the same thing—boundaries—in opposite ways.

Her message also made me reflect on how my own approach has shifted over the years.

Is your budget retroactive or forward-looking?

It’s a subtle distinction, but a distinction nonetheless. And if you’re like, Listen, Katie, that’s cute, but I don’t have time for personal finance, much less NUANCE, hear me out: Retroactive budgets merely serve a record-keeping function. On the last day of the month, I review all the spending from the last 30 days and write down how much we spent in each category. 

The budget isn’t really prescribing behavior to me; I’m not checking it before I go out to dinner to see if I can afford an appetizer or not. I have a plan, of course; I’m not a heathen! But I’m not really referencing the budget as I make decisions. 

On the flip side, if your budget is forward-looking, you’re treating it like a recipe. “The envelope method,” a budgeting technique that recommends taking out physical, paper-ass cash and putting it in actual envelopes to avoid overspending, is the most literal manifestation of this technique. 

I prefer the former method, because I don’t like being bossed around by a spreadsheet. But I didn’t always approach my spending retroactively—there was a time when those stricter limits were necessary, when my margin really was slim enough that I’d consult my precious spreadsheet before I bought concert tickets or took a stroll through Neiman’s. It was too challenging to eyeball purchases without close, categorized guidance.

But after a certain point on my income journey, it was clear the limits had outlived their utility. If I spend $20 instead of $10 on lunch, my financial future isn’t going to implode. 

Now, that level of granular data serves only to either confirm or deny whether we’re hitting the overall target: our savings rate, which ladders up to our financial independence goal. 

There are basically only three metrics that matter in my financial life now, so I put them front and center in each monthly tab in my Wealth Planner: how much we’ve spent so far, our savings rate, and our progress toward financial independence. The rest exists only to fuel the accuracy of these metrics and to help make realistic projections for the future. 

This is especially helpful when you have an irregular income or recently started earning more. We might earn a lot in one month and not very much in another, and our spending varies a lot less than our income. Zooming out smooths the bumps month to month, and alleviates the sense that boundaries are artificial, arbitrary, or meaningless. 

As I reflect on this reader’s conundrum, it occurs to me that these types of questions arise most when our circumstances have changed but our goals haven’t; a sign we might need to recalibrate. Now that they have almost twice as much income, this couple probably should revisit where they’d like to spend more. They might find that as long as they’re hitting an overall savings target for the year, the rest of their cash flow is fair game to spend however they’d like. 

Having been pretty #InTheWeeds with our finances throughout the year as the member of our household who fills out our Wealth Planner every month (and, you know, what I do for a living), I was mildly skeptical that going through the motions of presenting this information to someone else would dredge up any interesting insights. 

But as Nick Saban will remind you…trust the process. 

Here’s the executive summary:

• Our net worth grew by 50%. 

• Our most over-budget category grew nearly 3x this year (as in, we spent roughly three times what we had planned).

• We’re going to be financially independent in three years! Maybe!

The difference a bull market makes

One of the major findings right away came from pulling a slide from last year’s report: In 2022, for every dollar we contributed to our assets, our net worth grew by just 67 cents. This made it feel as though every dollar we dumped into the pile promptly caught fire and lost 33% of its value.

This is, of course, because the whole of our assets were getting incinerated in the worst bear market since 2008, and our new additions weren’t enough to compensate. In 2022, our new contributions made up about a quarter of the total value of our entire net worth. 

Not exactly an encouraging environment for saving, but we stayed the course and pulled through—and this year, we were rewarded. 

In 2023—a year in which the S&P 500 has returned an astonishing 24% (as of this post’s publishing)—our overall assets grew by 51%. This amounted to three times the growth we saw in 2022. 66% of the asset growth was thanks to our contributions, and the other 33% was purely the market going up. 

Seeing back-to-back years with wildly different outcomes is a little disorienting, but a word of feedback to the animal spirits: I much prefer 2023’s vibe, thanks!

Takeaway: Sticking to your investment plan—regardless of whether you’re seeing red or green in the markets—has always* paid off. 

When you tweak your budget to perfection, sometimes your bad behavior just goes underground

Ah, just when you thought the entire reflection was about to be a KGT Victory Lap…think again!

No, when it comes to the things I actually had control over (read: my spending), the grade was decidedly less glowing. We spent a total of $157,190 in 2023. I know! I already know what you’re thinking. What?! $150 big ones? But hear me out. Your honor, in my defense, I was having a good time.

And by having a good time, I mean…

• Moving our entire life 1,000 miles west to California. 

• Paying for multiple surgeries and procedures for a dog with bone cancer.

• Going to see Taylor Swift…and the Taylor Swift movie…and then seeing the movie again…(I better have my own slide on her financial annual review.) 

• Oh, yeah, and buying a Porsche Macan—understandably, the biggest item. 

We also traveled to…

• Vail, Colorado

• Dallas, Texas

• London, England, and Edinburgh, Scotland

• Los Angeles, San Francisco, and Sacramento, California

• New York City (five times for work, though the Brew paid for this—I’m still including for travel street cred)

…and, I’m sure, approximately six other places I can’t remember right now. Point is, we were living, baby!

Despite all the above hoopla, the majority of our spending plans actually went…well, according to plan. As in, we intended to spend that much (okay, not quite that much, but it wasn’t an order of magnitude above our goal). 

It’s funny—as the year progressed and I lived the spending, Travel was the category that I expected would be heinously over-budget. But it was only 8% over. Not bad.

On another note, I’ve mentioned it no less than six times this year, but we were really focused on wrangling our food spending in 2023. And we did! I learned to cook, and our food budget and health are happier for it. We ended up 7% under our planned spend for that category.

