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The #1 Thing I Did For My Finances

The #1 Thing I Did For My Finances

This 30-second habit changed my budget…

Last year, I made it a goal to start building a savings account, but month after month, I ended up spending my entire paycheck. So, looking for ways to save money, I started reading my bank and credit card statements.

Until that point, I had glanced at my account for only two reasons: it was payday or I needed to see how much disposable income I had left over after bills. Otherwise, I steered clear. If I avoided the not-so-good details, it wasn’t really happening, right?

Turns out, this habit is surprisingly common. According to a 2017 study, the National Bureau of Economic Research notes people pay more attention to their financial accounts when they anticipate seeing something positive. This practice is referred to as the “ostrich effect,” since investors often avoid negative information in the same way that ostriches put their heads in the sand.

Reader, I could no longer afford to be the ostrich.

So, I sat down and went through months of online statements. I looked closely at my purchases — item by item — to understand my day-to-day spending habits. Looking for places to cut costs, I noticed impulse buys and recurring digital charges. The small purchases I didn’t think twice about (Korean sheet masks bought online at 11 p.m., Lyft rides home from friends’ apartments) no longer felt so small when added together. I also realized I had enough streaming subscriptions only a media empire could justify, ringing in at a whopping SEVEN (Hulu, Netflix, Amazon Prime, HBO, Showtime, Starz, Spotify, Audible). Three of these I hadn’t used in months, and two I had intended to cancel after my free trial. I was spending over $100 a month to witness Keri Russell’s hair in The Americans.

All these purchases added up to more than double what I had accounted for when I set my monthly budgets. I was setting myself up to fail. Most surprising, though, was the annual amount I spent on things that I forgotten about or didn’t need. For example, cutting back on digital services alone could save me up to $1,000 dollars a year. Confronting my statements made me take full responsibility for my finances — both the highs and the lows.

These days, I check my account every morning, and it takes less than a minute. It was crucial to know where I stood before moving forward with more ambitious money goals. (And now when I buy a Korean sheet mask, I *appreciate* it.)

There are also apps to help manage your bank account. The New York Times recommends Trim to find recurring subscriptions; my friends rave about Mint for tracking bills and monitoring fees; and I’m excited to try Digit, which discreetly takes money from your checking account and puts it into savings AND sends daily texts about your bank account balance.

What about you? What’s the best thing you’ve done for your finances? Any tips for sticking to a budget? Any apps you recommend?

P.S. The $2 lunch I swear by, and do you talk to your friends about money?

(Photo of Mary Tyler Moore.)

  1. Carol says...

    I’m UK based, so these app recommendations won’t be of use to everyone, but I really like Chip – an app that learns about your income and spending habits than draws bits of money here and there to put into a savings account. It has added up nicely over the months without me even realising that money was gone. I also like Squirrel – it basically pays you a weekly allowance every week, after calculating how much you have left after covering all your bills. It ends that cycle of I’m rich-I’m poor that I used to go through from the beginning to the end of the month.

  2. Rose says...

    I have 20% of my paycheck (after 401k) auto invested into Vanguard mutual funds on the same day I get paid.

  3. Maggie says...

    I keep a spreadsheet on my phone using the Numbers app that comes standard on an iphone. It’s completely customized for me. I keep track of every CENT I have and every CENT I owe and every CENT in savings. I also keep a running list of things I want to buy. I try very hard to have the money saved up before I buy something. It really helps with making wise spending decisions. I check most of my accounts everyday. The days I get my interest payments are like Christmas morning! And I go in to my spreadsheet and update everything. I even get excited to pay bills because I like to have everything in order. It takes a certain kind of personality, I think.

  4. Marnie says...

    i paid off my mortgage quickly by rounding up my payments and making a weekly payment vs monthly. I also paid a lump payment at the end of the year when I could afford it. This saved a ton of interest which if you factor that in to the price of the house is huge. Once i no longer had a mortgage, I focused on my retirement and have an auto transfer to that account every month. Putting a smaller amount away monthly is easier to manage than one lump sum annually and also better because you cant know what the market is doing when you are ready to buy.

