How to win at budgeting, from 13.9 million Redditors who are crushing it 

"The truth is it makes me feel in control of every expense I've made." 

The back of a man with his arms high up, who is crushing it when it when it comes to budgeting

Most of us spend money like we’re in a trance state induced by mind-controlling zombie fungus. When you feel the impulse to buy coming on, your rational mind is a pawn. The fungus is at the helm, and it still knows how to use your debit card.

Brad Klontz, Ph.D., is a professor of financial psychology at Creighton University Heider College of Business and the founder of the Financial Psychology Institute, and he knows better than anyone that impulse buying isn’t the exception, but rather the norm. He tells Inverse that it’s fairly common to feel out of control of your spending.

“Many of us are spending quite unconsciously,” Klontz says. “People are totally unconscious about it, and some people are appalled at their actual behavior. They realize, ‘This doesn’t fit with my values and my goals.’”

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Fortunately, there’s a way to to manage daily spending and channel your money into the things you really want. But it is going to take a little bit of work, and that starts with tracking your spending every day. This month, that’s exactly what 13.9 million redditors have set out to do on the /r/personalfinance subreddit.

"The truth is it makes me feel in control of every expense I’ve made."

In September, the moderators of that subreddit kicked off a “track your spending challenge,” which is full of helpful insights, tricks to managing spending, and encouraging anecdotes from the front lines of savings bootcamp.

How to do the Reddit 30-day spending challenge

The rules of the challenge are simple. Track your spending for 30 days, and log all of it into a complete budget that’s broken down by category.

At the end of the 30 days, add one new category to the existing ones you’ve created — and in the process, you’ve discovered a whole new place where you’re directing your money. Also, if you have a tool that you’ve used to do this, share it with everyone on the subreddit.

Still, it can feel hard to get started, but one redditor who is absolutely crushing the game agreed to share their method for tracking spending successfully.

How to track your spending, from someone who is crushing it

Blake Binkley is a management consultant at Deloitte and a UC Berkeley graduate. After his family was hit hard by the 2008 recession, he explains that he became “anal retentive about saving.” He moved out of his parents’ house right after high school, where he immediately had to grapple with high Bay Area prices and little money to spare.

“My life was defined by delayed gratification, and my college experience started off pretty austere until I became more comfortable with the concept of disposable income,” Binkley says.

"The only challenge I’ve really had is recording all of the transactions after a night out at bars.

On the /r/personalfinance subreddit, lots of people recommend online budget trackers like mint (free) or YNAB (about $7 per month). But Binkley’s system is a bit more analog: All it requires is Google Sheets and the notes app on your phone.

Every time he buys something, he adds it to a “cost bucket” that’s basically a list on his notes app. So if he goes out for dinner, as soon as the check comes, he adds the total to the “ent” line on the note. Like this:

A snapshot of Binkley's personal budget-tracking strategy.

Blake Binkley

“I realize it’s a little luddite,” he explains. “The truth is it makes me feel in control of every expense I’ve made. Once it becomes a habit, it’s pretty easy to stay consistent. I’ve kept it up every day for two years, including during vacations. The only challenge I’ve really had is recording all of the transactions after a night out at bars.”

Keeping track of bar tabs aside, at the end of the month he compiles it all into a Google Sheet, then subtracts that from his net income. Net income means minus taxes and things like 401(k) contributions — basically any money you make but can’t spend. Then he adjust spending by category, cutting back in categories where he spent too much.

"I applaud them for doing it."

He calls it “luddite,” but there is a certain appeal of forcing your brain to literally wade through the annals of your spending. On /r/personalfinance, several commenters also like the manual approach, because it forces you to deal head-on with spending. That’s not to say that automation is always bad. In fact, when it comes to saving, money automation is powerful, for reasons we’ll talk about a bit further down.

Don't think of your savings as budgeting, think of it as an investment in something that you really care about -- maybe a vacation, or a college education, or an early retirement. 


One thing to watch out for is that tracking spending can feel depressing at the start. That’s normal, says Klontz. “It’s actually an emotionally difficult thing for most people to do.

I applaud them for doing it,” he says.

But being in control of your spending can be freeing, too, at least for Binkley:

“I actually feel less guilty taking random surfing trips, random ski trips, expensive dates, etc., because I know exactly what I can and can’t afford with my given budget,” he says.

Using your new knowledge 30 days later

You’ve tracked your spending, identified a new category of spending, and are generally apprised of what’s going on. Now it’s time to use that information and create a plan that helps you redirect spending towards what you really care about.

To do that, Klontz says that it’s worth sitting down and deciding what matters most to you. Maybe that’s a retirement fund, a college education, a new apartment, or a Trek Madone SLR.

Klontz reccomends making visual reminders of your savings goals. It's easy to remember why you're working towards them in the first place. 


Then, he advises you do two things:

1. Get hype about it. This sounds hokey, but there are very good reasons to do this.

“The first part is getting a real clear picture about what it is, getting excited about it, fleshing it out. Talk about it, picture it. How would it feel? What would it look like? Dive into that experience,” says Klontz. “Now you’re emotionally charged; you’re willing to do whatever it takes to get this thing that you want.”

The idea is to create a visual reminder that can make you feel excited about a savings goal. If that’s a vacation, maybe that means changing your desktop image. Maybe that’s a letter you write to your retired self thanking yourself for actually putting away money for later. In his YouTube video, he makes a mood board — if that’s more your thing.

Klontz describes this as “activating your emotional brain.” You can then leverage that hype into motivation to take action.

2. Are you hyped? If you are, start automating your savings right after you finish reading this article.

If you are sufficiently excited, direct some of each paycheck to a savings account automatically (or a sub-account within a savings account, if your bank allows it). This can feel a bit tedious, and that’s a good thing. You got hyped about your goal for a reason: to carry you through what Klontz calls the status quo bias.

"It takes a lot of emotional involvement and activation to make a big change."

The status quo bias is a term from behavioral economics and cognitive science that basically means we have a natural tendency to keep things the way they are. Sometimes that’s also called the “default effect” — suggesting that we’re far more likely to keep things (like direct deposit settings) as they are because changing them feels emotionally taxing.

“It takes a lot of emotional involvement and activation to make a big change,” says Klontz. “You would have to say, I now am going to stop saving for my European vacation. That’s a hard thing to go do.”

Odds are, you’re not going to change those settings back for the same reasons it was hard to start saving in the first place — it’s a total pain.

Ultimately, this whole process starts with getting the tracking right. Whether you go for online apps or a simple method like Binkley’s, it’s worth looking your spending in the face.

With the right strategy, it’s not so scary — especially if you know exactly what to do once you’ve stared it down.

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