Where things really went off the rails was the lawless wasteland of the Miscellaneous budget, which encapsulates our respective “Guilt-Free” categories and Gifts. Turns out, we both need to feel a little more guilt. 

*Insert drop of Thomas going, “Wait, why are we spending so much money?” here.*

This category represented 16% of our total spent for the year—we spent more than double (closer to three times) what we had intended (see also: Taylor Swift, moving cross-country, buying a car, etc.). 

This, of course, presents a pickle for me, because unlike a food or gas budget gone awry, “Guilt-Free Spending” requires a little bit of deeper digging. It’s a category that, when you really get down to it, can only be shrunk by having a little more self-control. To quote that twenty-something in a TikTok I shared recently… “I need to (re)learn how to tell myself ‘no.’”

Takeaway: The best types of budget breakthroughs are the kind that leave you staring at yourself in the mirror, going, “It’s time to find some cheaper hobbies.” 

*Crosses “Porsche collector” off list….for now.*

Now, for some (more) good news: Despite our shortfalls, we still beat our savings contributions goal by 13%

Not because we were miraculously under-budget elsewhere (we weren’t), but because we ended up earning more this year than we had anticipated—and for that, I would like to thank the kind folks with wonderful taste at Penguin Random House. 

Our current net worth could support a retirement lifestyle that costs $72,000 per year. Not bad! (But…well, too bad, because *checks notes* that’s less than half of what we’re spending right now.)

When I revealed this #FunFact to Thomas, he goes, “Wait, you’re telling me we could quit work forever if we just spent less than $72,000 per year? Wow, that’s tempting…” I reminded him that would mean moving somewhere cheaper, traveling a lot less, and living a life without a dog or children, and he reconsidered his enthusiasm.

It does make me chuckle that my financial bad behavior seems to be playing a game of Whack-A-Mole: I manage to cut it out with my food spending, but what do you know? There’s a lot of other fun stuff you can spend money on that you don’t eat. Check and mate, Katie. At least my vices are legal (for now).

Still, the most exciting learning from our breakdown was that we’re expected to become financially independent (should the animal spirits receive and honor my suggestion box entry) in approximately three years, which means—if history repeats itself—I have 36 months to promptly triple our spending again and go, “Oops! Just kidding!” Maybe this is my subconscious sabotaging me because I know my life would be less fun without work. 

Takeaway: There’s more than one way to brush a cat (we don’t condone feline violence on this site, per Sam Cat). 

Looking ahead, we’re *ahem* making some changes

The first major change is I’m going to stop spending my “guilt-free” money like a dinosaur who sees the asteroid in the distance. I will not be buying a luxury vehicle in 2024, and I’m also going to reinstate my old fire-and-brimstone approach to budgeting to get it back on track (e.g., if you’ve already spent your allotted amount, you’re waiting until next month).

The second (and more fun) change is the addition of my “Development” category. I haven’t quite decided on the allotment—partially because I’m hoping some of it can be a business expense— but this will be inclusive of things like an editor/writing coach, potentially an executive or business coach, an online membership to The Class, and other things that’ll #enrich me as a human. Hell, maybe I’ll throw piano lessons or a Spanish tutor in for good measure.

I keep insisting to myself that 2024 is a year of “leveling up,” which means continuing the good habits I began in 2023 and refining them further by investing in my professional and personal growth. Because, as I recently learned, there are two ways to reach a savings goal…and it turns out one is a little more fun than the other.

If you enjoyed this year’s financial reflection, don’t miss last year’s distinctly more emo one about realizing that pursuing financial independence was a sign of a quarter-life crisis (albeit of a more productive variety than the kind that causes you to cheat on your wife and buy a Camaro). 

At the end of that piece, I suggested I was going to try to care less about money and enjoy life more in 2023. Well, Katie, good news: mission accomplished. And for the record, the last-minute T. Swift tickets? Totally worth it. 

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*Past performance is not indicative of future returns, but you knew that already.

This commercial holiday was no doubt invented so people could stock up on gifts for the actual holidays, but at some point, Black Friday morphed into something else: It’s now an event for purchasing the on-sale version of whatever practical items you’ve accumulated on a list all year long. (Never mind the fact that many of these “deals” are fake.)

Unleashing your pent-up desire in one discounted frenzy, the sense is that you better not miss your chance to upgrade your kitchen knives or replace your comforter, because Lord only knows the next time the “sale” will be this good. A frenetic online treasure hunt ensues.

Competing bargains (or, more accurately, regular prices masquerading as bargains) parade through your browser—in inboxes, in popups, in your algorithmically brilliant social feeds. Tabs mushroom across the top of your screen; you become disoriented. Wait, where did the parka go? Didn’t I just have the parka pulled up? What color? Oh, that reminds me, I needed to order new gloves…but what material? Hm. More tabs!

It reminds me of a scene in Stuart Little 2 that—because of the snort-laughs it elicited from my mom and dad in the theater—was embedded in my 2nd grade memory. “I still feel bloated,” Snowball the Cat complains aloud. He approaches his bowl and concludes: “Maybe more food will help.” This encapsulates my confusing, dopaminergic relationship with consumerism.

Our material desires do not sprout from spontaneous generation. Lists upon lists proliferate online with “ideas” for what to purchase; guides to the retail tsunami disguised as fun for the whole family. You don’t know what you want? they seem to say. Here, let us help! 

