"Unlimited Budget Categories."

You'll see this feature boasted on the homepage of almost every budget app. You get a category and YOU get a category! I budgeted this way for years, enticed by the prospect of organizing my spending into perfect little groups for maximum left-brain happiness. But it took time. It took energy. The busier my life got, the less I had to give to those uncategorized transactions. They would pile up higher and higher until the budget became just another unmaintained todo that would never get done.

A haiku might help here.

Decision fatigue
Limitless categories
Countdown to burn out

The Real Goal of Budgeting

One day I had a revelation. All these categories… "THEY DON'T ACTUALLY MATTER." Well, they do matter, but they are secondary to the real goal of budgeting!

The most important things are:

• Did I spend less than I made?
• Am I saving for big future things or paying off debt?

If both are true, then I don't care where I spent the money. If not, the categories should help me understand what areas of spending I need to change. They are interesting and helpful, but not the main event.

The Only 4 You'll Ever Need

In the spirit of "don't give me too much rope to trip myself," here are 4 crystal-clear categories for any expense, so you'll never again have to wonder if an espresso martini belongs in "Coffee Shops" or "Alcohol & Bars."

You may intuitively know them already.

1. Fixed
2. Discretionary
3. Special
4. Unexpected

Here are the definitions.

1. Fixed Expense

These are things you've previously committed to pay for. They have a known recipient, amount, and schedule, often charged in the background. You get a bill or auto-pay them. In other words, if you didn't touch your wallet for a month, you would still get charged for these things.

Examples: Rent, mortgage, memberships, subscriptions, tuition, debt repayments, utilities.

Why it's important: This is how you know if you can afford your lifestyle. You're obligated to pay for these fixed expenses (unless you move or cancel), so you need the sum of them to be low enough to cover everything else.

2. Discretionary Expense

These are day-to-day needs or wants that you actively buy and have some level of control or choice over. This is not "fun money"! In fact, you may need the item more than a fixed expense! But you are not contractually obligated to buy it. Unlike fixed expenses, you are present during a discretionary purchase, actively tapping your card in person or online.

Examples: Groceries, gas, shopping, clothes, coffee, bars, restaurants, movie tickets, concerts, taxis

Why it's important: These are the purchases you can control, so tracking them over time reveals how frugal or extravagant you've been.

3. Special Expense

These are big things you've consciously saved for. They are usually accompanied by a transfer from your savings account into your checking account to have enough cash for the big thing.

Examples: Home renovations, new car, new laptop, down payment, engagement ring, vacations

Why it's important: Tracking these purchases separately avoids skewing the data about your spending. An app should not "punish" you for buying something big by showing a huge spike in your spending. In fact, these things should be celebrated! You saved the money and consciously spent it on cool stuff! Isn't that the whole point of all this?

4. Unexpected Expense

These are the unanticipated, no-fun costs that we are obligated to pay for. We are human beings. Mistakes are something we're known for. This dedicated category is for all of our mistakes and emergencies. An unexpected expense is anything you'd pull from your "emergency fund" to cover.

Examples: Parking tickets, medical bills, car repairs, and all the things that are no fun and you hope never happen.

Why it's important: Tracking these separately helps you understand how big your emergency fund should be. When you inevitably make a mistake, you'll feel calm knowing that you have a dedicated category and fund for these things.

How This Makes Managing Money Simpler

With a limited number of well-defined categories, reviewing transactions becomes fun, fast, and sustainable.

• No more "splitting" a transaction like "Amazon" — it's just discretionary
• No more wondering if you're forgetting a category
• No more "moving money" between categories

No more burnout.

A final haiku to finish this off.

Crystal clear choices
Make money sustainable
Less is sometimes more