The Only Two Budgets You’ll Ever Need: Top-Down vs Bottom-Up with Glen James
Sep 26, 2025
By Molly Benjamin, Founder of Ladies Finance Club
Listen to the full podcast here.
Budgeting often feels overwhelming, but according to Glen James, host of My Millennial Money and creator of the Glen James Spending Plan, there are really only two types of budgets you’ll ever need: top-down budgeting and bottom-up budgeting.
In this episode of Get Rich, I sat down with Glen to unpack these two approaches, why your financial habits matter more than spreadsheets, and how to create a spending plan that actually works in real life.
Top-Down vs Bottom-Up Budgeting
At its simplest, budgeting comes down to two approaches:
- Top-down budgeting starts with your income. You decide how you’ll allocate your money across categories (like savings, bills, and fun) and spend within those limits.
- Bottom-up budgeting starts with your expenses. You list everything you spend money on, compare it to your income, and adjust from there.
Glen explained that both approaches are useful, but which one works best depends on your stage of life. Students and young adults with fewer financial commitments might prefer a top-down budget, while people juggling mortgages, car loans, or family expenses may find bottom-up budgeting more realistic.
Building a Spending Plan That Works
Rather than focusing on strict budgets, Glen advocates for a spending plan. His approach helps people understand how much it costs them to “wake up each morning” and run their lives. From there, you can allocate money into a few key accounts:
- Cash hub: all income goes here
- Emergency fund: your financial safety net
- Everyday account: food, petrol, day-to-day spending
- Lifestyle account: for things like holidays, gifts, or Christmas
This simple money management system helps savers give themselves permission to spend without guilt and gives spenders the guardrails they need to stay on track.
Breaking Budgeting Myths
One of the biggest budgeting myths Glen busts is that you have to be “good with numbers” to succeed with money. In reality, personal finance is less about complex calculations and more about consistent financial habits. Automating your accounts and payments removes willpower from the equation and keeps your plan on track.
He also warns against waiting for the “perfect” budget before you start. A good-enough plan that evolves over time is far more effective than endless tweaking that delays action.
The Four Levers for Budgeting Success
When a budget feels tight, Glen reminds us that there are only four levers you can pull:
- Increase your income
- Reduce your expenses
- Adjust your savings goals
- Cut something out completely
Understanding these levers helps you regain control and adapt your plan without giving up altogether.
Real-Life Budgeting Success Stories
Thousands of Australians have used Glen’s spending plan to get out of debt, save for a home deposit, and finally feel in control of their money. One listener, Mel from Brisbane, went from living week-to-week with no savings to buying her first home with her partner, simply by following the system.
Budgeting doesn’t have to be complicated. Whether you prefer a top-down or bottom-up approach, the key is creating a realistic spending plan, building strong financial habits, and choosing your “hard.” As Glen puts it:
“It’s hard living week to week, and it’s hard saving. But both come with sacrifice. So what hard do you want?”
If you’ve ever struggled to stick to a budget or felt like your money vanishes before payday, this episode is a must-listen.
🎧 Tune in to Get Rich with Glen James to learn how to simplify your budgeting, avoid common mistakes, and set yourself up for long-term financial success.
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