We may be navigating a challenging economic landscape, but our consumption habits for the things we don’t need sure aren’t helping. Take our relationship with what we wear, for example: Americans today reportedly own five times as much clothing as they did in the 1980s (never mind the fact that the remote workers among us leave the comfort of our homes as little as possible). This is due, perhaps in part, to the social contagion of online trends, with turnover rates higher than the underpaid wage laborers employed to supply them. It’s estimated that influencers sold $3.6 billion of product through LikeToKnowIt (or LTK) in 2022, a platform used to monetize recommendations. According to a 2020 Princeton review, the fashion industry consumes one-tenth of all water used industrially, and 57% of discarded clothes end up in landfills. 

And while I’m often irritated at the suggestion that individual consumers are to blame for the amount of waste involved, it’s hard to deny the economic reality: The more we buy, the more they’ll produce. “Yes, individual choices matter,” Jag Bhalla and Eliza Barclay wrote for Vox, “especially if you’re affluent.”

I know, I know—Stop lecturing me about climate change, Katie, can’t you see I’m tired? Let me enjoy adding another pair of fleece-lined leggings to cart in peace! 

And hey, I don’t mean to rag on the post-Thanksgiving tradition of mowing down your fellow woman for the last pair of size 6 joggers. My point is merely that disengaging with consumption culture isn’t something we should do out of pure altruism, but because it’s not actually fun. 

It’s a part-time job we pay to perform. Forget about consumption—it’s choresumption. 

In that sense, a worldview of ascetic frugality feels like a hall pass from this chaos. A sale on stuff you don’t need anyway is no longer cause for interrupting your day. This, I think, was my favorite thing about my initial embrace of the FI/RE mindset: There’s quite a bit of marketplace noise that goes serenely quiet when you want nothing. You’re liberated from the time-consuming commitment to constantly scour the marketplace for something that might make your life better (and, by extension, to find it as cheaply as possible). 

On the opposite side of the spectrum, finding yourself in a position of financial strength where you don’t feel compelled to shop sales—instead buying the few things you need, when you need them, and moving on—is similarly peaceful. It’s just a happy coincidence that embracing the former philosophy often fuels your ascension to the latter.

But the pull of this messy middle, this frantic consumption for sport—where the thrill of getting 10% off a KitchenAid obfuscates the fact that you didn’t need a KitchenAid—feels especially bleak and miserable this year. A sale is, after all, still someone trying to sell you something.

It’s a sleight of hand—save money by spending it!—that feels so cheap, so degrading. Ultimately, it adds another “to-do” to an already-unmanageable list. “I hate shopping,” my husband said from across the room during the Cyber Weekend marketing blitz, staring dejectedly at his laptop, “I never know what to buy.”

The implanted assumption that we should be buying things bequeaths us with another problem to solve: You now must figure out what.

But hey, if you must buy something, I have a suggestion.

Reversing lifestyle creep

It’s notoriously hard to taper back a budget category gone rogue. 

Now that 12 months have passed since that unfortunate discovery, I’m pleased to say we managed to get a grip on it: We spent an average of $1,725 per month on food in 2023, or around $862 per person. (When adjusted for food inflation, the equivalent of my “$606 per month” 2021 food spending today would be $751.)  

This will work out to around $5,000 in additional savings for the year, which might not be life-changing money in the grand scheme of things (though, who knows, given the magic of compounding)—but the real value of these changes took me by surprise.

My love of outsourcing is more complicated now

Sometimes the most financially “efficient” choice is worse in a way that’s hard to put your finger on. Even though outsourcing all of our meal prep to someone else might technically be the “optimal” choice (because it frees up the time and brain bandwidth for…more work), there’s something that feels so right about the very human ritual of feeding yourself. The top comment on this viral Reddit thread explains: 

“[Outsourcing everything is] an easy trap to fall into as it is so very sensible: Why would you spend six hours cleaning (doing a chore you hate and doing it badly) if you could just work an additional hour and outsource that? So you hire a cleaner. And a cook, a personal shopper, an interior designer and a nanny. 

But if you don’t watch out, all your little self worth eggs, so to speak, are kept in the same work basket—and, step by step, you start to live the life of a stranger. You eat the food of someone else, wear the clothes of not-you, in an apartment that might as well be a hotel room, with kids that are more attached to their nanny than to you. Your vacations are glamorous, but there’s little connection to anyone or anything in them.

[…]

What I am getting at here is: Watch out. It may be easier and more worth it to develop an interest in cooking or join a sports club or a gym that you like. But also: Screw cleaning.”

Do I contradict myself? Very well, I contradict myself. Sometimes you think more help is the answer, and other times you realize it’s the problem. Sometimes saving money is the wisest thing you could do and other times it’s the most foolish. Real life resists neat characterization and broad generalities. That’s the beauty of it. (And I might add: There’s no way to chronicle your thoughts online for years without changing your mind, and those who remain too on-message for years just aren’t being honest.)

I’m glad I experimented with outsourcing this area of my life. It showed me that I actually do value the tactile creativity that cooking provides, and most days, I need the countdown of the dinnertime clock to pull me away from my computer. 

I wasted years telling myself I didn’t know how to cook, instead of just learning how to cook

And learning how to cook made me feel more self-sufficient. My process is relatively simple:

• I shop at Whole Foods because I like its meat and produce sections, and ordering online for free pickup is fast, easy, and prevents throwing a bunch of random stuff in the cart. What can I say? I’m loath to admit it, but Jeff Bezos & Co. are good at the whole grocer thing. (I’m sorry, Henah.)

• We eat dinner at home between five and six nights per week, and will get takeout on the “off” nights (which are often Fridays; when I was a kid, we always got pizza or Chinese food on Friday nights so the neural pathway associating “junk food” with “Friday” in my brain has long been calcified).

