How to Establish Healthy Money Habits

One of the YNAB team members made an excellent point about the recurring cycle of exercise resolutions that so many of us find ourselves stuck in every January:

“I had to stop thinking about exercise as something I did and start treating it as part of my identity. Instead of saying ‘I exercise three times a week’, I would tell myself ‘I’m the type of person that never misses a workout’.”

His take aligns with my own experiences, and it exposes an important aspect of habit change—that we have to be able to find a version of ourselves that can accomplish the goals that we yearn to fulfill.

The thing is, changing ourselves can be scary, whether we’re conscious of it or not, so we often resist it. As Seth Godin said:

“Your audacious life goals are fabulous. We’re proud of you for having them. But it’s possible that those goals are designed to distract you from the thing that’s really frightening you—the shift in daily habits that would mean a re-invention of how you see yourself.”

Establish Healthy Money Habits

If, as one of your resolutions, you’ve decided to give budgeting a try, you probably have some big financial goals (and we are proud of you for that!). Maybe you’d like to get out of debt or save up to buy your first home or start establishing more healthy money habits. Wonderful! Don’t lose sight of what motivated you to start in the first place.

But, perhaps, it would be helpful—especially if you’re feeling at all overwhelmed—to focus on something small. To pick a habit to practice.

Choose Something That Feels Doable

Imagine how different your finances could look in a year if you were the kind of person who cooked more at home, instead of grabbing food on the go? Or if you planned to spend a little money on fun each month, rather than caving into your whims? What if your “impulse buys” became planned purchases instead? What if your spending habits aligned with your life’s priorities instead of the day’s mood?

Challenge yourself to pick a habit, something that feels doable, and commit! To get you started, I interviewed Team YNAB for some of their favorite financial habits—the ones that they feel make the biggest impact for the smallest input.

The YNAB Team's Healthy Money Habits

• “It helps to have your categories dialed in—you need them to be specific enough that you’re able to effectively evaluate your spending. For example, we added a fast-food category because we wanted to really track that and see if we could spend a little less on grabbing food in a pinch. We also wanted to be more intentional with our overall non-grocery food spending.” —Ryan, Digital Marketer
• “I like to have one overarching goal to motivate me. Right now, it’s paying off my mortgage.” —Ernie, Educator
• “Entering transactions manually and reconciling weekly keeps my eyes on my budget, which gives me constant awareness of how I’m progressing toward my goals. This also gives me the freedom to adjust, in the moment, when I’m not doing as well as I want to be.” —Jacob, Customer Support Manager
• “Allowing some wiggle room (which happens automatically with YNAB) … I let myself have fun money.” —Emily, Executive Assistant
• “As we work on getting out of debt, keeping an eye on how much we’ve paid off over time using the net worth and/or spending reports has been a huge motivator … having something tangible to look at as we progress helps to keep us on the path to debt freedom.” —Justin, Q.A. Owner
• “It’s really motivating to add a category just for a special thing you want to purchase, and then put a couple dollars here and there towards it (like the Wish Farm!)” —Michele, Support Specialist
• “I try to enter expenses, as they happen, to stay on top of things and split out those pesky Target/Amazon/Costco receipts so that I am prepared to accept the matching import as soon as it happens. Once I start falling behind, it’s so easy to keep putting it off.” —Amanda, Support Specialist
• “I always do a quick rundown of the budget with my spouse before the weekend or before we’re about to do something out of the norm. For example, when he goes up north for hunting, we’ll quickly go over how much we have in the transportation, dining out, and hunting categories. That way, he knows what’s available to spend on gas, food and any gear he might need, and I’m able to move money around if one of the categories is lacking. It helps us reduce our unnecessary spending because we’re conscious about it beforehand.” —Sarah S., Support Specialist
• “I set a target for most categories so there is an indicator if I try to move too much money to another category. It’s a reminder of the priorities I set when I was thinking more clearly.” —Kari, Customer Support Director
• “When there’s a red dot on my YNAB mobile app, I know there’s something I need to do in the budget, and I clear it up within the day.” —Jen, Support Specialist
• “I check my budget every morning over tea (associating it with another existing habit makes it easier). I also turned on text alerts from my bank, so I don’t even bother getting a receipt for most spending. I just sit in the car and enter the transaction right there.” —Kat, Support Specialist
• “Daily. Reconciliation. Period. If I go longer than four or five days before reconciling, I spend exponentially more time on my budget. Daily reconciling decreases my budgeting time so much, helping me focus on life!” —Dan, Support Specialist
• “Watching the net worth report keeps me on track. Sure, it goes up and down, but if it’s trending up, I know YNAB is working.” —Arturo, Marketing Developer
• “Setting goals helps remind me of our priorities. In a weak moment, looking at my goals is the reminder I need to stay on track.” —Shannon F., Support Specialist

Choose Your Healthy Money Habit

So, what will your first new habit be? If you’re still considering the possibilities, why not sign up for a free, online Q & A session for a how-to and pep talk? Bring your questions, our teachers are happy to help.

Ready to create a budget to help you track your spending, save money, and establish healthy money habits? Try a free trial of YNAB for 34 days. No credit card required!