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This Ingredient Can Turn Your Finances Around

Updated: Apr 21, 2022

And not it's not a budget


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in the world of personal finance, the focus has always been on ‘finance’ and not on ‘personal’. But, unfortunately, we aren’t robots — yet. We can’t always budget every dollar and we can’t always make our coffees at home.


I’ve found that adding a personal tinge to our financial lives can often mean the difference between long-term success and failure. Not just me, research says so too.

The concept of a ‘buddy’ or an ‘accountability partner’ is as old as it gets. It originally appeared in the fitness sector, when it was found that friends or partners who worked out together not only had stronger connections but also were able to achieve their fitness goals more consistently than those that worked out alone. The finding even led to the conception of the ‘personal trainer’, a person you literally paid to be your fitness buddy, apart from, of course, training you correctly.

But how can a buddy help in saving money — isn’t that a one-person job? Let me try and convince you otherwise.


1. It gives you an emotional solution to an emotional problem

No one takes a rational decision to have a screwed-up financial life. It is either a set of unfortunate circumstances or an unhealthy relationship between one’s emotions and money — most often a combination of the two.

Which is why purely rational solutions like checklists, to-dos, and charts often don’t work.

Identifying the emotional reactions that lead us to make poor decisions is the crucial part of breaking lifelong habits that lead us to such a pass in the first place.

This is where financial buddies can be invaluable. Just having someone who can identify your negative emotional states and replace ‘retail therapy’ with actual emotional support, can be the difference between theory and practice.


2. It provides external support and validation

Not all of us are 100% self-motivated. Most of us, at one time or another, require some cheering up. If you can be motivated purely by crossing out tasks, good for you. The rest of us need to brag sometimes about achieving small goals.

A money buddy can provide a much-needed pep talk when you’re not feeling it, or be in your corner for the small wins that you can’t share with the world. After all, for reasons ranging from ‘I’m afraid of jinxing it’ to ‘People will be jealous’, we don’t really update our social media for our financial successes. ‘I am debt-free’ or ‘I hit $100k in net worth’ aren’t usually Insta-worthy updates.

But with a money buddy — not only do you have someone who sees the wins, but also someone who’s seen how hard you’ve worked to get there. That is worth something.


3. It keeps you accountable

Do you know the people most likely to achieve goals? The consistent ones. Not the ones who have the most talent, who work hard, or who are passionate. Sure, those things help. But the person most likely to achieve the goal is the one who shows up every day, no matter what. Even if you failed yesterday — especially if you failed yesterday.

Accountability is the key that can help unlock your wildest financial dreams. If you don’t have someone to keep you on track, it is easy to give up when you have a slip-up and buy something you don’t need. It is easy to give up when you invest your hard-earned money in the market and it crashes. It is easy to give up when the money just doesn’t seem to grow, no matter how disciplined you’ve been.

But a small voice reminding you that it will be worth it and you just need to keep your head down and go for it is all you need when it is easy to give up.


4. It makes money fun

The best reason! Money is such a drab and serious topic, but it is something that comes with the territory of adulting. Having a friend on the same journey is the only thing that can possibly make it fun.

From daydreaming of your retired life on a beach sipping a pina colada, to setting up fun challenges for each other, the buddy system can make even a disciplined life a joyful experience.


Who should be your money buddy?

I will leave this decision up to you (obviously). All that is required from a money buddy is that they are trustworthy (you don’t want your financial life splashed on the Internet, or the hot topic of discussion in your circle), they are nice (and not be resentful of your successes or rejoice in your failures), and that they are somewhat on the same page regarding your financial goals (you don’t want to be the troublesome twins that take each other further down the financial abyss). It doesn’t have to be someone in the same stage of financial life as you — there will always be one partner who is more accomplished than the other.

Anyone who can tick these rather basic criteria is perfect.


But what if you don’t have anyone like this in your life?


Well, fear not. Random Internet strangers will come to your rescue then. My personal favorites are the folks over at Reddit (I recommend r/FIRE, r/personalfinance, and r/FIREyfemmes if you’re a femme).


What should you discuss with your money buddy?

Whether you have a weekly call or a monthly email, it is important that your discussions with your buddy are, at least on a very broad contour, structured. A freewheeling conversation, while performing wonders for the heart, are not very amenable to achieving goals.

However formal or informal you wish to keep your relationship with your bud, some points that must be discussed are listed here. These will help you both extract the maximum benefit from the relationship, without either party growing resentful. Keep in mind that both of you need to discuss these points.

  • Your current net worth. You can avoid details if you’re uncomfortable. But there are some details that are important to share for them to help you. How much do you have as an emergency fund? How much debt do you have? Any other savings? What about your retirement accounts?

  • Your current budget. How much do you earn each month and how much do you spend? If you do not want to tell them exactly what you earn or spend, you can tell them what the delta between your income and expenses is.

  • Your short-term, mid-term, and long-term financial goals. Short-term goals could be that you want to have a decent emergency fund put aside, or that you want to put aside some money for a family vacation. Mid-term goals would be something you wish to achieve in the next few years — a down-payment for a house, or a college education fund for your kids. Long-term goals are most likely your retirement plans.

  • The timeline for each goal, how much you need to set aside every month for such a timeline, how much you are currently able to contribute, and how you’re planning to bridge the gap (there is bound to be a gap!).

  • If you want to reduce your expenses, your plans and strategies for it.

  • If you want to increase your income, how you are planning to do it, and when. For these last two points, two minds are always better than one. Brainstorming can lead to some excellent breakthroughs. Here are some ideas – How to Generate Ideas for Your Personalised Side Hustle

Do you know who your perfect money buddy is? The person you were thinking of while reading this article. Go ahead and ask — if you don’t, the answer is a no anyway.



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