Dana:

What I really want people to hear is trust yourself. Learn to trust yourself. It's a big project and a big part of it is letting go of that message that says you can't be trusted to make decisions for yourself. And that's what I hear when people say that budgeting makes them feel more in control, is this feeling that they believe if they're not planning and tracking every dollar, that things will completely fall apart and their life will be destroyed. Because that's the messaging that we get. Really no matter what you've got access to, what your resources are, what your income is, how much wealth you have, we still have that message. It has to be tracked. We have to be disciplined.

Katie:

Welcome back, Rich Girls and Boys to the first 2025 episode of the Money with Katie Show. Man, 2025. That means it has been five years since I started Money with Katie. Been doing this for half a decade. That's wild. And three years since the Money with Katie brand became part of Morning Brew, which is also pretty hard to believe.

The idea that we are discussing today is something I never could have imagined just a couple of years ago because it asks something kind of blasphemous: What if budgeting doesn't work? I know, I'm going to let that sink in for a second. What if budgeting doesn't work?

The idea is part of something that writer Dana Miranda calls “budget culture”—now, her work first crossed my radar, entered my radar in 2022, actually kind of unbeknownst to me when she wrote a guest piece on Anne Helen Peterson's Culture Study about budget culture and the Dave Ramseyification of money. And it's funny because I actually completely forgot about this piece until I was reading the acknowledgements at the end of her book, You Don't Need a Budget. And she shouted out Anne Helen.

And so out of curiosity, I was like, oh, I'm going to go looking for this post. I want to see what she wrote on Culture Study. And as I was reading it, I was like, wait a second. I remember reading this three years ago and just being blown away by it. In fact, I probably shared it in the newsletter. She had written about the origins of the personal finance industry, starting with Dave Ramsey, normalizing the aspiration of becoming wealthy for the first time working class southern and Midwestern folks, who had been conditioned not to pursue wealth, could indulge in what middle class Americans had been devouring for decades, the fantasy of being rich, a perpetual belief that a better life is within your grasp if you can just get the money right.

But it wasn't until I rediscovered Dana last year on her own platform, Healthy Rich, when someone sent me a piece that she wrote about the way in which most personal finance material willfully ignored the ways in which pretty much every major financial choice we face today is downstream of some policy choice. And I really admired her willingness to do what I would classify as calling it like it is.

But my experience of reading her new book was both a breath of fresh air in the personal finance space and frankly challenging because in the world of personal finance advice, I think it is going to be received as quite provocative. It forced me to reckon with the areas where I have yet to excavate my own hangups of what she calls budget culture or the dominant set of beliefs that shape our cultural relationship to money.

She narrows budget culture down to three primary tactics: The first is restricting how you use money, whether by spending less or saving more. The second is shaming yourself for financial moves, including spending or accumulating debt or having a lack of investments. And the third is hoarding wealth by avoiding taxes accumulating more property than you need and opposing social safety nets for others.

Now she acknowledges that these ideas might not appear explicitly in advice about how to manage money, but that the power the logic of most personal financial philosophies and have unintended downstream consequences. And I have to admit, I read “avoiding taxes” and I immediately became that meme of the monkey puppet who's looking from side to side and then shrinking backward into the bush.

But in my heart of hearts, I was like, eh, she's probably onto something here. I think she's right and that's why I wanted to talk to her today because if these methods of managing money that we've ascribed to for years and years and years, were really, really effective at creating a healthy relationship with our resources. You wouldn't see people with more than enough theoretically those who should by the terms of budget culture, be in the best possible position having won the game by its own terms, struggling to enjoy their money or give some of it away every once in a while or just loosen the purse strings a little bit more than anything.

I think it was a reminder that most personal financial advice can be divided into two camps, both of which are making an assumption about human nature. I would venture that if you really scratch beneath the surface, most personal finance advice implicitly assumes that human beings need discipline, control and punishment, that their very nature must be policed. The other says people are fundamentally good, reasonable that they're worthy of trust and confidence. And I think Dana's system is rooted in the latter.

And since it's January 1st, and I'm sure many of us are staring down the metaphoric spreadsheet barrel of another year and another financial plan, it felt like there was no better time to pressure test some of our assumptions and ask whether there's an even better way for money to help us live great lives. So with that, enjoy this thought provoking and sometimes challenging conversation.

Dana, welcome.

Dana:

Hi Katie. Thank you for having me.

Katie:

So first I want to get this fundamental eponymous question out of the way. There are going to be a lot of personal finance nerds and lovers out there who hear the words “you don't need a budget” and scoff. So how did you reach that conclusion? What does the research say about whether budgets actually work?

Dana:

The most surprising thing I found when I was looking for research on whether budgets worked was how little the research actually dives into the effectiveness of budgeting. The reason that I was interested in looking into that was what I had been seeing on dieting and the way that everything that we seem to know about dieting has been debunked by the research, even though we still keep sharing advice to diet.

And so I thought, what does the research say about budgeting? There must be something similar. We must be asking similar questions. And most of what I found is a lot of just surveys that are asking do people budget? Can people stick to budgets? And really just making headlines out of that. But there were a couple of more in depth studies that I was able to find that specifically saw that kind of lack of research and wanted to know does budgeting actually work and found that mostly it does not in the way that we want it to.

Budgeting looks a lot like dieting in the research. So it found that budgeting is unsustainable largely because it's painful to do. It increases what the research is called, pain of paying makes you more aware of parting with your money and that effect is even stronger the less money you have. And so that makes people less likely to stick to a budget because it's just unpleasant to do so that makes it unsustainable. And then even if people are practicing a budget over a long period of time, the research found that it doesn't reduce your spending or your financial stress, which is kind of the main points that we're looking for. The reason that people are budgeting. So we see the same kind of restrict and splurge habits with budgeting that we see with dieting. So if someone overspends their budget one week, they will sort of correct the following week by spending less, but they'll do the same in the reverse.

So if you see, if you're tracking your spending closely and you see that you spent less than you planned, a lot of times people will then take that as a chance to splurge the following week, which makes sense if you think about budgeting being unsustainable and unpleasant to do, people are always going to be looking for an excuse to spend more money because they've been feeling restricted. People also kind of reported that the practice of budgeting doesn't tend to reduce financial stress.

