If you’ve ever avoided budgeting because it felt stressful, restrictive, or shame-inducing, this episode is going to change everything.
In part two of my Personal Finance Cheat Sheet series, I’m breaking down how to budget in a way that actually works and how to use that budget to finally pay off your debt without shame, stress, or tracking every single penny. We’re talking about why most budgeting methods fail, how to reframe your budget as a permission slip instead of a punishment, and the exact system I use to help you make real progress on credit cards, student loans, and more. If you want actionable clarity around budgeting and debt payoff, get ready to take notes!
Key takeaways:
A budget isn’t about restriction — it’s about clarity and permission.
If budgeting has felt like punishment, it’s likely because you were taught to associate it with deprivation. I want you to see your budget as a gas gauge, not a rulebook. It tells you how far you can go without stress, guilt, or surprise card declines. When you don’t know your numbers, that’s what creates anxiety, not the act of budgeting itself. A good budget gives you full permission to spend money guilt-free because you already know what you can afford.
The 3 Bucket Budget works because it removes daily decision fatigue.
Instead of tracking every purchase, I use a system with three buckets: expenses, goals, and fun. Your expenses stay relatively stable, your goals (like debt payoff and savings) get automated first, and whatever’s left is yours to enjoy. By automating your goals, you’re paying yourself first, which means you’re making progress without constantly thinking about money or stressing over small purchases.
Automating debt payoff is the fastest way to make consistent progress.
The most powerful thing you can do for your debt is automate it. Even increasing your contribution by 1–2% can shave months or years off your payoff timeline without dramatically impacting your lifestyle. Automation removes the emotional labor from money decisions and prevents the all-too-common cycle of “I’ll save what’s left” — which usually means saving nothing at all.
Not all debt is equal — interest rates should drive your strategy.
Treating all debt the same is one of the biggest mistakes people make. Credit card debt is especially dangerous because of high, compounding daily interest, while mortgages and student loans behave very differently. To pay off debt faster, you should focus your extra money on the highest-interest debt first while continuing minimum payments on the rest. This approach saves you money and time, and reduces unnecessary stress.
Progress beats perfection, and shame will never fix your finances.
There is no “perfect” percentage you need to save or put toward debt. What matters is making some progress and building systems that support you long-term. Shame doesn’t motivate change, it keeps you stuck. Whether your debt came from survival, education, or mistakes you didn’t know better about, beating yourself up only makes the journey harder. Grace, clarity, and consistency are what actually move the needle.
Notable quotes
“If shame worked, it would’ve worked by now.”
“A budget isn’t restrictive — it’s the permission slip to spend money guilt-free.”
“You’re not stressed about budgeting — you’re stressed because you don’t know what’s going on with your money.”
Episode at-a-glance
00:00 Intro
00:15 Why Budgeting Feels Restrictive
01:48 The Gas Gauge Analogy & Why Budgets Matter
03:11 Why Most Budgeting Methods Fail
04:14 The 50/30/20 Rule Explained
05:36 Why the 50/30/20 Rule Isn’t Perfect
06:56 Introducing the Three Bucket Budget
08:24 How to Automate Your Financial Goals
10:50 Progress Over Perfection: Flexible Budgeting
12:19 How to Prioritize Debt Payoff
14:39 Understanding Different Types of Debt
16:39 The High Cost of Credit Card Debt
18:08 The Snowball vs. Avalanche Method
19:47 Free Five-Day Debt Challenge Resource
20:22 How to Find More Money in Your Budget
21:44 Negotiating Your Bills & Saving More
23:41 You Are Not a Bad Person for Having Debt
24:59 Final Thoughts & What’s Next in the Series
Visit https://herfirst100k.com/ffpod to join our 5 Day Debt Challenge and find any resources mentioned in the show!
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Transcript:
Tori Dunlap:
If budgeting feels like punishment, it’s probably because you’ve been taught the wrong system. Welcome back to the Personal Finance Cheat Sheet Series. We are giving you actionable resources to better your money in 2026, with an incredible kickoff of this series in January. This is episode two of three, all about how to be better with money this year. This is where I’m giving you actionable clarity, as opposed to financial overwhelm. And if you’re new here, my name is Tori. I’m a multimillionaire, a money expert, and I’ve helped over five million women be better with money. Let’s talk about budgeting and specifically budgeting for debt payoff. Whatever kind of debt you have, whether that is student loans, credit card debt, a mortgage, something else, debt can feel overwhelming, but one of the best resources you have for actually paying down your debt is having a good budget.
