Ringing in a new year — and seeing your December credit card statement — may tempt you to do a budget overhaul.

If you really want to save money this January, resist pulling out your spreadsheet, advises Suze Orman, a personal finance expert and host of the podcast “Women & Money (and Everyone Smart Enough to Listen).” In a recent interview with The Wall Street Journal, she compared budgets to crash diets and explained how their restrictiveness often leads to impulsive spending.

“I dislike budgets,” she candidly stated in the interview. “When you limit and cut back on expenses, it eventually culminates in an explosive shopping spree.”

Orman isn’t the only person who shares this perspective. Melissa Browne, a financial educator, also cautions against making moral judgments about spending habits as they may hinder progress towards financial goals.

“Budgets don’t work for many people, just like how one-size-fits-all diets fail in the long term,” Browne recently told Select. “Rather than focusing on budgeting, the key is to spend and invest wisely.”

The good news is that there is a less demoralizing alternative, according to Orman. Instead of fixating on what not to buy, she recommends focusing on smaller decisions that make you feel more in control of your bank account.

“Just do one thing that might make you feel more secure,” she suggests. “For example, saving $10 or reducing eating out.”

So, you don’t have to completely give up date nights or seasonal shopping sprees to improve your financial well-being. Instead, you can find opportunities to save money that empower you rather than deprive you of things you enjoy.

Another piece of good news: a strict budget is not the only way to track your spending. In fact, according to a 2022 survey by OppLoans, 73% of Americans do not regularly follow a budget.

Ramit Sethi, a self-made millionaire and star of Netflix’s “How to Get Rich,” has similarly disparaged meticulous budgets, considering them “pointless” in 2019.

According to Sethi, it is more effective to create a spending plan that doesn’t obsess over every dollar spent. In an interview with Make It in 2022, he recommended developing a “conscious spending plan” that includes tracking monthly costs, savings, investments, and allocating guilt-free spending. By doing so, you can prioritize paying bills, saving, and then indulging in discretionary items and activities.

Naturally, spending habits vary for each individual. Despite her aversion to budgets, Orman admitted to The Wall Street Journal that she would “drop dead before buying a coffee” out and considered eating out to be “one of the biggest wastes of money out there.” Instead, she prefers to allocate that money towards indulging in private domestic travel.

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