And anecdotally I have heard from people also that a lot of times keeping a budget, tracking your spending, constantly monitoring yourself actually adds to your financial stress. Just something that one more thing you constantly have to be thinking about.

Katie:

Yeah, running that tally in your head at all times, you would think that the intent in some ways is to make parting with your money harder. I think a lot of people start budgeting because they feel out of control with money and I want to make it more difficult for myself to spend freely. And so it's interesting to hear that the research shows that it will make it harder to part with your money, but then on the flip side, but that doesn't actually mean it's going to reduce your spending overall because if you have a quote good week than you might be a little bit more freewheeling the next. And so the net effect is kind of the same.

Dana:

That's exactly right. Yeah. So really the overall effect is that it just adds more stress and more tasks to your life rather than helping you achieve your financial goals.

Katie:

Yeah, I do track my spending, but it is more of a retroactive behavior than a proactive behavior. So it's not me sitting down at the first day of the month and going, what is my limit for this this month? It's at the end of the month. I go, okay, what did I spend on these various things so that I have the data? But I think that your book and your philosophy more broadly, it was really the first time that I started to question why do I feel like I need this data still? What am I actually really using this for and do I still need to be tracking it in the way that I have been or maybe has my financial life evolved past or matured past the point at which this is still a meaningful exercise?

We'll get right back to it after a quick break.

A couple of years ago you wrote a piece for Anne Helen Peterson's Culture Study and something you said really jumped out at me at the time. You said you have a small IRA $20,000 in savings, automatic bill pay, a 740 credit score. And you said, I used to give financial literacy the credit for those things, but that now the real reason why your finances are healthier now. So why is that?

Dana:

To put that in context, before this I was working as a freelance writer and honestly scraping by to make $12,000 a year. I was not doing well financially for a lot of years. I got a full-time job which happened to be writing in personal finance media. And so throughout that four years that I was working at that full-time job, I was learning a ton about money management, learning all of these money management tools and strategies that I had never paid attention to before. And in that time I built a 401k through the job, which then I transferred to an IRAI built some savings and built up my credit score from 520 or something when I started. So I thought for a long time, or at least the way that I talked to people about it was I learned so much about personal finance working in this space.

I look at how much I've improved because of it, but I realized really looking back what happened was that I got that full-time job and started making a full-time salary. And so I was able to learn things like how easily I could check my credit score, which was not a thing that I knew before, so that's really helpful.

But just knowing that wouldn't have been helpful if I didn't also have the money to start paying down credit card debt to open a secured credit card with just having an extra $200 was not a reality for me before that. So there are a lot of ways that just making more money or having access to more resources improves your finances. That gets ignored a lot in basic personal finance advice. And a lot of times financial advice is presented as if it can overcome poverty and barriers to work and access to resources and it doesn't because it just doesn't address those things.

Katie:

I think you had a lot in the book. No amount of budgeting will make not enough feel like enough.

Dana:

Yeah, absolutely. You can't turn not enough into enough just through discipline. There's always a line and it's different for everybody. Everybody kind of needs different resources. I think that's why financial advice is really tricky too, but there's always a point where you're just not going to be able to pay for your life or live a reasonably comfortable life like a viable life regardless of how hard you work or how disciplined you can be if you're facing barriers to accessing the resources you need.

Katie:

Something that I've been thinking about pretty much every day since I read your book is what you call the normalization of greed and the way that budget culture equates financial responsibility with being as rich as possible. And that was really a dots connecting moment for me because immediately I was like, oh, I can a hundred percent see how that baseline logic enables so many of the terrible outcomes that we have in the US right now because it is operating under the surface.

So rather than the reasonable response to an individual hoarding as much money as possible more than they could ever need, which would be to pathologize really that level of antisocial behavior, we celebrate it. We put billionaires on magazine covers, we put them on panels, and you write quote, “Where dieting is a response to the fantasy of being thin, budgeting is a response to the fantasy of being rich.” And so I wanted to ask you why is being rich inherently a fantasy?

Dana:

And then you put it into such great perspective of why are we not pathologizing this behavior? When you really lay it out, it seems kind of absurd, but the fantasy of being rich is not necessarily a fantasy because it's not possible. I think people would hate to hear that different people again have a different definition of what it would mean to be rich for them and feel like that is achievable. And we also have a really strong narrative in this country about that being achievable.

But the problem with it and what makes it a fantasy is that because what we consider rich I think is always going to be just a little bit more than what we have. That line is always going to be moving because we live in a culture that is obsessed with optimization and growth and budget. Culture doesn't define what is rich enough, and so inevitably you're always going to be striving for more.

Katie:

Something else that we've kind of touched on, but I want to come back to a little bit is the idea that, and I think this was true for me, so I guess I'm speaking first person anecdotally, is that I felt when I first got interested in personal finance, I was out of control of my money. I didn't have a system in place. I didn't feel as though I was making progress. And I think there's even an interesting connotation with the word progress there that we could even spend more time on if we wanted to.

But I will say that getting a system in place and learning about personal finance and putting this infrastructure into my financial life such that I was okay, I know what I'm spending on this. I have these auto transfers going to these investment accounts like cool, I feel more in control.

But you write about the fact that you can't really get money under control. It's something that you might achieve that fleeting sense of control, but that it's not, you're not going to reach a state of stasis with it. And you say, “The fantasy of being rich nags you to wonder what else you're missing no matter how much you've already done to bend yourself to the rules of budget, culture, capitalism will always disrupt your peace in the tug of war where it plays both sides keeping you striving for prosperity while depending on your inability to achieve it. Budgets promise to help you feel in control of money, but in reality they control you through restriction, shame and greed. They suck the joy out of the moment by slotting it into a category and slapping a price tag on it. They dominate your plans and goals and manipulate your decisions. They give you an illusion of control while causing you to shut out your inner voice and question your every move.”

I want to dig into that paragraph with you because one of your core principles in this philosophy is that control is actually kind of a futile goal. And you say that instead we should pursue something called ease. So what does that look like in practice? How does pursuing ease with money feel functionally different than striving for something like control?

Dana:

Trying to hold onto control is really stressful. Like you said it, that feeling of control is fleeting and you constantly have to be trying to recapture it. So it requires a ton of work and it's something that is constantly running through your mind. You can never drop the ball or you'll feel out of control again, regardless of the point you've gotten to because you're constantly going to find some new way that you can optimize some new way that you could be doing better, some higher bar that you could reach and you'll feel out of control until you cross that line and then you have that moment of relief and then it starts all over again.