• After working with a nutritionist and trainer this year to learn how to properly fuel myself (shout-out to Andrew and Kat of Alta Fit for Life!), I prioritize protein, fat, fiber, and vegetables wherever possible in my meals, and try to minimize simple carbohydrates and refined sugars. 

• Healthy snacking is expensive but worth the money. I’ve been eating a lot of cottage cheese (the “Good Culture” brand), Chomps meat sticks (can’t write that one with a straight face), and RXBars (the chocolate sea salt flavor) recently. 

• Right now, we’re loving a peanut chicken ramen dish (super cheap; here’s the original BudgetBytes recipe), a Korean ground beef dish with cucumber salad, cheeseburgers with butter lettuce for buns, and miso salmon on ginger rice.

Still, I’m a little nervous about what my 2023 spending will reveal to me

…because I have a feeling it’s going to lay bare the fact that I’ve allowed my fixed costs to creep higher, and those are a little harder to unwind than a greasy Five Guys habit. 

Regardless, now I know I’m capable of reversing lifestyle creep…and that, in itself, is a bit of a relief. 

The impetus was the realization that my financial life was becoming increasingly complex. I was having a hard time wrapping my head around the wheels that were turning in the background, and I wanted to illustrate how money was flowing through the system.

At the time, I had four (sometimes unpredictable) sources of income, a maximum 401(k) contribution, and a lack of a true “emergency fund” savings account, thanks to a taxable brokerage account product from Betterment called a “Safety Net” that I used instead.

To help make my holistic financial picture a bit clearer, I envisioned a visual exercise to put it all to paper. Out came the colored highlighters, and on came the lightbulb above my head. 

I give you: The “money mapping” exercise. If your financial situation is complicated to the point that it becomes hard to keep up with (like how mine was), it’s worthwhile to take the time to streamline the way your money flows through your financial system. Here’s how to make your own, where the name of the game here is simplification. 

My 2025 Update

I didn’t re-draw my old system, but things have gotten progressively simpler despite adding another whole human to the mix in 2021 (hi, Thomas). We now have:

• Two sources of income (100%)

• …that first pay taxes (subtracts 23%)

• …and funds my 401(k) and HSA, and Thomas’s TSP (the 401(k)-style account that military members have) (subtracts another 10%)

• …then the rest flows into our joint checking account (the remaining 67%)

• …which pays our rent and our four primary credit cards each month (my business card, my AmEx Platinum, my AmEx Gold, and Thomas’s Chase Sapphire Preferred) (call it somewhere in the 22% of total ballpark)

• …and then funds our joint taxable brokerage account with what’s left (around 45% of total ballpark)

See? It’s way more fun with highlighters.

Start with income:

Sometimes we introduce more complexity slowly over time as our financial lives morph and grow around our habits. You know how it is: You start paying rent out of one specific checking account because it just so happens to be the one set up for withdrawals. Then, you open a new checking or savings account elsewhere, but still need to funnel money back to the old one to pay the rent, and, and, AND…it slowly becomes an unwieldy mess.

Of course, some people like to maintain a bunch of accounts for different things, but I’ve found personally that that becomes an unnecessary energy drain.

So, you’ll start by drawing the cash flowing from your income stream(s) into your central checking account (or accounts, if you maintain joint finances with someone in a “yours, mine, and ours” fashion).

The 401(k) contribution (or 403(b), or HSA, or…you get the picture) has to come directly from the paycheck, too, and that’s great—so make sure you’re demonstrating that on your money map somewhere. 

Illustrate your emergency fund: 

If you’re still growing your emergency fund, draw a dotted line from checking to savings to represent your monthly flow of cash. If your emergency savings are already funded, set it off to the side to visualize its “reserve” status—like an account waiting in the wings.

It’s there if you need it, but you aren’t actively funneling money into it. If you have a habit of “over”-saving (and therefore “under”-investing), this mental separation can help you see where it might be more helpful to reroute extra funds to a more growth-y destination. 

You may also have other savings or investing goals that you’re actively funding—like for a house down payment or future childcare—so you can draw those little metaphoric buckets as well.

Add in spending:

Most of my spending—necessary and discretionary—happens on credit cards, which I pay for out of the checking account. There are a ton of reasons to use credit instead of debit cards: security against fraud risk, cash back, points…the list goes on. 

But sometimes you have to pay something with a direct withdrawal (like my rent). I like to note that in my map where it makes sense.

You can think about the credit card as the first line of defense, or barrier, between your spending habits and your checking account. While you shouldn’t find yourself in a position where you need to be actively transferring money into checking from savings to pay your credit cards, I like to know when there’s a big-ticket item that’s going to be taken directly out of checking instead of funneled through a credit card with a “delayed” due date.

Draw post-tax investment accounts as offshoots from the checking account:

When you open a post-tax investing account like a Roth IRA or a regular taxable account, you have to deposit money directly into those accounts from checking or savings. Remembering to do this on an ongoing basis as you earn every month can be tedious, so I like to set up bimonthly auto-transfers that happen in the days following when I get paid (though in recent years as my income has become increasingly variable, I tend to manually check at the end of every month and make manual transfers, too).

What about taxes?

There’s a big missing piece of the visual puzzle above. Can you spot it? Taxes. Taxes will also be paid directly from your paychecks, so if you want to note it, you can (I did in my update above, just to twist the IRS knife). I recently sat down with a spreadsheet and listed our income, spending, and total tax burden, and was shocked at the pie chart that got spit out: We’ve paid more in taxes this year than we’ve spent on everything else combined.

That made me realize it probably makes sense to hire an accountant to double-check our tax strategy, vs. stressing about an incremental few hundred bucks spent here or there. (It also reminded me that now’s the time to invest in the business via #WRITEOFFS if anything comes to mind.)

