The Best Budgeting Habits to Help You Save Money

By Jackie Lam
September 21, 2018

You may have grown up believing that netting a six-figure salary, winning the lottery, or getting a windfall of cash will be your ticket to wealth. But those beliefs may have done you wrong financially.

Want to hear a #truthbomb? The road to wealth is far less sexy and way more practical. Take it from a money nerd like me. My emergency fund certainly didn’t grow overnight. Ed McMahon didn’t come knocking on my door with an oversized check. I didn’t amass a gazillion views on my YouTube channel, catapulting me to viral video superstar status.

How did I grow my money sitch? I tweaked my mindset, behaviors, and habits gradually, and  over time, I managed to improve my relationship with money. From there, the money in my savings account grew.

Now your question may be: how do you do the same thing? Let’s start with the essentials, shall we? It all boils down to budgeting. Yes, that “b” word is ugly, especially when you feel like it will deprive you of having F-U-N. But here’s the thing: without a budget or money plan, you’ll be prone to spending your money willy-nilly. What’s worse, you may overspend.

To help you avoid pitfalls and improve your money habits, take a look at our budgeting tips.

Pick Your Approach

If you’re new to budgeting, there are a number of methods to keep things simple and stay on track:

50/30/20 Budget: This popular budgeting approach breaks up your budget into three major sections:

  • 50% goes toward needs (rent, bills, and insurance, and debt)
  • 30% goes toward wants (clothing, concert tickets, mini splurges, cool gadgets)
  • 20% goes toward your savings

Zero-Sum Budget: With the zero-sum budget, each dollar you get is assigned a task. So if there’s $50 left over in your budget, you’re not done yet. You need to figure out what to do with those “extra” buckaroos. Yes, even those bonuses from work, or a surprise cash gift from your Aunt Genie need to be allocated appropriately.

Anti-Budget: For those who want to essentially set it and forget it, the anti-budget is definitely worth considering. First, figure out how much you want to save. Then, squirrel away money for your savings goals, investments and paying off your debt. Whatever is left over can be spent on whatever you please. This is the mode for those who are lazy about budgeting.

Track Your Spending

Unless you have an uncanny ninja sense for where your money is going, you’ll want to monitor your cash outflow. This is the case with every single dollar. Why? Well, tracking your funds will help you figure out exactly what you’re spending your money on. In turn, you’ll be able to make adjustments. Pro tip: using a money management app will save you loads of time, plus help you save more cash.

For instance, when tracking my cashflow, I discovered that I am spending far too much on groceries. While I don’t normally have assigned amounts to each spending category, I resolved to do this.


There’s no better budget-saver than automation. Because your willpower acts like a muscle, every decision you make wears down your ability to make the best future choices. So the fewer choices you have to make about money, the better off you’ll be.

By autosaving, you’re looking out for the long-term without having to make extra effort. If you’re a Chime member, you can set up a payday rule to autosave a portion of your paycheck each month. And if you sign up for direct deposit, you can get paid early. This comes in particularly handy if you have side hustles and need to set aside part of your earnings for Uncle Sam.

Create a Buffer

If you get a bit spendy in a given month, don’t freak out. In fact, plan for it. That’s not to say you should be going on shopping blowouts and purchasing designer handbags and shoes each month. But allow for a bit of overspend by including a bit of padding. I like to keep a bit of a cushion in my savings account.

Set Alerts

Just like how retailers try to remove points of friction (aka barriers) to get you to spend more, adding in your own barriers will help you spend less. I receive a daily text notifying me of the balance in my main checking account. Plus, I get an email whenever I spend more than a designated amount in a single credit card transaction. This way I can keep tabs on my spending. If I find myself putting too much on one of my cards, I momentarily freeze it until I get back on track.

March to the Beat of Your Own Drum

There’s certainly no cut-and-dried approach to budgeting. While these habits will most likely help you live within your means, it’s a good idea to exercise creative license. Over the years I’ve tried a number of things, including tracking every transaction on a spreadsheet and creating a budget on a money management app. The key is to figure out what type of budgeting works for you and stick to it.

Ready to Make It Rain?

Just like you, your budget is a living, breathing thing, bound to constantly evolve. By checking in on it regularly, making adjustments along the way, and finding your own style, you’ll build wealthy habits that will help you grow your money and achieve your financial goals.

Jackie Lam is an L.A.-based financial writer whose clients include Fortune 500 companies and FinTech startups. Her work has appeared in Forbes, Business Insider, and GOOD.

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