Several years ago, Tori Dunlap set out to save $100,000 by the time she turned 25.
She hit the $100,000 mark just three months after her 25th birthday, and hasn't slowed down since. The now 29-year-old has gone on to build a multi-million dollar business, Her First 100K, write a New York Times bestseller, "Financial Feminist," and host a top-rated podcast of the same name.
Throughout her come-up, though, Dunlap says some of the things she chose to spend money on were fairly consistent — even if she could have saved more by cutting back.
"Three areas that I never scrimped on, even [from] trying to save 100K at 25 to becoming a multi-millionaire at 27, were travel, food out — I'm a huge foodie — and keeping a house [full of] plants," Dunlap tells CNBC Make It. "That's where the majority of my money goes. Everything else, I don't care about as much."
Though she certainly has more room to splurge now that she's well beyond her initial $100,000 savings goal, she encourages everyone to have a similar mindset of allowing yourself to spend on the things you love the most, as long as you keep your other expenses in check.
"That doesn't mean I'm not buying the occasional coffee or not going to TJ Maxx and buying something, but it means I'm more strategic," Dunlap says. "It means that my spending is reflecting my values and my hard-earned money is going to the things that I actually love."
She's not alone in this using this strategy. Fellow self-made millionaire and bestselling author Ramit Sethi calls it the "money dial" approach. It allows him to "spend extravagantly on the things I love, but cut way back mercilessly on the things I don't," he told CNBC Make It last year.
Financial therapists tend to agree, too: Trying to meet a financial goal by forcing yourself stop spending on things you love probably isn't going to work out in the long-run. A strict budget could even hurt your progress if it makes you feel too constrained or ashamed of overspending, according to financial and psychological experts alike.
"Diets don't work because the more you tell me I can't have fried chicken, the more I want fried chicken — that's not a willpower thing, that's just psychology," Dunlap says, comparing a budget that restricts spending with a diet that cuts out specific foods.
"If I tell you, 'never spend money, never step foot in a restaurant,' that doesn't work, that's not sustainable, and frankly, it's not fun," she says.
Rather than setting a strict budget for yourself, many experts recommend a more flexible spending plan that's less focused on tracking every single dollar and more about allocating your funds to the things that are most important to you.
"You have to find the balance between spending unabashedly on the things that you absolutely love and the things that reflect your values, and not spending so much on the other stuff, because it's stuff that you don't really care about," Dunlap says.
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