Creating a sense of scale

You’ll also probably notice the percentages on the flow chart above. If I were really on my visual representation high horse, I would’ve drawn the boxes to scale (and actually, I low-key love that idea), but for the sake of my less-than-artistic first rendering, I just noted the percentages where applicable.

But drawing the boxes to scale can be helpful because it’ll help you see if you’re prioritizing investing (and doing so in an ideal way), or if there are a lot of leaky holes in your budget. For example, if only tiny offshoots are being sent to investment accounts or savings and the vast majority of your income is going right out the door in that spending bucket, it can help make your purchasing decisions a little more tangible.

It might also help you see where you’re prioritizing certain financial goals a lot more heavily than others—perhaps in a way you hadn’t realized. 

Why money mapping is a useful exercise

Besides the fact that you can whip out the highlighters and touch real paper for the first time in months, money mapping helps you diagnose large trends in your financial life.

It can also help reveal gaps in your own understanding. If you start filling in numbers and realize that you don’t actually know where part of your income is going every month, it can help visually guide you toward possible solutions.

For example, when I saw that 57% of my investing was going into a taxable investing account, it made me wonder if there were other tax-advantaged options I could—*ahem*—take advantage of first besides my 401(k) and Roth IRA. (Spoiler alert: I ended up contributing more to my HSA and opening a Solo 401(k) for my self-employment income.)

Happy mapping, nerds!

And as always, on the journey to financial freedom, there are two crucial sides to the equation: income and expenses.

Unfortunately, most of us can’t decide to inflate the income side at a moment’s notice (although I’d argue increasing your income is probably more within reach than you’d expect), and as Ramit points out, sometimes increasing your income doesn’t actually power any progress—because the “expenses” side rises commensurately.

The good news? Most times, you are the gatekeeper of the “expenses” side. 

And I get it: Another article telling me to spend less money? Snooze, Katie. Next! But there’s no denying that savvy money management and intentional spending are skills we have to hone, so they’re worth revisiting every once in a while—particularly because some of these changes can actually make your life better. 

Transitioning gradually to responsible spending

If you’re trying to spend more responsibly and you’re not in a dire financial situation, you can slowly change your habits so they stick—hell, you might even enjoy the changes. There’s no need to go from cold brew to cold turkey immediately—that’s not very sustainable, after all, and only increases your chances of backsliding if you’re not totally bought into the benefits. 

(I am confident, however, that once you see the effects in your bank account over a few months, you’ll be sold.)

Our personal spending habits are emotional. They’re intertwined with our sense of self and the lifestyle choices that make us “us.” Our identities are informed by our habits, and our habits are just the choices we repeatedly make. 

By that measure, any change can feel threatening to our identity at first. So how do you shift your identity? You start tweaking some of your habits.

It starts, unsurprisingly, with an awareness of your weak spots. How do you home in on your spending red flags? Take a page from the Marie Kondo playbook and simply identify what you own way too much of. (If you’re more of a “travel and dining” spender, you can do this via forensic accounting in your credit card statements. I did this with a reader once who discovered she was spending more than $1,000 per month on Amazon when she finally sat down and tallied it up.)

My weakness is lululemon. My personal financial discipline seems to dissipate in the rare retail air of a lululemon store. Slap a purple markdown sticker on something my size and—nine times out of 10—I’ll be in a semi-hallucinatory state in the dressing room, picturing myself gallivanting in and out of a cycling studio or walking the dog in said gear, blasting the subliminal message to everyone around me that I, Katie Gatti Tassin, am fit, chic, and in-the-know.

While you might have an incredibly niche weak spot, most people’s common financial pitfalls fit rather predictably in a few categories: retail, food, and travel. But the reasons these are common weak spots vary (as do the remedies for improving them), so let’s unpack them individually. 

Retail

Retail can be a trap door—it was an uncomfortably common experience for me to forget about impulse purchases entirely until I saw the $50 line item on my statement at the end of the month as I anxiously reflected on why I didn’t save more, reminding me of my window shopping fail. 

My unscientific opinion is that part of the reason retail purchases have a habit of sneaking up on us is because a common pastime in big cities is wandering around shopping centers, boutiques, and other marketplaces for entertainment—and the more you put yourself in physical proximity to interesting things to buy, the more likely you are to slam down the AmEx. The same goes for the ease and ubiquity of online shopping and two-day shipping. Less friction = more transactions. 

This is, in many ways, the entire Target business model: Big retail brands have made a concerted effort to turn shopping into an experience in itself. Why? Because getting you in the store is step #1.

Sometimes you do actually need to buy something. While the ultra-frugal approach is to avoid buying anything, here’s my middle-ground solution: Try avoiding the “shopping for fun” or “shopping as something to do” paradigm for a little bit. See if only navigating to websites or stores armed with an intention to buy a specific item cuts down on mindless retail spending. (We recently covered our favorite method for taking the air out of wanton desires in this Rich Girl Roundup.)

It’s not like you’re doing a “no spend” month—you’re just limiting your exposure to external temptations that don’t arise from your legitimate needs. And while some people are spoiled with way cooler places to walk (I’m looking at you, Coloradans), non-commercial spaces are usually a better option for “Hey, wanna grab a beverage and go walk around X?”-style plans.

Speaking of buying a beverage…food, drinks, and coffee

Without a doubt, the category I’ve overspent on the most (and had to work the hardest at cutting back) has been food. I used to spend $750/month on restaurant food (for just me!) in a medium cost of living city in 2018 with ease. And while I somehow managed to get my total food spending regularly under $200 per month for a couple of years, it’s an area that quickly became troublesome again when I let my foot off the gas.

