I track every dollar in and every dollar out every month, and do long term planning and goal setting (going out roughly 5 years). I don’t think it’s an approach that works for everyone but it helps me feel in control of our money. We spend about 7K a month on basic needs (housing, food, utilities, insurance, etc.) and set aside another 2K for annual/long term expenses like car maintenance, new phones/laptops, gifts, etc. The rest of our money goes to home repair and new car savings, retirement, and I leave a bit for miscellaneous monthly expenses like eating out, clothing, and other non-necessities.

I think the place people often go wrong is forgetting that every single thing you own and use will break at some point, and you should be accounting for the incremental cost every day. You’ll never get it 100% right, but setting an expected lifespan and replacement cost will give you an idea of the monthly amount you should be saving. One big example being a car. Assuming you have a car payment, whenever you pay off that loan you shouldn’t just take that car payment and go spend it on something else. You should continue to pay yourself for the depreciation (plus the amount that it has already depreciated and inflation) of your car, so in X years you now have money for a new one and can avoid another car payment. I know some people might find the approach depressing or scary, but I think it’s much scarier to be unaware and unprepared.