Getting Started with Hierarchy Budget

The Basic Process

Hierarchy Budget helps you see what your spending actually serves. Not accounting categories. Human needs.

1. Set Up Your Categories

Before you can start budgeting, set up your expense and income categories at Settings > Categories.

For each expense category:

  1. Give it a name (e.g., “Groceries”, “Rent”, “Gym Membership”)
  2. Assign it to a Maslow level - the human need this expense primarily serves
  3. Optionally mark it as recurring (monthly) or one-time

For income categories:

  • Create categories like “Salary”, “Freelance”, “Dividends”
  • Income categories don’t need Maslow level assignment

Tips:

  • Start simple - you can always add more later
  • Think about what each expense is actually for, not just what it’s called
  • Categories are reusable across months

2. Create Your First Budget

Go to Monthly Budget:

  1. Enter your monthly income (after taxes)
  2. Set target percentages for each level - what you think reflects your current situation
  3. Select from your expense categories
  4. Enter planned amounts for each category

Don’t worry about “correct” percentages. This is about seeing reality, not conforming to an ideal.

3. Understand the Five Levels

As you build your budget, assign expenses based on what need they actually serve.

Key insight: Many expenses serve multiple needs. Split them honestly.

Physiological (Basic Survival)

Food, water, shelter, sleep, health. The body’s non-negotiables.

Examples: Groceries, rent/mortgage, utilities, basic internet, prescriptions

Safety (Security & Stability)

Protection from danger. The desire for a predictable, orderly world.

Examples: Insurance, emergency fund, debt payments, retirement savings, car maintenance

Split example: Basic car insurance -> safety. Premium coverage beyond legal requirements -> safety. Choosing a safer neighborhood -> safety.

Love & Belonging (Connection)

Social bonds, relationships, community. Feeling part of something larger.

Examples: Phone plan, social outings, gifts, family activities, pets, community groups

Split example: Premium groceries might be part health (physiological), part image and values signaling (love/belonging).

Esteem (Respect & Achievement)

Confidence, self-respect, achievement, recognition from others.

Examples: Professional clothes, gym, hobbies, courses, personal care, quality items that reflect identity

Split example: $600/month car payment - maybe $250 is reliable transportation (physiological/safety), $200 is professional image needed for work (esteem), $150 is about how it makes you feel (esteem). Split according to what you actually believe is necessary.

Self-Actualization (Becoming Your Full Potential)

Growth, creativity, expressing your unique capabilities.

Examples: Creative pursuits, meaningful travel, advanced education, mentorship, charitable giving, legacy projects

4. Set Your Hierarchy Percentages

Use the Percentage Controls in Monthly Budget to allocate income across levels. The hierarchy visualization updates in real-time.

There are no “correct” percentages. Your allocation should reflect:

  • Your actual income and circumstances
  • What needs are genuinely calling for resources right now
  • The gap between what you think you value and what your spending reveals

You’re Not at One Level - You’re Across All Five

This is critical: you’re never “at” the physiological level or “at” the esteem level. You’re always operating across all five simultaneously.

Maslow provided these rough estimates for an average person:

  • 85% satisfied in physiological needs
  • 70% satisfied in safety needs
  • 50% satisfied in love needs
  • 40% satisfied in self-esteem needs
  • 10% satisfied in self-actualization needs

The hierarchy doesn’t show where you “are” - it shows how your resources are distributed across these simultaneously active needs.

5. Track Reality vs. Plan

Enter actual spending amounts as the month progresses. The hierarchy reveals:

  • How much of each level’s budget you’re actually using
  • Which needs are calling louder than your intentions
  • The gap between plan and reality

This gap is information. Not failure. A window into what’s really motivating you.

For detailed forecast vs. actual comparison, use Cash Flow.

6. Observe

At month’s end, look at what the numbers show:

  • Where did my resources actually go?
  • Which needs got more attention than expected?
  • Which needs did I neglect, even though I said they mattered?
  • What does this reveal about what’s actually driving my behavior?

Don’t judge. Just observe.

Understanding the Hierarchy Visualization

The hierarchy shows fill percentage for each level - how much of that level’s target budget you’ve actually allocated.

What the Fill Means

  • Empty/Low Fill: You set a target percentage for this need, but didn’t allocate resources toward it.
  • Partial Fill: You’re meeting this need partially. The percentage shows how much.
  • Full/Overflow: You’re meeting or exceeding your target for this level.

Reading Your Hierarchy

Bottom-heavy: Most resources going to physiological and safety needs.

  • Your income situation may genuinely call for this
  • You may be recovering from instability
  • Or: anxiety about safety is consuming resources

Top-heavy: Significant allocation to esteem and self-actualization while lower needs are underfunded.

  • Basics may truly be met
  • Or: avoiding dealing with foundational instability

Balanced: Resources distributed across levels.

  • May indicate genuine stability
  • Or: spreading too thin, nothing getting full attention

The question isn’t whether any pattern is “good.” The question is: what does this reveal about what needs are calling for resources?

Annual and Periodic Planning

For larger, non-monthly expenses, use Periodic Budget:

  • Track periodic income (bonuses, tax refunds)
  • Plan periodic expenses (insurance premiums, vacations, gifts)
  • See how monthly budget combines with periodic items
  • Understand your full year’s financial picture

View the combined picture at Annual Budget.

Tips for Clarity

Be Honest

Enter what you’re actually spending, not what you wish you were spending. This is about seeing clearly.

Split Expenses That Serve Multiple Needs

“Coffee” could be physiological (caffeine), love (connecting with friends), or esteem (the cafe signals something about you). Where does it belong? Wherever it actually serves a need.

Your Hierarchy Will Shift

The needs calling for your resources now might be completely different next year. That’s not inconsistency. That’s life.

This Is a Mirror

This tool doesn’t tell you what you “should” spend. It shows you what you’re actually spending and reveals what needs are calling for those resources.

Common Questions

Q: What if an expense fits multiple categories?

A: Split it. That’s the power of this framework. A $600/month car payment isn’t just transportation - split it: $200 for reliable transportation (physiological/safety), $400 for status and image (esteem).

Q: I can’t save anything. Is this tool for me?

A: Yes. This tool can reveal what needs are consuming all your resources right now. That understanding might be more valuable than a savings rate.

Q: Should my hierarchy match some ideal percentages?

A: No ideal exists. Your allocation should match your actual situation, actual income, and actual needs calling for resources.

Q: How do I know what’s a “need” and what’s a “want”?

A: Maslow provides the framework. Physiological needs are non-negotiable. Safety needs keep you from chronic anxiety. Love needs are about real connection. Esteem needs are about genuine confidence. Self-actualization is about growth and becoming what you’re capable of.

Related Pages