What is budgeting? Is it just saving? The verb implies saving is an action that you do. Think for a second, imagine a person currently in the act of saving.

What is he or she doing? 


If I told you to picture someone running, it would be easy. We know what it looks like. It’s a physical activity. 

If you decided you were going to go run, you could do it. But if you try to go save? It sounds pretty similar to doing nothing, just over a longer period of time.

Budgeting and saving are better visualized by the absence of spending. Saving is really the non-action of spending. Any time you are not spending, you’re saving.

Maybe the slight wordsmithing doesn’t really matter. Yet, maybe. Just maybe. It changes everything.

(Dramatic soundtrack kicks in)




(End of Dramatic Soundtrack) 

This is important. If the riveting dramatic music didn’t give that away. It determines how we think about saving. 

We see budgeting as an additional thing we do. We take all the things that normally consume our day-to-day lives – work, being social, watching tv, whatever you do in your private lives – then we add budgeting to it. It becomes a project.

That’s the wrong approach. Budgeting is not something we can add to our lives. It’s the act of taking things away from our life. It’s not doing more, it’s doing less. Going back to the essentials and brushing off our baggage. 

If you want to effectively budget, and in turn have something to invest, address your habits, not a spreadsheet.

Bad habits are expensive. In money, in time, or both. Getting rid of your expensive habits is like finding a bunch of free time and money. Therefore you can reinvest it into something meaningful.  

So how do you successfully change your habits in a way that maximizes your investing potential and ultimately makes you a richer, more virtuous person?

When it comes to the science and psychology of habit there are plenty of people who have much more context, effective advice, and collegiate credibility than I do, but I will lift the curtain on what I’ve done to solve the saving puzzle for myself (admittedly with many relapses along the way).

Pick The Right Habit to Break

If you’re like me, and relatively speaking you are, you’re not suffering from just one bad habit. 

I live in California, where weed is legal. I’ve always been a supporter in spirit, and for most of my young adult life, in practice as well. I’ve also had periods where I drink 4 to 5 nights a week. 

During some phases, I spend the American average of 6 hours a day watching TV (sometimes it’s in the background of what I’m doing, sometimes it’s in the foreground. Either way, it does a good job of keeping me distracted and procrastinating.) 

Social media was one for a while too, but I kicked that one a little while back. I’m also back and forth between eating out a lot (or better said, picking up food) and cooking most of my meals.

Smell my dirty laundry?

Take a second to consider your own bad habits.

Each of these habits has a price. The price (or gain) is usually a mixture of 3 things: money, time, and energy.

TV, for example, is very cheap. If all you watch is Netflix then it costs $14 a month. Not saving much money by getting rid of that. But it has a massive time and energy cost. It’s time-consuming for obvious reasons but it also wipes you of your attention span, making it harder to focus on important things.

Drugs like alcohol and weed (and coffee… kinda) cost a lot of money, time, and energy. They are generally high cost all around. 

Food is not so clear-cut. Take some time to analyze your eating habits. 

Picking up food can save you cooking time unless you eat at restaurants which costs more time. And it’s harder to eat healthy if you’re eating out all of the time and that costs energy. But you can eat horribly at home too.

Go through your habits and figure out the cost of each one.

Get rid of the most expensive one first.

Your habits usually have a trigger. Something in your environment that tells your brain to indulge in a habit because it’s recognizing a pattern. For example, wake up = coffee. 

A lot of times one bad habit can be a trigger for another. When I smoke weed I’m almost guaranteed to spend hours watching TV and procrastinate. If I drink with my imaginary friends (I would never drink alone) the same thing happens.

If you can identify a habit that is the trigger for other bad habits you might be better off tackling that one first, even if it’s not the most expensive one. Deciding to eat healthily will probably automatically cause you to spend less money going out to get food and may make you less lethargic after you eat, meaning you won’t plop on the couch and turn on the TV (talking to myself here).

Don’t Break Tha Chain

Do you know how many days it’s been since you started drinking? Probably not. I don’t think anybody cares to count that. But most people who are active in Alcoholics Anonymous know the day they sobered up, and how many days it’s been since. 

They know because they’re counting. 

It works both ways. Building new habits and getting rid of old ones. It’s easy to convince yourself to break a 3-day streak of not eating out. But a 163-day streak? Do you really want to go back to zero? 

Maybe that’s what ex-addicts mean when they say they ‘take it one day at a time.’ 

