Money Month

5 of the Easiest Budgeting Lessons AT Readers Have Ever Learned

published Oct 1, 2021
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Credit: Joe Lingeman

October is Money Month at Apartment Therapy! That means we’re sharing stories about saving money to buy a home, hacks to help you stick to your budget, and more all month. Head over here to see them all!

Budgeting is not one-size-fits-all — some people swear by allocating exact percentages of each paycheck to different tasks, while others play a little looser and still meet their money goals. It can take trial and error to figure out the savings routine that works for you, which is why talking about money (taboo, I know!) with friends and money experts can help you figure out what makes the most sense for your life and financial reality.

Curious to know what budget strategies and philosophies other people swear by, I asked friends about the best and easiest budgeting lessons they’ve ever learned. As expected, I received a wide variety of answers — after all, a solid money plan should be tailored to your individual needs and income.

Whether you have a handle on your cash or you need an in-depth crash course, it can be helpful to talk to a professional to identify your strengths and areas of growth. If you’re simply looking for a tune-up, comparing these hacks against your own current system might help you find ways to get even stronger with your budgeting and saving.

Set up a savings account in a separate spot from where you handle checking.

By far the most popular tip was to apply an out-of-sight, out-of-mind philosophy to your savings account, and opening it at a different institution than the one where you handle the bulk of your banking. It can help to set up automatic deposits that whisk your money away to that account before you even notice it’s missing; that way, your savings account is growing on its own, and you’re not tempted to spend it.

“I learned that hiding a bit of money in a place where I wouldn’t see it every day helped me to slowly feel like I could have a cushion in case anything bad happened, and also gave me room to save towards my other, less serious goals like traveling,” Folu, the creator of the Unsnackable newsletter, told Apartment Therapy. Just be sure to check the fine print — some banks will waive fees if you keep a given minimum balance in your account at all times, or if you deposit a certain amount of money into the account each month.

If you know when you’re getting paid, set up automatic bill payments in advance.

This tip doesn’t work for everyone, especially those with variable checks or freelancers whose clients may or may not pay them on time. But if you have a regular and fixed paycheck, enrolling in automatic bill pay can help you cross one more task off your to-do list.

“Bill payments and savings contributions are set several months in advance so nothing surprises me,” a reader named Jasmine told me. Thinking ahead helps her factor in savings goals several months in advance, because she already knows where that future money needs to go before she spends it on other things. “I can adjust as life happens, with plenty of time to adjust the budget accordingly,” she says.

Make sure your spending aligns with your values.

Yes, it’s important to set money goals and plan ahead, but do you take the time to check in with who you are here and now. According to a reader named Graciela, auditing how her spending aligns with or supports her personal values helps her identify key areas to make changes.

“I was looking at my spending two years ago and realized I was spending on clothes and things that weren’t super intentional and trying to make up for it by spending less on food and hanging out with friends,” she said. “It made me feel really guilty because my money wasn’t helping me in the ways I wanted to.”

By reprioritizing how she spends her money, she found that she also values those interactions with friends that much more. “It not only relieved guilt about spending money but also encouraged me to prioritize those things. […] It took away a lot of money anxiety and helps me make spending decisions so much more easily!”

Budget for fun the same way you budget for responsibilities.

Think of this like creating a savings account with a specific end goal in mind. According to a reader named Elora, making space in her budget for her to spend on things and experiences she enjoys is key to staying motivated.

“I have an auto-transfer each payday that moves money directly into a vacation savings account, and then when the time comes to plan a trip I already have a big chunk of money earmarked,” she said. “It’s a lot easier to keep up with how and where I allocate money for fun. Doing this had made it a lot easier to take a spontaneous trip or make a fun purchase without feeling anxious or taking on debt because I already have money set aside for these things.”

Treat your credit card like a debit card.

If you have a handle on your credit cards, it can be helpful to shift your mindset and only purchase what you can pay off immediately — not every purchase will fall into this category, but doing so can help you earn points and miles, or simply boost your credit score.

“I was always wary of credit cards after hearing horror stories of people who use and abuse them, so I didn’t even get my first credit card until I was 31,” a reader named Breanne said. After meeting with a financial advisor, she began following his suggestion to pay her credit card bill off every cycle.

“In terms of budgeting, I think it’s helped me because I don’t think of it like a credit card, I think of it like a debit card; if I don’t have the liquid money, I’m not going to pay for it,” she said. “I can only think of maybe a handful of times where I’ve ever bought something that took me longer than a month or two to pay off. I think it’s absolutely saved me money because at the end of the day, I want my money to go to the principle, not to interest or to the credit cards with late fees.”