So I am trying to personally and I'm encouraging other people to let go of striving for that feeling of control and trying to pursue ease, which is about quieting all of that noise, all of the internal shame and guilt that you feel and all of that external noise that's coming from our culture of money and the rules that you're learning about money, about the bar that you should be setting, the things you should be striving for.

So quieting all of that to take all of those tasks off your plate and just kind of live your life in the moment day to day, let money do what it can do for you instead of trying to figure out how you can always do more.

Katie:

Yeah, there was the philosophy that I felt like you really touched on in the book that inspired part of an essay that I wrote a few weeks ago just about that element of self-trust that I think we lose in the pursuit of control. If the logic says that you need to restrict yourself and you have to keep the handcuffs on, well obviously what that implies is that if you take the handcuffs off and you do not restrict yourself, you cannot be trusted to make good decisions for yourself. You can't be trusted to allocate your resources wisely if you're not closely monitoring your every move.

And that has been something that I've been reflecting on in the days since I hadn't considered the extent to which something that I had maybe perceived as like, oh, I'm just type a high achiever. I'm just really goal oriented was like maybe you just don't really trust yourself that much. Maybe you just don't think that if you give yourself the freedom to make these choices without this restriction that everything will fall apart. I think that that was a kind of an interesting, again, mental framework shift in the way that I was relating to these numbers and this tracking and these decisions that I was making.

Dana:

Absolutely. If people take no other message from the book, what I really want people to hear is trust yourself, learn to trust yourself. It's a big project, but there's a lot that can be done and there's a lot in the book about kind of exercises to help you do that. And a big part of it is letting go of that message that says you can't be trusted to make decisions for yourself. And again, that's something that I'm really pulling from diet culture.

We talk about this idea of intuitive eating. People are tracking calories because they think if I don't do this, I will lose control. I'll eat too much. And then all of the things that we say goes along with that. And that's what I hear when people say that budgeting makes them feel more in control is this feeling that they believe if they're not planning and tracking every dollar, that things will completely fall apart and their life will be destroyed.

Because that's the messaging that we get really no matter what you've got access to, what your resources are, what your income is, how much wealth you have, we still have that message. It has to be tracked. We have to be disciplined. But it's definitely worse for people who don't have a lot of resources who are living with poverty or low wealth or low income that the message is that you're in that place because you're not disciplined enough and you need to follow this set of rules and not trust yourself to make decisions with your money.

Katie:

Sometimes there can be a tendency when you're developing a new personal finance philosophy and I mean I read a lot of this information. I read and listen to a lot of different thinkers in this space who all kind of approach these problems and these challenges in different ways. And I think sometimes there is a tendency to be like, oh, these are just semantic shifts that we're making. But I think in this case, there's one example in particular that I was like, oh, she's not making a semantic change here.

This is actually a different way of relating to resources. You distinguish between the emergency fund, which is a bastion of popular personal finance belief systems that basically says this money is only for emergencies and a new couch is not an emergency you lazy piece of shit and you challenge it with this idea of a comfort fund. And again, this is not just like a shift in how you're using the language around it. This is actually a shift in how you think about what this money is for how you use it. So tell us why.

Dana:

So I think it's a really good point that it feels like a semantic shift. A lot of what I talk about feels that way, and part of that is probably because I'm a writer at heart and so how I relate to the world is through words. And so changing words really changes the way I relate to something. Using the term emergency fund and building an emergency fund implies that any loss of income or loss of resources constitutes an emergency in and of itself. If you lose your job and you lose your income for a certain amount of time or something else like that changes in your life, that changes your access to resources is an emergency in and of itself. And I don't want to relate to money that way. I think we need to see money as one tool that we use in our life.

It's one piece of our experience in the world, but it's not the whole thing. It's not the defining experience. It certainly can have a big impact. I don't want to downplay the fact that if you lose your income, that is still a big deal, but changing that language to talk about your reserve of money as a comfort fund also opens up the possibilities for what you can do with it. So you don't have to just wait for that kind of life altering emergency to spend from that fund. You can use it for anything that adds comfort to your life which you deserve, whether it's adding luxury, whether it's making a change that you need to make or whether it's weathering some kind of unexpected emergency. And that can be, like you said, buying a new couch. If you are sitting on Amazon build your own furniture for years and years and you've got this huge emergency fund that you're just not touching, you're just living a miserable life (if that furniture makes you miserable, some people are fine with it).

But if you're just uncomfortable in your space but you have this huge emergency fund that you're not touching, why are you not using that to add comfort to your life? I shared the story in the book of a friend who moved during the pandemic across the country to the west coast and he wasn't buying, he wouldn't buy himself a car even though he was in a city that required a car pretty much like the public transportation was not really enough to just live your life.

And so he was just living this kind of austere life for no reason when he had tens of thousands of dollars in savings, hundreds of thousands by the time I talked to him and was just not doing these things because he didn't feel worthy of spending money on himself in that way. And also because he was constantly afraid that if he spent money in one way, he would need it in the future for something else.

And I think that goes back again to trust in yourself. So there's a self-worth that you need to develop to understand that you deserve comfort in life. That is a basic need, but there's also a trust that you will be able to rebuild if you spend that money. You can think of it sort of spiritually, like it will come back to you, but you will be able to rebuild that fund in whatever way earning more money or whatever it is, and it'll be there when you need it. It was there for you this time. It can be there for you in the future, so don't be afraid to spend it on something now you can decide what's worthy. It doesn't have to be something emergency. And so I think the way that we talk about emergency funds, the kind of advice that we get using that term, but also setting the goal of three to six months of income is what you need to save or bills or whatever. All the different rules also kind of frames it as something that can only be used if you lose your income.

Katie:

Yeah, and that's what I mean when I say this is not just a semantic shift because I think that sometimes I'll hear people say things like, well, I like to call it this because that's more fun. But the underlying logic is still the same of you're only using it for emergencies. It doesn't really matter what the hell you call it if the underlying rules that are governing whether you can touch it or not are the same. And that's what I found so interesting about your approach. And again, it's like I would find myself having these reactions of being like pearl clutching of like, but you can't spend it on comfort. And then I'd have to interrogate that response and be like, but why not? If you are living in austere life, and I think the person you're talking about, if I'm thinking of the same example, had half a million dollars saved?