Now, I know what happened here. I already know. I said the word budget, and you’re like gross and you want to throw up a little bit, because you’ve associated budgeting with restriction or deprivation. You have associated the word budget with I’m about to hate my life and I have no choice but to hate my life in order to progress towards my financial goals. And I’m here to tell you and remind you that budget, as I’ve said many times before, is the gas gauge in your car. It is the permission slip for you to actually spend money. The reason I call it the gas gauge in the car is because imagine you get in your car, and you start driving and your gas gauge is broken. You don’t know how far you can get without running out of gas. You don’t know if you’re going to end up stranded on the side of the road at 2:00 in the morning with no cell reception, because you don’t know.
That is the reality of you trying to navigate personal finance without having a budget. Now, imagine I get in the car, and I start driving, and I see my gas gauge is there and the light’s on. The light tells me, “Hey, you need to get gas soon.” That is a little stressful, but I know, oh, I have to get gas in the next two miles. That is actually less stressful than you raw dogging life, and just driving around and wondering if you’re going to break down at any time. So, if you’ve been thinking to yourself, money stresses me out, so I’m not going to look at it or budgeting stresses me out, so I’m not going to budget, you’re actually not stressed out about the money or about a budget. You’re stressed out because you don’t know what’s going on. You’re stressed out because you don’t have a budget.
You’re stressed out because your card could decline at any time. You’re stressed out because when somebody invites you to dinner, you don’t know if you can actually afford it. So, budgets are not restrictive. Budgets are not about deprivation. They’re instead the gas gauge in your car to tell you, “Yeah, you can spend on this thing guilt free. You’ve already worked and settled your budget. You already know how much money you have to spend.” So, if you’ve been thinking, “Oh, I don’t want to budget because that stresses me out and that means I can’t ever spend money.” I actually need you to have a budget. And it is one of the best tools at your disposal to progress in your financial life, and specifically to progress to make sure that you have enough money to contribute to paying off debt. It is in fact one of the best tools and the only thing here that’s in your control so that you can optimize your debt payoff journey.
Now, one of the reasons you may have hated budgets before is that all of the budgeting methods out there kind of suck. And I’m the first person to say that. I’ve downloaded those budgeting apps that yell at you for going over budget and they’re not fun, they’re not helpful. They don’t actually make you better with money. They just make you feel shame. They’re extremely restrictive. There’s no flexibility. You and I live our lives. We have different goals. If it’s in the middle of winter, I’m not going out to a rooftop bar. So, yeah, my category for that month is going to be fine. But in the summer, my spending’s going to change. So, before we get into the budgeting method I recommend and I’ve created, let’s talk about the ones that you’ve probably heard and if they work well or not.
The first budgeting method is the 50/30/20 rule. 50/30/20 is probably the most common budgeting method you’ve heard of. It’s basically this idea that 50% of your pay goes to your expenses, your necessary expenses, like rent or your mortgage, groceries, insurance, gas, et cetera. 30% goes to fun things, concert tickets or food out, or travel, or coffee. 20% is for your financial goals, for your savings, for your debt payoff journey, for your retirement, et cetera. So, that 50/30/20 rule is probably the most common and agreed upon budgeting method. However, life is very different than when this rule was invented or when this rule was created. Inflation’s so high. The cost of living is crazy. Wages have stagnated. The economy just feels rough right now. Tariffs have raised the price of everything. So, with the 50/30/20 method, it is more of a guideline rather than a rule.
We’re playing Pirates of the Caribbean here. And it’s really important that this 50/30/20 is not actually 50/30/20 exactly, if that doesn’t make sense for your life. It’s meant to be this kind of adjustable guideline rather than this very strict rule, because you have a different life than me than somebody else. All of us have different things we’re prioritizing spending our money on. We live in different places. The cost of things is different. So, it’s really important to adapt your budget to make your life work. Similar to the 50/30/20 method, there’s so many other officially proved budgeting methods, but the one that I created is the one I find to be the most helpful. Because frankly, I didn’t like any of the ones out there. And it’s called the three bucket budget.
My three bucket budget method I created because I wanted men to stop yelling at me. I wanted men to stop yelling at me about how I overspent on a category. And then when I would look and see that, oh, I had spent more than, I don’t know, 50% on my expenses, the 50/30/20 rule was no longer effective because it just made me feel that I… Yeah. It didn’t work. It wasn’t adaptive. It wasn’t helpful. So, the three bucket budget is actually very simple and it all hinges on one very concrete, tangible thing that you can do today. First bucket is your expenses. It’s everything you need to eat, sleep, breathe, move, and live. It’s the things that you could not cut in case of a job loss, the things that you are spending money on that are necessary to your life. Bucket number two is your goals. This is your debt payoff. This is your savings. This is your retirement.