  5. I use Mint. It helps, but ultimately I get so frustrated because my housing costs (Brooklyn) are so high. That will never go away so I always feel the drive to focus more on making money.

    Other vices: Seamless and Uber. It’s hard to get me to use the subway on the weekend and I don’t really enjoy cooking.

  6. Alicia says...

    Best thing we ever did was two things 1) actually WRITE a budget out every month where we decide where each and every dollar is going to go(we use EveryDollar) and 2) USE CASH!!!! it made us re-set on the fly spending habits. We have put a few budget categories back on plastic (gas) but still keep groceries and eating out in cash! TOTALLY CHANGED OUR LIVES!

  7. Nora says...

    I totally get it! I used to really hate talking about money with my husband because we’d put off those conversations until we absolutely had to deal with something, which was usually not good news. Now we try to talk about it more often so it has become more of a benign, weekly conversation. Also, we use YNAB (you need a budget), and it’s helped us a lot with keeping on track and has given us lots of small goals to keep and celebrate (sticking to a monthly dining out budget, for instance) instead of just the big goals of spend less, save more.

    • YNAB has reduced the amount of stress and arguing about money in my marriage, even if I still haven’t figured out how to use it properly, lol.

  8. Yenly says...

    What a great post! Indeed we need more posts on personal finance like this, it just so empowering to talk about money so openly :), would love to see more comments/posts on investment tips as I already have seen a few already…books, podcasts, or any platform where we can learn more about our money and how to invest?

  9. Rachel says...

    I always pay myself first. The first thing I do on payday is put money into my savings account. I started this habit in my early 20s with $50 a check, and with each passing year, I increased the dollar amount. I don’t miss the money, and I have learned to live on whatever is left over. This habit has helped me save a nest fund and a vacation fund while contributing to my retirement savings.

    • Caroline says...

      I do this too. Although, my paycheck direct deposits into two accounts. I put a portion (usually 30-50%) into savings and never even see it, then the rest goes into my checking account. Then, any big splurges (mostly travel) or emergencies are never scary because my savings is so padded.

      My mom taught me this trick, and it’s enabled me and my husband to save about 30-40% of our income each year!

  10. I LOVE DIGIT. It is the absolute best. It only takes tiny amounts out at a time, so you don’t really notice. And the amount varies based on how much you have in your account. Because it’s not with my bank (which I check every day), I often forget I have the money stashed away. UNTIL I REMEMBER. Then I feel rich for one glorious second before realizing that I’m a total saver and have zero plans to spend it.

    In short: get digit. I’m not an ad bot. I just think it’s the most brainless way to save.

  11. A little late to this, but just wanted to chime in! My husband and I have been working on a happy medium for years. I’m a saver and he’s a spender, both due to our respective backgrounds. A tight, every dollar accounted for budget makes him feel claustrophobic and horrible about his salary, so we just don’t do it. Instead, I have set amounts that go into our savings account with each paycheck, we try to increase our savings/retirement contributions each time he gets a raise, and if we do somehow accrue debt we try to pay it off ASAP and not beat ourselves up for it.
    Last year involved uterine surgery for me and our third consecutive miscarriage… it was ROUGH, and we ran off to Italy for Thanksgiving, something we hadn’t exactly been saving up for. No regrets. My husband’s bonus last month all got slammed on that debt and it’s gone.
    One little thing that’s helped with our situation has been using Qapital in addition to our normal savings. It’s in a separate account, which is nice, and I can set up all sorts of little ways for us to save extra here and there, like rounding up each purchase to the nearest $1 or saving a little every week to a gift fund, so I never have to pause when getting birthday presents or worry about Christmas. I’ve included a link below because it’s nice for everyone to get a little bonus when signing up.

    I’m using Qapital, the free, easy way to save money! We’ll get $5 each for our first Goal if you sign up here:

    https://get.qapital.com/FkFGsMOhfM