Dana:

That sounds right.

Katie:

And was not allowing themselves any creature comforts. And it's like, well, what is the point of that? You can have half a million dollars and still have a pretty bad relationship to money. Really appreciate that. Another idea that jumped out to me a lot is this idea that community and government resources are just as valid as personal savings. And you're right about people who qualify for benefits that they either don't or won't apply for. And I think there is this sort of mental separation in our heads between resources, you individually accumulate through your own hard work or whatever and that what you might gain from collective resources. I'm just curious what you make of that.

Dana:

We put so much moral baggage on using charity or public benefits that I hate to see because it keeps people from using them. There's definitely, like you mentioned, that there are a lot of people who qualify for benefits in the United States who don't use them, and a lot of that is because of the systemic barriers that exist that makes it difficult for people to apply. The systems are set up to be difficult to use, but a lot of it is also because of the stigma of using public benefits or going to charity. I think this has changed, but when I was growing up shopping at a thrift store was really taboo, was really stigmatized, and we can change those things.

We sort of have done that. It's become sort of more of a trendy thing, but the way that we see that I think is the flip side of putting a ton of moral value on work that in American culture in particular, but under sort of any capitalist society, we fetishize this idea of toil and struggle. And I think that ties into how we approach money management too, is it becomes about discipline above all and we just look for ways that people can be disciplined. And so the idea of giving in and accepting collective resources is counter to that.

Katie:

Well then let's talk about the idea of earning a living then earning a living. You write about two ideas that I actually think might superficially appear to be in conflict with another, but I think feature a distinction that is worth making that you both should expect your job to provide you with more than just a paycheck. And that quote, “Passion work can be a trap.” So I wanted to talk to you about that because I think that there was a distinction or a description that you would include of the way that we relate to our work and what we expect from our work and the role that work can play in our lives that I would love to hear you speak about.

Dana:

Yeah, so passion work, anyone who works in nonprofits or academia is probably familiar with that term, but it's the idea that you are doing work because it aligns with your values or it's where your heart is at. It's following your passion into your work. We're starting to use this quite a bit in startups too, and it becomes a trap because it trains you to believe that you don't need pay or benefits or respect from your job as long as you care deeply about the work that you do. So people stay in really low paying jobs or allow themselves to be overworked, work too many hours and not get the kinds of benefits that they need or the kind of care that they need at work because the goal that they're trying to achieve is that they think is important. And being passionate about what you do is important, but that's only one dimension of what makes for good work.

You also should be able to expect a job to provide for you financially and to support your professional development and goals and to also care for you as a whole person. So providing retirement benefits to help you as you age and providing healthcare to take care of you, providing time off so you can take care of your family or grow a family, things like that. All three of those dimensions are important. And a lot of times in our culture, especially among millennials, we saw this a lot that we started to pursue passion because we decided we're not going to work just for the money, but then we sort of threw all of those other things out the door and just accepted jobs that allowed us to follow our passion. And I think what we're realizing now, we are sort of reversing that trend and understanding that we need to find all three of those things in work. It's not good enough to just be passionate about what we do

Katie:

And we'll be right back after a message from the sponsors of today's episode.

You cover both worker cooperatives, worker co-ops, and unions in your book. And one line that jumped out at me was that unions are ultimately still a tool for capitalism because while they can help level the playing field between owners and workers, they don't actually challenge the inherent structure of that dynamic. And I thought a lot about how worker co-ops or that is workplaces where the business is owned and operated by its employees might be the closest existing structure that we have to a truly democratic workplace.

And in a previous episode, journalist Hamilton Nolan joined us to talk about how American workplaces are fundamentally authoritarian because workers do not get a vote. You actually are in quite a rigid system of control, so to speak. You have very little freedom at work. I mean it obviously is going to depend on the job, but structurally speaking, your standard American employment, I want to say contract, but it's not even really a contract because you're probably an at-will employee that can be let go for any reason.

Do you think about worker co-ops in the same way? Is this something that you think about a lot because I find myself constantly coming back to this of how do we make work in America something that fundamentally has dignity, something that fundamentally is not exploitative. And I think if you're thinking about that theory of surplus value and that in capitalism if you are a worker that is employed by someone else, you are by definition producing more than you are receiving in return because that's how profit works. You have to be creating more value, they're paying you or there wouldn't be a profit structure. So do you think about co-ops as a possible realistic step forward here? How do you kind of conceptualize these ideas personally?

Dana:

I do. I think maybe a move toward worker cooperatives is a little bit of an idealist way of thinking, but I try to think about how it could look in reality. I know that unions are completely necessary because of the way that we currently structure employment. I do critique them as a tool of capitalism, and I think that's true. I don't think they're the real solution to the inequality that we have between basically owners and workers in the way that we structure work in this country.

But we would ideally need to work towards some form of worker ownership and a democracy in the workplace to give workers truly a voice. And power worker co-ops are inherently democratic because they literally give workers ownership and a vote and technically there's a vote with corporate structures and there's an opportunity for owning equity and private companies or owning shares of a company that you work for. But the people who are being affected most by most policies don't really get a meaningful say in how those companies are structured or most importantly, what happens with the profits. I think that's the biggest difference that democratic workplace can have and especially a worker co-op where the workers each have an ownership share because they can decide what to do with those profits. They don't just automatically flow up to some owners or shareholders.

Katie:

Yeah, I was on a really big Defector Media kick at the end of last year because they're cooperatively owned and I find any successful example of this to be so inspiring and also like, okay, I want to learn everything about how they're making that happen. Everything from the logistics of how they built it to how they make decisions together to the fact that they are producing really good work, they're growing, people are happy, they're paid well. It's just amazing to see examples of like, yeah, this is possible. It might not be possible for the entire economy to shift that way anytime soon, but it is certainly possible at the individual or the workplace level, and if you're an entrepreneur building in that way, I find it very inspiring.