This is everything that you need to either save for or pay off. I joke that bucket number one is present day bucket. It’s the things that you’re spending money on right now. And bucket number two is the bucket for either future you or past you. The person who either took on debt or the person who has these goals in the future. And finally, bucket number three is your fun bucket. It’s everything that you love spending money on. So, remember I said all of this hinges on one very concrete, actionable step. That step is automating bucket number two. If we can automate our savings. If we can say, I want this specific amount of money, either taken out of my paycheck every month, which you can do at some payroll platforms, or I want this amount of money transferred from my checking account to my savings account. Maybe that’s every time you get paid, maybe that’s once a month.
If you can automate the hardest part, which is the saving money part or the debt payoff part, bucket number one, your expenses don’t really change. You’re going to have the same rent month over month, your groceries are going to be roughly the same. So, if you’ve automated bucket number two, if you’ve paid yourself first, which is what we call it on this show, if you’ve paid yourself like you’re another bill, your bucket number one money is then taken out of your account. Everything left over in your checking account is bucket number three money to spend on whatever you want. You just budgeted without having to track a single penny. And you’ve budgeted in a way that is flexible to your life, depending on what’s going on, depending on the season, depending on the cost of living. So, if you are trying to pay off your debt more aggressively, this automation is where we can have some fun.
If we increase the amount, even just by 1%, you’re probably not going to feel that 1%, but it’s going to allow you to pay off your debt quicker. If you increase that contribution just 1% or 2%, it is going to allow you to pay off your debt on a more expedited timeline. And it’s going to prevent you from agonizing, and stressing over $5 purchases, and $5 decisions, because that is the mistake with budgeting that is so common. People start budgeting, and they feel like they have to track every penny, and then they get stressed out about anytime they spend money, even if it’s just a small amount. And then that shame cycle continues. And then you feel like you need to spend more money to try to not feel shame anymore and then you feel shame about that. And, “Oh, I got to the end of the month and I didn’t save anything.” You can see how this happens.
And if this is you and you’re watching on YouTube, let us know in the comments, because this is so many people we talk to on a daily basis. This feeling of shame about every purchase, this feeling that I didn’t save anything this month or I didn’t pay off any debt this month, because I spent all my money. This budgeting method is flexible. It allows your budget to grow, and change and shift. And it prioritizes you progressing in your financial goals, while also having some fun, because both of those things have to happen. Now, I know what you’re asking me next. Tori, how do I know what percentage I need to automate? This is where something like 50/30/20 might be a good guideline for you. You might want to try to automate 20%, but for somebody else that might be way too high.
You’re like, “You know what? I cannot do 20% right now. I just have $20 a month I can save or $20 a month I can contribute to my debt.” Okay, great. I love that. I love you making small bits of progress. So, ultimately, this is where the flexibility can come in for you. There is no exact right amount. And I want to prevent you from feeling like there’s an exact right amount because everybody’s different. And I don’t want you to feel shame if that exact right amount is so far away from what you can do. Try to work your way up to something like 20% for all of your different goals. But ultimately, I care about progress more than perfection here.
So, again, that three bucket budget. Bucket number one, making sure that you know your expenses, your necessary expenses. Bucket number two, your goals. Automate that bucket and then pay all of your necessary bills out of your checking account. And finally, bucket number three, everything that’s left over in your checking account. That’s bucket number three money that can get spent on whatever you want. So, how do we increase the amount that we’re able to contribute to our debt? We increase bucket number two money. We increase that percentage. This is where knowing your numbers is absolutely crucial. And I’m not talking about tracking every penny. I’m just talking about creating these systems, creating this system of automation so that you can feel supported towards these goals without feeling like it’s a chore every single time.
If you can set up this automatic transfer, if you can pay yourself first, if you can contribute to your savings or to your debt payoff journey and not feel like, “I didn’t save anything this month because I forgot or I don’t have any money left over.” You’re doing the hard thing first. And if you want to be more aggressive with your debt payoff and you can afford to be, amp up that percentage. This is where you can get creative and allow this budgeting method to help increase your success rate, because we don’t want to say, “I’m never spending money again,” because that’s not sustainable. And frankly, that’s not fun. I’m not the financial expert that’s going to tell you to stop spending money because that’s not realistic.