After realizing my food spending got out of control in 2022 (to the tune of roughly $2,000 per month—I know), I managed to wrangle it again. Even after all the food inflation of the past few years, my “half” of our restaurant spending is now around $330/month on average.

Allow me to paint a picture:

You buy your Starbucks (or other boutique coffee shop) cup every morning. A few days a week, you grab lunch from a local spot. You get apps and drinks during happy hour shenanigans after work with friends, and you almost exclusively eat at an overpriced brunch spot on Saturdays and/or Sundays—lest we forget the Friday and Saturday evening drinks at the bar and the inevitable late-night pizza or tacos!

When you list everything like that, it sounds like a lot. But when you’re living it, with many of these relatively low-value purchase decisions sometimes 12 or 18 hours apart, it feels completely reasonable (particularly when everyone else around you is doing the same thing). And it’s not just you: “Food away from home” spending relative to “food at home” spending is at an all-time high. 

Still, the solution isn’t a prison diet of seven nights per week of unseasoned chicken, rice, and beans. After all, money is meant to be enjoyed—and there’s a middle ground.

Here’s what worked for me: I weaned myself off the $5 daily morning cold brews by switching to the (still overpriced) jugs you can buy at the grocery store (I realize the coffee example is so tired—but when I was making $3,000 per month, $150 felt like a lot for caffeine). When I got sick of that, I got a Nespresso machine (each pod costs roughly $1), which is still far more expensive than making it yourself, but only about 20% as much as my former habit. 

By choosing a grocery store brand or a product that still excites you, you’re more likely to stick with the plan instead of bagging the whole thing and blacking out three cars deep in the Dutch Bros drive-through.

(The other bonus here: Now, going out for a specialty coffee is a treat, because it’s no longer my norm.)

The takeout trap is slightly harder to escape, since it preys on our perception of convenience…or so it seems! Stopping at a restaurant or ordering takeout is overpriced, but it’s also fairly time-consuming if you’re driving around town on a daily basis to do so. (This is why my takeout habit got so bad in 2022: I wasn’t even going to pick up my own food. I was getting everything delivered via Uber Eats, which means you can add another 15%–20% markup on everything I bought.) 

Last year, it morphed from a special occasion weekly purchase to a baseline, near-daily habit. Still, quitting your takeout routine and cooking all of your own food might feel like a huge, daunting jump. 

The middle-ground alternative? Buying pre-made food from a grocery store’s deli section or using a meal delivery service. The trick is actually getting to the grocery store regularly and establishing the habit. 

Most grocery store chains carry pre-packaged goods: rotisserie chicken, mashed potatoes and salad by the pound, even robust sushi offerings—it’s all at your local grocer for a fraction of the price of the restaurants down the street. What we want to avoid is the exhausted Wednesday night after work when there’s no food in your fridge and the siren song of the DoorDash app ropes you into a $60 delivery. 

Eventually you may find yourself feeling more confident about learning to cook regularly (by the time I finally did, I realized it was a lot less challenging than I had been expecting). 

To figure out how much you’re averaging per meal and determine whether this is a problem area for you, simply combine your credit card statement(s)’s “groceries” and “dining out” categories for a month and divide by 90 (30 days on average, for three meals per day). The 2024 Money with Katie Wealth Planner has a new “Year in Review” feature that makes this relatively easy. Our average worked out to about $9/meal per person this year, compared to last year’s average of roughly $21 (I warned you it was bad).

Travel

Travel is a challenging one, because it’s one of those expenses that people often point to as being worth it regardless of the cost. (Ask anyone what they’d do if they had more money, and I’ll bet the vast majority of people would tell you they’d travel more.) It’s also something that’s become a bit of an aspirational status symbol in the age of social media, but we’ll set that aside for the time being. 

The only way I was able to go on trips semi-frequently while earning around $60,000 per year was (a) working for an airline, and therefore having access to free standby flights, and (b) playing the travel credit card game such that I was paying in points more often than not. 

While the first isn’t super achievable without firing off job applications to United Airlines, the second is mostly replicable, and we broke down our favorite strategies in this episode of The Money with Katie Show. But if you’re not in the mood to spend the energy and time overhauling your entire credit card suite, I think Ramit Sethi’s advice goes the distance: Simply track what you’re spending. 

I plugged my own data into the 2024 Wealth Planner so I could use its new Year in Review tab  to see what we’d spent on travel (airfare, hotels, ground transportation, airport parking, etc.) in 2023 so far, and it came out to around $11,000 for two people. It feels like every month we have to fly somewhere new for a wedding (we’ve both been to Florida, Dallas, New York, London, Houston, San Antonio, and Scotland this year for someone’s nuptials). I also personally went to visit family in Tennessee and see a football game in Alabama…but if you’d asked me to estimate how much we’d spent this year in this category, I would’ve way underestimated it (still, we often pay with points or miles, which illustrates just how out of hand things have gotten). 

The reasons for our trips (visiting family, going to weddings, etc.) lead to a disconnect in the way we think about our frequency of travel or whether or not we’re “taking a lot of trips,” because none of them feel like vacations. This can lead to all sorts of weird dynamics, wherein we’re spending a lot of money on a category that we don’t actually feel is generating a ton of value in return. I have a theory that this happens a lot for young people in this season of life. 

Still, airfare is quickly outpacing inflation, and it’s led me to reconsider my go-to sentiment that I must go far away to experience a true “break” from life as I know it. Now that we live in Northern California, we’re trying to plan our next vacation for an area that’s within driving distance (like Yosemite, Tahoe, or wine country) rather than catapulting ourselves across the globe. 