Dana:

It really is an ideal structure because we should not have workers toiling in order to make profits for people who are not doing that work. We should all be sharing in the fruits of our labor and we see kind of these isolated incidences of it working well, and it probably kind of has to be that way. When I say that it's an ideal structure and a sort of idealistic to imagine moving more toward worker co-ops, A lot would have to change in our economy because so much relies on corporate stock ownership, just our entire sort of financial system and financial plan relies on that. So something about that would have to change.

Katie:

For sure.

Dana:

But also, I don't know, and this kind of gets above my pay grade, but I don't know that a worker co-op can work at the scale of multinational corporations. It doesn't really make sense to try to sort of democratically run a workplace in that way. So we would also have to break apart a lot of companies into much smaller pieces, enforce antitrust laws and break apart monopolies and start to break down some of that to get to something that works on a more human level.

Katie:

I completely agree, and I share your feeling of like, this is above my pay grade, it's above my pay grade too, and I completely hear that you're constantly, I think having to bridge that gap between where are we trying to get to? What would an ideal end state look like? How can we shoot for that in a way that can make meaningful change for people more quickly than a hundred years from now or that wouldn't require the entire financial and retirement system in the US, the pension system, everything is tied up in this current structure, so it's not something that you can flip a switch and change tomorrow, but I find these types of conversations and ideas to be really important because I think they get people thinking bigger when you said what we need to do is create a system where laborers are really benefiting from the fruits of their labor. I don't think that's a controversial statement.

I think that a lot of people, whether they identify as a capitalist or a Marxist, would probably agree with the idea that people should be benefiting from the fruits of their labor. And so I think the areas that we can find common ground with one another and maybe realize we actually, even if the way that we think we're going to get to those outcomes varies. I do think that our core values and our core sense of fairness is often more similar than it is different,

Dana:

And that's why we need to have these conversations, even though they seem very idealistic and far off and pie in the sky. But it's important to denaturalize the system that we're living under now and to think about how we could do it differently and probably even more importantly, kind of start at the beginning and help people understand that what we're doing now is based on a series of choices that were made and so we can make other choices to do different things, and you can't do that without knowing what the possibilities are.

Katie:

Yeah, denaturalize, that's a great word in my head right now, I'm seeing the word cloud going back to pathologizing, the hoarding of extreme wealth. I think the most radical thing in your book is your of debt that you don't actually have to pay back all of your debt. And at first I was like, whoa, but then I read your case and I actually found it really compelling.

So you write about the extent to which a language of morality is often used to control the borrowers, but it's never really expected. In the same way of the lenders, if you don't pay your mortgage for example, they'll take your freaking house away. They don't care that they're removing you from your shelter. It's just business to them, right? They're going to do what's best for the bottom line with no moral regard for you as a human being. There is that kind of violence of bureaucracy that enables this type of behavior to happen, and you write that lenders act with the explicit intention of taking more than they are giving you. That is the entire paradigm of paying interest on a debt and that you should not feel a moral obligation to a financial institution. So I am curious, Dana, how that actually changes. If someone adopts that mental framework, how does that actually change someone's approach to debt payoff and how they think about debt payoff?

Dana:

It's just a numbers game for the lenders and the creditors, like you said, they're willing to just take your house because that is how their system works. So it should just be a numbers game for the borrowers too. Rather than thinking about having this moral obligation to repay a creditor as if it was our neighbor that we borrowed money from, we should be thinking about how to within this system reduce the burden of debt in our lives, just make it a numbers game in the same way that it is for the lender and understand, like you said, we don't have a moral obligation to pay off that debt.

So debt payoff doesn't have to be a priority for you. Instead, you can take steps to deal with debt in whatever way works for you. Whether that means making a plan to pay it off or whether that means figuring out how to live with debt in whatever way makes sense.

You can learn how debt products work and know all of your options rather than just looking into debt payoff strategies. So I think student loans are a really good example. There's a lot of advice in the personal finance space on how to pay off your student loans, how to, and that's as far as the conversation about reducing that burden goes. But actually the majority of us have federal student loans, which come with a ton of relief options that are built into those products to make it easier for us to live with them. So there are income driven repayment plans that can drastically reduce the monthly payment that you owe and you'll accrue interest while you pay off your debt that way because you're taking longer to pay it off and you're making these smaller monthly payments, but it reduces the burden of that debt in your day-to-day life.

So I'm on an income driven repayment plan and I make the minimum payment toward my student loans. They have ballooned with interest, but I don't care because I know exactly how those products work. I know the kind of effect they have on my credit score, which is not huge, and I know what it takes to keep from accruing extra fees or to go into default or anything like that that might have a greater impact on my finances or on my credit score or anything like that. So I'm just doing what it takes to keep that burden down, and I don't care about repaying the debt as quickly as possible because I don't have a moral obligation to, and I also don't have a legal obligation to, I'm meeting the obligations that I agreed to when I took out that loan. So I've had that conversation with people kind of tighten up at that idea.

They think what you took on the debt, you should pay it back, but again, I didn't borrow the money from my mom. I'm not taking away, this is built into the system. Our system of debt and credit products are a result of a system where we allow the majority of resources to be held by this tiny minority of people, and we exist in a culture where most of us are not paid enough and we don't have enough access to the necessities that we need in life, so we have to appeal to that minority to access the resources to get what we need, and we do that through debt. So if you look at it through that lens, you can really take away a lot of that sort of moral obligation and realize they don't have any more right to those resources than I do, and so I'm just going to follow the rules that the system laid out and that can include bankruptcy. If you find that you're not able to repay that debt, then bankruptcy is a legitimate option or any other kind of between rapid debt payoff and bankruptcy, anything kind of on that spectrum, whatever makes sense for you are all legitimate options.

Katie:

It was really eye-opening, I think, to look at it from that standpoint of, I mean, if you're a subprime lender going to get a car note, they're not like, well, it's going to make it really hard for them to pay this back if we charge them 12%, so because we're already super profitable, let's just charge six, right? It's like, no, they're going to charge you as much as they think they can get out of you. And so the idea that individuals should also approach interacting with credit as though it is a business decision that just comes down to the numbers, the legal options, and remove that emotional or moral sense of owing something to somebody else when the other person on the other end is a faceless financial institution that has unfathomable power. It's like I think there are a lot of people that would be helped by having that psychic burden lifted as they're trying to think through what their best options are.