And we also want to make sure we’re not getting in that cycle of guilt where, “Oh, I spent all my money and I didn’t save anything.” This allows us to have both. So, as you’re progressing towards your goals, as you’re using your budget to accelerate your debt payoff, it’s really important that you don’t view all debt the same. This is a very common mistake that we see, especially people who have followed the Dave Ramsey method. And also, if you want to see my take-down of Dave Ramsey, we’ll put in the description. But ultimately, if you view all of your debt the same, you are absolutely sabotaging your success and you’re adding unnecessary, potentially years to this debt payoff journey, because not all debt is the same.
So, the easiest way to differentiate debt is interest rate and the way that interest accrues. So, something like credit cards. Going into credit card debt is a very, very different experience than having a student loan or even than having a mortgage. Credit cards, for example, have an extremely high interest rate. On average, that interest rate is 22%, but can be as high as 30%. And not only do credit cards have a high interest rate, but the interest compounds. Meaning that the interest earns interest, earns interest, which is one of the reasons why debt and credit card debt specifically feels so hard to pay off, because the last thing is not only is the interest rate really high and it compounds, it compounds daily.
That means every single day you’re in credit card debt, it costs more than the previous day. No wonder this feels like a hole that you can’t dig your way out of. This is very different than a student loan or a mortgage. Mortgages is the perfect example. The average mortgage interest rate is anywhere from four to 7%. It’s about 7% right now, but a mortgage doesn’t really have compound interest. Most mortgages have what’s called simple interest. So, it’s a way lower interest rate and the interest is not earning interest all the time. It earns in a different way. It’s simple interest. So, when we’re thinking about paying off our debt, if you are treating credit card debt the same as a mortgage, for instance, or a car loan or another kind of debt, these are not the same. So, when you lump all your debt together, rather than getting a different plan for each kind of debt, you are actually adding months, if not years to your debt payoff journey because you are not viewing debt differently.
The easiest way to think about paying off your debt and prioritizing your debt is to start with the debt that has the highest interest rate. If you are in credit card debt, I can almost guarantee that’s going to be the stuff with the highest interest. So, rather than saying, “Okay, I am going to split all of my effort over all of my pieces of debt.” If you have two credit cards with debt on them, and then a car loan and then a mortgage, rather than saying, “Okay, I’m going to split my energy into fourths, into quarters, I’m going to put all of my energy towards paying down the credit card with the highest interest rate.” Now, this doesn’t mean that we can neglect our payments. We need to keep paying our payments. But with any additional money, with any additional money, you want to focus that full aggression onto paying down the debt with the highest interest rate first.
Then once that debt is eliminated, we move to the next highest interest rate and then the next highest interest rate. If you want more resources around paying off debt, we have an incredible five-day debt challenge. It is entirely free. It is so helpful. It has helped over 35,000 people progress in their debt payoff journey and literally can help you pay down your debt in just five days. So, go to herfirst100k.com/ffpod to get signed up. It is a free challenge, so helpful. So, if you’re not spreading your focus, you can begin to make real progress towards that one piece of debt, as opposed to making little tiny bits of progress on a bunch of different things, splitting your energy in a way that it’s not sustainable.
So, if you’re at the point where you’re trying to find more money, you’re trying to find more money to contribute to your debt payoff, to make your debt balance go down, the easiest way to do that is to evaluate that budget you just made. I’m not asking you to completely cut everything that brings you joy. I’m not asking you to stop spending money, but what I am asking you to do is stop spending money on shit you don’t care about. We end up spending a lot of money as human beings in a very mindless way. Maybe that is that coffee at 3:00 in the afternoon that your over-caffeinated body doesn’t really need. That is your excuse to get out and take a walk at work. I’m not demonizing coffee. You guys know that about me. Coffee, if that is something that brings you joy is great.
But if you are spending money on things that you don’t really like, that you don’t really truly enjoy, just because it’s convenient or it’s mindless, this is the easiest immediate change you can make that’s actually going to help you pay off your debt faster. Evaluate that budget. Look for things you forgot to cancel. Look for purchases that you don’t want to make again because they were not actually beneficial to your life. What you can also do, especially if you’re someone who’s like, “You know what, Tori? I’ve already done that. My budget is pretty lean.” You can negotiate your bills. This is one of my favorite hacks that nobody talks about.