While the ultra-frugal option might be forgoing travel altogether or only using points, the middle ground option might be saving the points and dollars for the trips we have to take (because let’s be real, there’s a lot of that right now) and leaning into trips that don’t require two overpriced round trip tickets for our discretionary travel. 

At the end of the day, I’m actually having fun with getting back to basics

I used to feel resentful of suggestions like the ones I listed above—I figured a better life was always associated with spending more. More trips to restaurants, more outings to Nordys, and more international jet setting. 

But recently, I’ve been embracing the urge to simplify: to relish the opportunity to make my own food, enjoy how much mindspace is freed up by not owning unnecessary heaps of stuff, and exploring the interesting things that are right under my nose in my own town or state, rather than assuming I can only have valuable experiences in another country.

It’s a much less “rat race-y” way to indulge in the world around you, because it doesn’t require an ever-increasing stream of income (sometimes the “don’t spend less, just earn more” discourse can be self-defeating in that way). 

And it’s funny: After my year of experimenting with deploying a higher income toward constant takeout, business class trips abroad, and a few big luxury splurges, I ended up craving the very thing I figured I’d never want again: a return to the basics. My retirement accounts are thanking me.

My new part-time job was at a gym’s daycare center, so I’d typically head there after school, do my four-hour shift until about 7pm, then venture upstairs (free gym membership, baby!) and walk on the treadmill for about 45 minutes. While I exercised, I’d review my notes for that day. I’d read through them as many times as I could over the course of the walk, and then head home and finish the rest of my homework.

In retrospect, this sounds like a pretty exhausting existence (or a testament to a 17-year-old’s boundless energy reserves). But this approach—spreading out the misery of my test prep with an hour of leisurely, low-pressure note review each day vs. panic-cramming for the 48 hours before each test—enabled me to start acing tests with very little “official” studying. My weekends before tests were (regrettably) spent running from the cops or (not-regrettably) hanging out with my parents instead of being holed up in Nina’s room practicing geometry.

The repetition of this daily routine paid dividends, literally and figuratively—while I did relatively well in school my freshman and sophomore year, my grades junior and senior year scored me an out-of-state college tuition scholarship that was worth, at the time, about $25,000 per year (and based on how the cost of college has risen since, I’ll assume it’s now worth $250,000 per year—#SadJokes). 

I didn’t have to sacrifice sleep, be a genius, or do anything exceptionally difficult: I just had to spread out the misery such that each day featured a little bit of work (no “off” weekdays), but no one day featured a lot of work.

Doing a little bit every day was more manageable than the alternative, and it generated better results—it didn’t require exceptional performance during high-pressure periods (i.e., in the days leading up to an exam), but instead took advantage of my regular ebbs and flows. I’m sure there were some afternoons when I retained more, and others when less material made it through my thick-ass teenage girl cranium, but I dollar-cost averaged my effort.

So often, I talk to young professionals earning above-median (in some cases, well above-median) incomes who feel as though there’s no point in investing in the stock market until they earn $X more (“X” is irrelevant for the sake of this example, but anecdotally, it’s usually about 20% more than whatever they’re currently earning). They’re delaying their misery until an unspecific point in the future that they assume will be less miserable, thanks to having more money on hand. But what does this often mean in practice? Forcing yourself to go above and beyond once you reach your forties and fifties. 

Part of the reason we have a tendency to do this, I think, is because we overestimate the struggle awaiting us—we assume we’ll need to turn the dial way up in order to make progress at all, and the idea of doing so seems unbearable (or flat out impossible) in our current state. 

But you don’t need to cram the misery into a single decade or two. You can spread it out. The thing is, spreading it out over time requires prioritizing it now—even if it’s just “a little every day.” 

Comparing these two strategies

Retirement is life’s ultimate financial pass/fail exam. 

Some people start paying more attention as they see retirement looming on the horizon—the metaphoric Tuesday before the Friday test—and spend the intermittent days (years) sick with an undercurrent of anxiety, aggressively cutting back on their spending at the exact moment when they’re probably most interested in letting loose, and realizing they may need to work for a lot longer than they realized. 

They’re forced to cram a lifetime of financial pain into a few short years. 

Compare this with the “spread it out” approach. Rather than struggling to dump 50% of your income into your 401(k) and IRA at the last minute and giving it very little time to compound before you’ll need it, diverting 10% earlier in life (a much smaller sacrifice!) means you’ll likely never need to save more than 10% at a time. This is true even in the years leading up to the big day, when you pull the ripcord and float away from Zoom calls and work alarms forever.   

The chart below illustrates the contribution patterns of the two “paths,” one wherein someone saves 10% for all 40 years of their working life, and the other where someone realizes in year 30 (about 10 years before retirement) that they need to kick it into gear. (This assumes two earners who both take home $50,000 per year after taxes in year 1, rising by 3% per year.)

The person making consistent 10% investment contributions never invests more than $15,800 per year over the 40 years. The “cramming” investor must start investing in year 30 with a $58,000 contribution.

The red investor gets to go balls to the wall with the AmEx for the first 30 years, but notice how similar their spending is for the majority of their working lives, despite how different their last decade looks:

It looks like a negligible difference in spending…until it doesn’t. The blue investor got to spend 90% of their income through all 40 years—whereas the red investor got to spend slightly more until year 30, but then had to drop down to a harsh 50% for the last 10 years. 

And of course, if you’re familiar with how exponential compounding works, you may already know that the 10% investor will skid into year 40 with more money. The chart below illustrates their respective account balances, using an average annualized rate of return of 7% in both cases:

The 10% investor will have almost $1.6 million in today’s purchasing power in year 40; the “cram” investor will have a little over $1.1 million. But with the red investor’s high save rate, they’d catch up to the 10% investor if they worked and saved 50% for an additional six years.