Dana:

Yeah, it's really important to understand that the outcomes or the consequences of carrying debt are not moral punishments either. I think we try to avoid credit card fees and interest and default and things like that because it feels like a punishment for something that we've done wrong, but those are also just things that are built into those products to help the credit card companies or the lenders make money and to mitigate their risk and whatever. Those are just things that are built into those products for the business transaction that you're making, so understand what those consequences are and how you can live with them. If paying credit card interest works into your plan, go ahead and do it if that's what makes sense. So I think that we just need to pull away all of those layers of moralizing from those products and those consequences.

Katie:

One thing that struck me overall while I was reading your book and getting familiar with the finer points of your philosophy was that it is clear to me that your fundamental operating position from which you are building these ideas is that human nature is fundamentally good, that humans are inherently and fundamentally worthy, that you can trust yourself and that a financial system should be built on that premise, not the opposite premise, and I'm curious if that resonates with you, if you've ever thought about it in that way.

Dana:

100%. Yeah. We talked earlier about this idea of trusting yourself, and I think we need to turn that on other people as well. I talk about generosity in the book and understanding that when you give money or resources to someone else that doesn't have to feel like a loss to you. We can think in this more kind of interconnected way, but that fundamentally learning to trust yourself and to trust the goodness and the people around you, if we could all truly do that and embrace that belief, then I think that would really fundamentally transform our relationship with money in this culture because we would just make different kinds of decisions.

If we could trust ourselves to use money, we wouldn't feel that need for restriction. If we could trust what other people are doing, we wouldn't feel the same kind of judgment that we're always feeling. We wouldn't feel the kind of distrust that I think really leads to a lot of the kind of greedy behavior that we participate in, even though we're mostly not greedy people. All of that sort of distrust and belief that humans are fundamentally selfish or bad or have bad intentions is leading to a lot of things that are wrong with our financial system.

Katie:

Human behavior doesn't exist in a vacuum. We are responding to our circumstances and our environments, and if the environment that we are in is exerting these forces that are unnatural, I mean the broadest sense of the word, for example, you are being algorithmically targeted at every moment and marketed to not just like, here's a thing you can buy. It's like, here's a thing that this incredibly sophisticated algorithm has determined is uniquely calibrated to what makes you transact, and there's this totally unnatural level of temptation surrounding us at all times in this environment. Then I guess it doesn't really surprise me that sometimes we clinging to what also might feel like unnatural solutions or distrustful solutions that feel like white knuckle, cold turkey grip of like, I got to just hang on and try to, I'm going to do a no spend month. I'm going to do a no spend year because it feels like the only way to protect myself or shield myself from just the onslaught of messages that I'm constantly being exposed to. And I'm curious how you think about trust in that context and developing self-trust in that context.

Dana:

It's really tough. I think so much of our relationship with money is just the result of this really horrific capitalist system that we're forced to live under and we're responding to that often the way that we feel about how we use money, the way we feel about how others use money just ends up sort of being that, and I think the best deterrent to that is this idea of denaturalizing that environment, understanding that capitalism as a financial system that even all of the financial advice that we hear, like we were talking about with debt, like we talked about with budgeting, everything that we sort of is presented to us as the way things are to start to question that and break it down and understand that it was a series of choices that was made and we can make different choices going forward to change that.

I think that's the first step to starting to break yourself free from the chaos of those systems and that environment that you're talking about. And then I also am a big believer in knowledge, and that part of that is probably because I'm a financial educator, part of my job is to explain how these things work. So there's a lot in the book where I just break down how different debt products work and how different kind of investment options work and things. Even though I'm not giving the same kind of advice that you're seeing in a lot of personal finance, getting that information is still really important because it empowers you then to make the decisions that feel right for you, and so you can sort of accept all you want that there's a problem with capitalism, but just sort of knowing that philosophically doesn't help you make day-to-day decisions unless you understand how the products and the systems under capitalism work, and it's really scary to make a decision like, I'm not going to pay my credit card debt if you still just believe all the things that you've been told about credit card debt, that it's going to destroy your life.

So you have to also understand how that product works and what the consequences are so that you can choose the ones that make sense in your life, and you can never, in my lifetime, I'm sure that I'm not going to break free from the chains of capitalism because that's a huge project, and no one can do it individually, and it's going to be a very long project to do it even collectively if we can gather the collective will to do that, but you can start to take those little steps to just reduce the burden in your day-to-day life and reduce the financial stress that you feel that because of the noise of that culture.

Katie:

We've analogized a lot to diet culture. I also think that there's an analogy to be made here to beauty culture and the way that I have gone on my own sort of journey with beauty culture where growing up I had to kind of accepted, okay, this is my hot girl Bill of rights. I need to have the highlights. I should have perfect makeup, perfect nails, not really questioning why is this the standard? Why do I feel like this is how I should look to be treated with dignity as a woman? Then, okay, now I'm starting to understand how beauty culture functions. I'm starting to understand how beauty standards are in oppressive force. They're a stratifying force. I'm starting to understand how they work to entrench these systems of hierarchy, and then, okay, now I have a more, I would say, accurate understanding of the systemic context, and now I can make different decisions at the individual level that feel more aligned with who I am as a human being and what I want to participate in, what I want to support with my money, time and energy and what I don't.

So I often think of that as one of these examples where, yes, sometimes it can feel really philosophically confusing to see the world in this new way and then be like, well, where does that leave me? Because yeah, I still exist under beauty standards. I still am judged by the same standards that I was judged by before, but that doesn't necessarily mean that I have to participate in the same way or continue to make the same decisions that I was making before.

Dana:

That's a great analogy too. Once you get to that understanding, then you can decide to throw out all of the beauty standards and decide that you are going to dress the way you want. You're not going to dye your hair, you're going to wear the makeup and do all the things to meet whatever those standards are because you understand that those standards are made up and they're unfair and they're oppressive and whatever, but you can also decide that understanding that you live in this society and that those beauty standards give you access to a lot of things. You can also decide that that's important to you and that you're going to do that, and it's much less stressful personally, I think to do that sort of with eyes wide open to understand how that system works. For sure. Ultimately, there are problems to continuing to perpetuate the system and the people who don't have access to all of the things that help you meet the beauty standards. You sort of continue to perpetuate that hierarchy, and there's a whole conversation to be had there, but it's also asking a lot of an individual to just say completely change everything and live against all of the standards that we've set in our society, but at least understanding the context is really important, and opening your eyes to the fact that that is a designed system is really important.