In one of our programs, 100K Club, we have what’s called the Bill Breakthrough. It is a series of scripts that will help you negotiate every bill in your life. Your rent, your medical bills, your credit card interest, your phone bill, your cable bill, if you still have one of those. It’ll help you slash these bills. We literally just had somebody join and in the first week of being in the 100K Club, she saved $720 a year. That was $720 a year that she could put towards her debt or into her savings account. So, one of the best things you can do is make sure you’ve got the best deal. You’ve got the best deal for your auto insurance. You’ve got the best deal for your phone plan. You have the best deal for your rent.
This is where you call the kind of companies and get to their cancellation department. When you call the company that your phone is with and they’re like, “Do you want to talk to a representative?” And then you can press the number six to get to their cancellation department, that’s where you’re going. You’re not talking to the first person, you’re talking to the cancellation department. Press the number six or whatever the number is and have a conversation with them and say, “I have been a customer for X years. I don’t know. I’ve been a customer at Verizon for five years, but I’ve been shopping around and I’ve been seeing some better deals elsewhere. What can you offer me so I can stay a customer?”
That version of that script can be adapted for almost any bill you’re paying. Your car insurance, your home insurance, your phone bill, your cable bill, any subscriptions that you forgot to cancel, even if you were paying for them and forgot to cancel them. This is an incredible way that you can immediately save money on the things that you have to spend money on. You need the car insurance, you need the phone bill, but that can immediately put money back in your pocket. So, take an hour, you might be shocked at how much money you can save, and how much money you can earn back in that hour or even two hours of phone calls. Make time this weekend, make those phone calls. And if you want more scripts, join the 100K Club. They are all in there.
My final reminder for you, you are not a bad person if you have debt. You probably took on debt to progress in your life. The average person cannot up level their life without taking on debt. I am a multimillionaire who has debt. I just bought a house and I took out a mortgage to do that. There are certain things in life, whether that’s a college degree or owning a home, or starting a business, that you might have to take on debt to do. And that’s completely normal. And with other kinds of debt that may have been because you made financial mistakes or you didn’t know any better, shame doesn’t work. There’s so much shame tied to debt and there’s so many feelings of, “Gosh, why didn’t I know this sooner? Or I should have done this thing or I feel stupid.” And ultimately, all these feelings around debt are normal, but not productive.
You feeling shame about your debt only makes this debt payoff journey worse. If shame worked, it would’ve worked by now. One of the things you have to keep in mind to make this debt payoff journey sustainable, don’t beat yourself up. Offer yourself grace. It’s going to be okay. Thank you for being here, financial feminists. I expect to see all of you join that five day debt challenge. It is free. There are no excuses. It has helped over 35,000 people pay down their debt in just five days. So, herfirst100k.com/ffpod to get signed up. We will see you back here next week for part three of our Finance Cheat Sheet Series. We are walking through exactly how to begin investing in 2026, even if you have no idea where to start. So, herfirst100k.com/ffpod to join that five-day debt-free challenge. And we’ll see you back here soon for part three. Have a great day. I’ll see you back here. Bye.
Thank you for listening to Financial Feminists, produced by Her First 100K. If you love the show and want to keep supporting feminist media, please subscribe or follow us on your preferred podcasting platform or on YouTube. Your support helps us continue to bring this content to you for free. If you’re looking for resources, tools, and education, including all of the resources mentioned in this episode, head to herfirst100k.com/ffpod.
Financial Feminist is hosted by me, Tori Dunlap. Produced by Kristen Fields and Tamisha Grant. Research by Sarah Sciortino. Audio and video engineering by Alyssa Midcalf. Marketing and Operations by Karina Patel and Amanda Leffew. Special thanks to our team at Her First 100K, Kailyn Sprinkle, Masha Bakhmetyeva, Sasha Bonar, Rae Wong, Elizabeth McCumber, Daryl Ann Ingman, Shelby Duclos, Meghan Walker, and Jess Hawks. Promotional graphics by Mary Stratton, photography by Sarah Wolfe, and theme music by Jonah Cohen Sound. A huge thanks to the entire Her First 100K community for supporting our show.
Tori Dunlap
Tori Dunlap is an internationally-recognized money and career expert. After saving $100,000 at age 25, Tori quit her corporate job in marketing and founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. She has helped over five million women negotiate salaries, pay off debt, build savings, and invest.
Tori’s work has been featured on Good Morning America, the New York Times, BBC, TIME, PEOPLE, CNN, New York Magazine, Forbes, CNBC, BuzzFeed, and more.
With a dedicated following of over 2.1 million on Instagram and 2.4 million on TikTok —and multiple instances of her story going viral—Tori’s unique take on financial advice has made her the go-to voice for ambitious millennial women. CNBC called Tori “the voice of financial confidence for women.”
An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.