(In order for them to retire with the same amount as the 10% investor at the same time, they’d need to maintain a 70% save rate for the last decade.)

Is it easier to save 10% for 40 years or 70% for 10 years?

If you’re trying to retire early, a 10% savings rate probably won’t cut it (try 15% or 20% if that’s your goal). But if you’re happy to retire on time (which is no small feat!), a lifetime of investing $1 of every $10 you earn—spreading out your sacrifice—will do the job.

And while it depends on how your income changes (and maybe your personality, too), I’d wager that a consistent 10% savings rate is almost always going to be a walk on the treadmill compared to condensing all your sacrifice into one big sprint at the end.

It wasn’t until I found myself in a peculiar economic position that a more helpful version of this rule emerged for me: Don’t live beyond your assets.

Once I found myself graduating from a median income to a higher one, I straddled the line between two worlds: Do I maintain my exact same lifestyle and invest everything extra, or do I recognize that I can afford a little lifestyle creep?

The hard part? There’s no rule of thumb for how to handle such a situation. I felt silly skimping on brand name orange juice, but I was also terrified of backsliding into the old, spend-y habits that used to drain my checking account every month.

Just because I was making more money didn’t mean I was wealthy, and I struggled to find balance.

When I made $50,000/year, these decisions were paradoxically easier: I didn’t have a ton of extra cash every month. I spent what I spent, saved what I saved, and the whole ordeal involved less than $3,100 per month of total inflows and outflows.

But what if you suddenly find yourself making 3x that? 5x? 10x? (Hey, dream big!)

Some suggest keeping your savings rate the same as you earn more (increasing the amount you’re saving proportionally with your income), but that introduces a new quandary: Your target is technically getting further away, and your financial independence date doesn’t actually get any closer despite your income rising.

If only there were a reliable metric we could add to the equation to help guide our decision…

Fortunately, there is: Your net worth.

Your income might look as though it justifies your spending—but would your net worth?

The big question mark for me was this: Sure, I have more disposable income now that could feasibly fund a more lavish lifestyle. But if you looked in my investment accounts—my larger financial picture—would my spending behavior still seem reasonable and justified?

An example

Let’s pretend I’m a beautiful 23-year-old TikTok star who suddenly found myself earning $400,000 per year thanks to lucrative brand deals and a sparkly personality. I’m making great money, no?! I’ve had my eye on the Mercedes-Benz G-Wagon for a while, a $140,000 car. Could I make the case for affording that vehicle, given my income? Well, I suppose so—it’s roughly ⅓ of what I earn in a year, right? That’s not too outrageous. 

But wait—my liquid net worth is only $50,000. Now does it make sense for me to buy a car that’s worth nearly 3x my entire life savings? Almost certainly not. 

By marrying these two metrics—our liquid net worth and our income—we can strike a better balance around the type of lifestyle that’s reasonable to live, as opposed to just looking at one number or the other. While income is the number most people use to determine what they can spend, it only tells half the story.

Here’s where I landed (and I’ll share how I formulated this below): Your reasonable annual spend is the average of 4% of your current invested assets—inspired by the 4% Rule—and your income.

For example, someone who has a net worth of $250,000 and an income of $250,000 (let’s pretend that’s after tax, for simplicity’s sake) would net the following annual spending that’s beneath both their income means and net worth means:

4% of your net worth: $250,000 * 4% = $10,000
Post-tax income: $250,000
$10,000 + $250,000 = $260,000

$260,000 / 2 = $130,000

In this example, someone who makes $250,000 per year and is worth $250,000 would find a reasonable “below their means” annual spend of $130,000 maximum. This allows them to enjoy their higher income without meaningfully disrupting their progress toward financial independence.

(Note: I’m using “post-tax” a little colloquially here; if you’re also tossing a giant chunk of money every month into something like a 401(k), HSA, 403(b), or other account sponsored by your noble corporate benefactor, don’t forget to include that in your income, too—it’s still your income, you’re just opting to save it before you see it like the wise Rich Girl you are.)

Here’s a table that takes incomes between $50,000 and $500,000 and net worths between $50,000 and $1,000,000 into account (our example is shaded in green).

How I came up with this part-art, part-science formula

The “4% of net worth” figure serves as a bit of an anchor: It reminds you of the type of spending that your current invested assets can support (thanks to the 4% rule), which can lend some perspective to how much progress you’ve already made and how far you have to go.

As you’ll see in the table, even someone who’s worth $1 million and earns $250,000 should spend no more than $145,000 per year—because while it sounds like a lot of money (in both cases, because it is!), the proportionality of financial progress means they’d need roughly $3.7 million invested to support their spending if they were to lose their income (rendering a net worth of $1 million still quite far from their goal). 

This formula keeps a tight leash on lifestyle inflation by grounding it in the reality of one’s net worth—never allowing the runaway freight train of luxury cars and Uber Eats (guilty) to derail one’s progress completely.

On the flip side of the equation, if someone found themselves on the opposite side of the income spectrum but with similar moolah in the bank—$50,000 income and $1 million net worth—you’ll notice that the recommendation is to spend nearly everything they’re earning, because they’re so close to financial independence so as to not need to be saving much more.

Widening the aperture in this way allows you to give weight to what’s arguably the more meaningful, permanent variable in your financial life—your net worth—as opposed to basing 100% of your spending decisions on your current, subject-to-change income. This guideline should also help high earners on their way to financial independence understand just how much they can indulge with their incomes—without going overboard.