Katie:

Yeah, I love that you brought it back to that because I think you're right. You can almost apply the same logic of budget culture in the other direction there of like, all right, well now you know how to be an anti-capitalist, so if you're not divesting from the stock market, you are failing. And I think that that it's very important to bring it back to, you can gain all this knowledge, you can shift your perspective, but ultimately it is your decision to what extent you continue to participate, how you participate, the things that you might be able to reconcile. Okay, I don't want to invest in the S&P 500, but I do want to retire, and so how am I going to approach that decision in a way that allows me to sleep at night and also doesn't put me in a financially compromised position such that like, oh, I'll have to work for income for the rest of my life because this is still the system that I live in.

I think that you had written about this in an article called “I Want More Money, An Inconvenient Truth for an Anti-Capitalist,” and I got the sense in reading it that you were feeling a sort of cognitive dissonance around recognizing that budget culture was not worthy of this wholesale embrace and that, yeah, but I still, I'd be pretty nice if I had a little bit more money, I would have an easier life if I had a little bit more money. That was back in March. How did you end up reconciling those feelings have you reconciled them?

Dana:

I absolutely haven't. I don't think you can because I can't completely divest from this life in this world where money is required for me to have shelter and clothing and food and comfort. I can't just completely let that go. And so it's a constant contradiction that you end up living with and that's why it's kind of annoying to have your eyes opened up to some realities of the world

Because then you're just constantly faced with decisions. And that was really one of the hardest things in writing the book too, is trying to reconcile those things. The chapter on investing was probably the hardest one to write to acknowledge the ethical complexities of investing and the reality that if you don't want to work for income for the rest of your life, you probably have to invest in some way. That's just kind of a reality that we live with and we have to make the choices that we kind of have the fortitude for given that reality.

And I want to constantly be having this conversation so that we understand why we're making these choices, but it's just not possible really to live a life that perfectly rejects a paradigm when you're living in a world that still runs on that paradigm. And it's important for anyone having this conversation and encouraging people to reject budget culture. I understand the responsibility that I have in this position to not try to just offer up some other formula for the right way to live because the point is rejecting the fact that those formulas exist.

Katie:

That's powerful. That's really powerful. I think too, when I used to hear people talk about the idea that there is something ethically dubious about investing, I didn't really understand because I was like, well, how do you figure I am putting my money into this account and it's going up in value? Isn't that great? I'm being so responsible. But once I started to have a more expansive appreciation, I think for the way that our system works of, okay, the reason this corporation has profits is because it is paying its people less money than the value that they are creating.

And so now as a shareholder, the profits that you are capturing is resources that really rightfully belongs to those people. And at the same time though, you are a worker who is probably creating more value than you are capturing. And so that's kind of how I have squared it in the past of like, Hey, if I'm going to be a worker in the system, the best way for me to actually, ironically or paradoxically capture the value that I'm creating is to become a shareholder.

But the problem is that even if I think it's something like what 60% of Americans invest in the stock market, it's so radically top heavy of something like the top 10% of Americans own 90% of that wealth. So we are not benefiting equally from it. But there is something to that idea of as a laborer in this system, becoming a shareholder is really the only way that you can benefit from the work that you're doing in a meaningful way or capture that value in a way that is compounding growing. So that's kind of how I've thought about it, but again, it's an ever evolving. As I learn more, my perspective shifts.

Dana:

I also have to recognize too, as a financial educator, who am I to ask people to forego that opportunity? Like you said, investing is one way for workers to take just a little bit more of that pie. It's still wildly unequal and unfair, and it's not a solution by any means. But who am I to ask you in your lifetime with just the day-to-day life you're trying to live and the family you're trying to raise or whatever someone's circumstances are to just forego that. And so I do say, I make a point to say, if you have the fortitude, which doesn't mean if you're strong enough or if you're good enough or if you're moral enough, but just if you feel like this is something that you can try in your life, try divesting from the stock market, see how it feels, try changing some of these rules in your life, not just stock investing, but giving up budgeting, rethinking how you're dealing with debt, all of these things that feel really radical, take in these ideas and act on them to the extent that it feels like it makes sense for you, it's not really fair to just ask individuals to make those changes.

Katie:

So I want to throw you a curve ball because I want to talk systems versus individual choices with you. Let's talk about what the ozone layer taught you about our political and personal finance choices.

Dana:

Yeah, I so appreciate you digging that up. So I don't even remember how long ago it was that I wrote an article about the ozone layer and aerosol hairspray. So I learned very recently that we have reversed the damage that we were doing to the ozone layer.

Katie:

Oh, no. I mean I learned it from you—I was like, that's good news. Glad to hear it guys. Well done.

Dana:

It feels like it should have been enormous news, huge headlines. But anyone who was around in the eighties and nineties remembers how much we were talking about this growing hole in the ozone that we were just apparently destroying the ozone layer, whatever that is that protects us from the sun and that if it kept happening, we were just going to destroy all life on earth, was the basic message that we got. And kind of the worst part of that was that the message that we were getting was that it was happening because of some chemical in aerosol, in hairspray, so that we were causing this problem by buying aerosol hairspray, which was really important at the time for a lot of the styles hairstyles in the eighties and nineties. And so we were trying to make this switch to like, oh, I have to buy the pump hairspray.

And that was the kind of individual consumer choice that we were making. But it was completely unsustainable because that product was not good enough and because the aerosol products kept being produced, and we still kept having that option. So it was just really hard to make that choice as an individual. And it turns out that we didn't have to solve that problem at the individual level. What ended up happening with the ozone layer was that this was in 1987 too, which I'm surprised it was that long ago, but 20 countries, and over the years it's come up to 200, have come together and signed this thing called the Montreal Protocol that regulates ozone depleting substances that are in things like aerosol. And they also created a fund to help developing countries comply with the new standards. So we basically just had this political and social will behind this problem that decided we're going to solve it at the regulatory level rather than just with this scolding at the individual level.