They are literally marking the days they are successful in abstaining. 

Apps like Acorns and Wealthfront allow you to set up automated recurring investments. So instead of making a habit of investing, I recommend just setting up automation and being done with it.

Have it set up to pull money out of your checking a couple of days after you normally get your paycheck so you’re investing first and not last. With what’s left.

If you don’t make the same amount of money every month like me (freelance, salesperson, writer, business owner, all of the above), set up a smaller daily investment that is obviously reachable for you. 

That pretty much sums up creating an investing habit. Just automate it. Easy and done. 

Ridding yourself of spending habits is more worthy of your active attention.

To practice the not breaking the chain strategy, I’ve seen a few different formats. I’ve gone back and forth for my personal methods of applying this practically. 

The first, and most obvious method, is to buy a physical calendar and mark an “X” on each day you accomplish your goal of not engaging in your bad habit. Or maybe instead of an “X” the number of days it is since your last ‘accident.’

Another method from Ryan Holiday’s Habits for Success, Habits for Happiness course is a sheet with 66 boxes on it – basically a calendar without dates. Just like the calendar, you put an “X” on each day you succeed, and when you fail, print a new one and start over again. 66 because research shows that it takes that many days for a habit to stick.

Another method I’m experimenting with came from Adam Grant on Tim Ferriss’s podcast.

It’s meant for building a habit but can easily be reversed for getting rid of one. He creates a spreadsheet with dates descending on the very left column. Then next to the date he puts a -1,0, or 1. A -1 means bad job. A 0 means ‘ehhh…’ A 1 means you f*ing crushed it. 

At the end of the year, he has the sum of his effort and can see with simple accuracy how well he stuck to his habit that year. 365 is a perfect score.

When you’re just starting out with this practice I recommend picking whichever method feels the simplest to you. If you’re struggling to make a habit of tracking your habits, you need to find a simpler method of doing so. Adding more tech, like a spreadsheet, isn’t the best option for everybody.

Break One Habit at a Time

Trying to break or add a laundry list of habits is destined to fail. It’s too overwhelming and when you lose your discipline for a moment in one area, it collapses everywhere. Shooting your mood down into the depths of self-deprecation.

The most effective way to change your habits, and your life, is to measure your performance against one habit at a time.

Unfortunately, this makes the process a bit slower than people want to hear. We would love to believe that we can make a decision right now and that will be the start of a new world where we constantly have money left over each month because of our now amazing spending habits. 

This is why it’s important to pick the right habit to break. Really take the time to think about which habit will have the biggest impact. Is it the one that reduces spending the most? Or is it the one that enables some of your other habits? 

Personally, I went with the one that makes it easier to get rid of other habits. But that’s a decision for you to make for yourself. 

Surprisingly, some habits can be broken with one decision and one action. These habits rely on something in your environment for their survival. If you’re trying to break your habit of watching hours of TV for example, just sell your TV and cancel your subscriptions. It’s abrupt and painful, but effective. 

The struggle usually comes from enablers. Most of the time a bad habit is created through social activities. You start a drinking habit with friends, then it sticks to you. You may have to “be busy” when your enabling friends call. 

In a lot of cases, you won’t be able to manipulate your environment on a whim to get rid of your bad habits. Maybe it’s your roommates that watch 6 hours of TV, eat out all of the time, smoke weed every evening, whatever. Those are the cases where it’s best to focus on one habit at a time. 

Otherwise, with the added social pressure of your environment, you’ll end up back at every bad habit you wanted to get rid of in the first place.

Final Thoughts

We all want better lives for ourselves. A lot of the time (most of the time), that means making changes in the finance department. 

Nothing will change your life like changing your spending habits because your spending habits are what make up your life in general. How you spend is how you live, they can’t really be separated. 

The natural inclination is to focus on the idea that to improve our lives we need to make more money. But is that true? Ask yourself, if you were making 30% more money today, would that actually create a significant change to your life? Or would your spending habits eat that right up?

If you think the life you’re looking for can come through getting more of the things you want, do an experiment. 

See if you can actually get the life you’re looking for by doing less of the things you don’t need, instead of focusing on what you want to add to your life. See what you can get rid of. 

I think you’ll be, as I was, pleasantly surprised that you can do most of the things you want with your life by being determined to spend less money, time, and energy on things that aren’t serving you. It’s true freedom. The freedom to choose for yourself instead of being a victim to your patterns.