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Want to save more and spend less money? Try the financial buddy system

If you lack the willpower to budget and save, a 'money buddy' may be the key to a better financial future.
Image: A woman carrying a shopping bag drinks coffee while looking at her mobile phone
Your 'money buddy' may send you a text when you’ve reached a financial goal, or remind you not to overspend when you're out shopping on a Saturday afternoon. Eva-Katalin / Getty Images

I’m terrible with money. While I’ve improved significantly this past year, there’s still a lot of room for growth. And the sole reason for my bad money behavior is simple: I lack significant willpower. I’m the type of person who will sit down and create a fancy, detailed budget that clearly details my cash flow and what I should be spending on certain items, only to completely ignore the outline I’ve set for myself three days into the month, because, well, I don’t have the discipline required to follow through with my financial plans. Consequently, it’s led to multiple overdrafts (and subsequent fees) through the years.

Thankfully, my financial life has taken a turn for the better in the past six months thanks to a significant bump in income, and there have been no overdrafts of my checking account. In an effort not to ruin the amazing streak I have going on, I’ve made a promise to myself that I will do everything in my power to build a hefty emergency fund and save money for a multi-city European trip I want to take next summer.

So what’s helping me keep my word? Enter my money buddy: a close and trusted friend who is making sure I’m actually following my budget, setting aside a certain amount of money every month and cooking more (like I always say I will) — and I do the same for her. The strategy I’m using to get my life in order is called the “financial buddy system,” a tried-and-true method that’s similar to having a workout partner to help you conquer your health and fitness goals.

“Sharing your money goals with others makes them more real and harder to ignore,” explains Danielle Margulis, a certified financial planner at Meyer Capital Group in New Jersey. Just like a gym buddy will make sure you don’t skip a workout when you just don’t feel like leaving your bed in the morning, a money buddy will motivate you and make sure you to stay on track while you work towards hitting certain a financial benchmark, like bulking up an emergency fund.

The financial buddy system has the science to back it up, too. In a 2014 study from the Dominican University of California, psychology professor Dr. Gail Matthews found that participants who sent weekly updates to a friend on their progress were far more likely to achieve their goals.

Even if already have a built-in money buddy (e.g. a long-term partner) who already knows everything about your shared personal finances, it can still be beneficial to have another person you can reach out to when you’re tempted to make an unwise purchase or need guidance on how to better save money. Here are a few tips to make the financial buddy system work for you:

Choose A Financial Buddy Wisely

When it comes time to choose a money buddy, you want a person who can handle money matters with a high level of understanding. Also, if a friend has the same financial issue as you, they might be a great person to commiserate with — but they won’t have the know-how to teach you how to get out of it.

“You don’t want anybody that’s struggling with the same thing you are, so if you have a problem with overshopping or credit card debt, you really don’t want somebody else who is in the midst of that struggle,” says Jeff Rose, certified financial planner and author of "Soldier of Finance: Take Charge of Your Money and Invest In Your Future." On top of that, you want someone who will be honest with you. “You want someone who’s going to speak truth to you,” adds Rose.

Have Honest Money Conversations

After all, we live in a society where people routinely skirt around speaking about money openly. Money may still be a taboo topic, but it shouldn’t be — especially amongst close friends you probably already confide in for other sensitive topics.

It’s important to have those candid conversations with your money buddy about your net worth, your debt, where you hope to be in a couple months or years’ time, what your spending habits are like and what you hope to change and why. These probing questions will lead to illuminating and insightful discussions, and they will make you more comfortable with being honest and upfront about what you can and can’t afford. So, when they invite you to a social gathering and you simply can’t pay for it, no worries — if they know what’s going on in your life, they’ll understand. Additionally, these conversations will allow you to teach one another what the respective person’s financial triggers are so you help each other steer clear of them whenever they arise, or remind them why a certain purchase would be a financially unwise decision.

Be Accountable For One Another

How you and your friend hold each other accountable will all depend on your comfort levels and the type of relationship you two have. “The person can follow up and ask how you are doing and whether you are getting closer to achieving your goal,” says Margulis.

Another method may be to send texts to one another when you’ve made significant progress, or remind one another when it’s time to deposit money into a savings account. It’s really up to the both of you to decide what works best for your situation; just make sure it is something both of you have enough have time for and feel okay doing. For example, if the thought of tracking someone else’s cash flow gives you anxiety, you shouldn’t share your bank information with one another.

Ultimately, a money buddy serves as a great source of motivation when you’re feeling discouraged or demotivated to work toward your financial goals. They’re your own personal cheerleader, rooting you on when the going gets tough. If you’re struggling with personal finances and need an extra push, it’s worth reaching out to someone you trust to help you change your relationship with money for the better. The world of personal finance can be a minefield, so why not have a support system helping you along the way?


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