And it was exciting for me, and I wrote about it on a personal finance blog because we try to address so many things through individual consumption that are completely systemic problems that need systemic and political solutions. And I wanted to share the story because it's really easy to think that things that need these big political systemic solutions are going to be impossible to solve because are politics in this country are such a mess and so divided that it feels like we can't ever make any progress. But something like that, that was just this, we thought we were just on a path to destroying the world because of hairspray is actually a problem that was reversed. The hole is still there, but it's shrinking because we had regulations, companies had to innovate in a different way. They didn't stop making the products. We didn't give up aerosol hairspray that's still on the shelves, but it no longer has those substances in it that can hurt the ozone layer, and we can tackle a lot of problems in that way instead of asking individuals to make different consumption choices.

Katie:

And I appreciate that example so much because to your point, I think sometimes it's hard to find examples of that nature of their being political will around something to the extent that it actually a change is made and a solution is found. Do you ever struggle with feeling as though that approach can have a limited wingspan when the political will so often is not there? Because I've been thinking a lot about this in the context of the textile and the consumer electronics industries and the way in which the waste problem seems to me from the cursory research that I've done pretty out of control.

And so on one hand I completely agree that we have to think bigger about these problems. We have to not put the impetus on individual people to make okay buy the cardboard straw and we're good to go. Yet at the same time, when I observe these excessive, excessive levels of just wanton hyper consumption without any regard for the consequences on single use plastic TikTok, I'm like, yeah, but you should also just probably stop fucking doing that. There is some level of agency that we have as individuals not to triple down on the problem by throwing our hands in and just buying cheap shit made in conditions that are basically a human rights violation. And I think sometimes I get frustrated with the extent to which well-meaning arguments that are made in good faith of like, no, we need to put pressure on political leaders to regulate this will sometimes get abused of like, oh, okay, then it doesn't matter. Then I'm going to keep doing my SHEIN hauls because who can stop me? Do

Dana:

You know what I mean? Absolutely. We do have agency to some extent, you can make those individual choices use less single use plastic. I recycle and I compost and wear mostly secondhand clothes and buy pasture raised eggs. But I think that those things don't make the kind of difference that we hope they will. I think they do more to soothe our conscience in the face of this just enormous systemic problem that we don't know how to solve most plastic. This was another thing I learned just a few years ago. Most plastic is no longer being recycled because we're just making too much plastic in the world. And that's not just single use plastic that's recyclable products. There's nowhere for that to go.

Katie:

Of hearing is I'm using my budget culture lens on the talkers. I'm like, stop buying the tiny junk a little bit.

Dana:

Yeah. But I do think that, again, we're living in this world that is set up with the conditions for that kind of consumption. We are all overworked. We're dealing with mental illness. We're isolated and lonely. People are talking about this, the loneliness epidemic in America. We need to address those overarching problems. And in the meantime, I don't think it's useful. And it's almost kind of cruel to say you can't use a straw at Starbucks or you're the one causing the problem when it's the one piece of comfort that you have in an otherwise kind of horrific existence that rather than trying to take that away from individuals, we need to be addressing how those plastics are produced and be putting resources into bringing down the costs of more sustainable products. And in the meantime also helping to deal with people's mental illness, helping to stop the conditions that are overworking us and provide childcare for people so that it's easier to raise a family. All these things that are making that existence horrific. We need to help with that too.

Katie:

Yeah. Well, you know what? I think we just revealed the same underlying thing that I referred to earlier where I said that your whole philosophy is based on the idea that humans are fundamentally good. And I'm like, yeah, but what about the restock talkers, Dana? Are they good? Are they good? And you're like, yeah, that's it. You still got to back up a little bit. They're good too. They're good too. Yeah, which I appreciate.

And also this piece about conscience, right? Because I think that is, I was like, I going to buy a new phone. And then I watched that documentary and I was like, never mind not buying a new phone anymore. Probably not because my phone would've been the tipping point that tipped us into climate catastrophe, but because now I'm kind of aware of the fact that I don't really need this and this would contribute to this problem. And so it's more for my own feeling better about my choices that I'm making that choice so interesting all around.

Dana:

And that's all helpful too in your life. You don't need to just fill your life with garbage, but if there is some benefit to that, if there's some reason for it, I would say it's not your fault that the world is on fire. We need to hold people accountable. And again, I share stories like the ozone layer thing to remind us that we can do that because the only way that we generate political will is by having the will of the masses to put pressure on our leaders to make those changes. And it's really hard in the face of what seems like an unmovable system to put the work into putting that kind of pressure on our leaders. And we just have to remember that change actually can be made. We can actually do those things and start to make that change at the systemic level so that we can just keep using aerosol hairspray. And most people didn't even realize that anything changed.

Katie:

Oh man. Thank you so much for joining me today.

Dana:

Yeah, thank you for having me.

Katie:

This is the perspective that I think counterbalances a lot of the messaging around what it means to be responsible with money and just gently pushes back that maybe responsibility doesn't need to mean what we think it does. What if there were a more fluid and generative way to relate to money that didn't revolve around ideas like control or getting rich? I know that's kind of a counterintuitive idea in a Rich Girl Nation, but I think there's a twinkle of Ramit Sethi’s methodology in this interview. And if you're like me, you might feel like it called into question some of your most centrally held beliefs. One tactical thing that I'm considering doing because of this conversation is revisiting how granularly I budget. So rather than tracking totals for every single minor subcategory every single month, what would it be like if now that I'm seven years into managing my personal finances, I let go of the reigns just a little bit?

What would it feel like? What would it look like if I didn't track my spending at that level? The question, and Ramit’s conscious spending plan from a few episodes ago inspired me to start working on something for later this month about how one might use a wealth planner in conjunction with a way paired back budgeting section. I was on the fence about that. And then I had an email come in from a listener who was like, hey, what if I don't want to die with way more money than I started with? What if I'm cool with dying with zero? Is there a way to financially plan not so that you have a ton of money or more than you could ever need, but you just take what you need and that's it. And I was like, that's a really good question. We should have some math to go along with this

 So that is where we will be headed in a couple of weeks. But in the meantime, we'll see you next week with a reflection and update more generally on Money with Katie's last few years and where we are driving this ship in 2025. Happy New Year from all of us here at the Money With Katie Show.

Our show is a production of Morning Brew and is produced by Henah Velez and me, Katie Gatti Tassin with our audio engineering and sound design from Nick Torres. Devin Emery is our chief content officer, and additional fact checking comes from Scott Wilson.