If you’ve followed my writing, I’m sure you’ve noticed several articles on budgeting. Why so many? Because a budget is one of the most valuable tools for understanding, managing, and growing your money. Yet it seems to me that many people break-out in a cold sweat the moment I say “budget”.
If the B-word induces anxiety in you to the point you can’t bring yourself to write one, try changing your terminology. A budget is just a plan for how you are going to spend your money, so try calling it a “Spending Plan”. Using a Spending Plan is a small lifestyle adjustment to help you reshape your spending habits. It takes time and practice to write and use Spending Plans that are reasonable and accurate, but as you develop the habit, you build your confidence and capability.
When you begin drafting your Spending Plan, set reasonable expectations for yourself. Don’t try to totally rework all your spending habits, because when you over-commit to big changes, it is very easy to lose motivation and just give up.
Ask yourself, what small changes can you make to your spending habits?
If you frequently buy lunches or snacks at work, reduce that to 1-2 days a week, and bring a lunch (left-overs, soup, or frozen meals) the rest of the days. You’ll save money by not buying the easily accessible (but up-charged) food from your work kiosk, and it is a small change that is easy to maintain.
If you frequently buy a product only to throw it out un- or half-used, just stop buying it. I had to do this with yogurt.
Perhaps your spending habits are poor because you enjoy buying gifts for people. Ideally, you should just stop, but if you need a stepping stone for that goal, set limits for yourself. Limit who you buy for to one or two people, and put limits, say a minimum of a 50% decrease, on per-person spending.
Many people have poor spending habits they struggle with. I love shopping in craft stores, but I rarely use the supplies I have and let’s not even talk about my ridiculous surplus of yarn. When I realized this was an issue, I had to completely stop visiting craft stores for a few months. Now, I can go in only if I have a very specific list for a project I know I’ll finish, and I often bring a friend to help my stick to my list.
It is important to remember that using a Spending Plan to reshape your habits is a process. It’s okay if there are multiple aspects of your current spending habits you want to change. In fact, that’s quite normal. Start with one small habit you want to adjust. After about 4-6 weeks the habit will be established and you can start working on another.
As you successfully make small alterations to your spending and become familiar with writing and using a Spending Plan, your confidence and motivation to make bigger changes will grow. Even if you hate the B-word, it is still one of the most effective tools for managing your money and building long-lasting changes to your financial life. So plan small tweaks to your spending and give yourself the opportunity to see small changes become solid habits.
Written by Mckenzie Candalot, Staff Writer – Mckenzie Candalot graduated from the College of Idaho with a B.A. in English Literature. She has a passion for written language and helping other women take control of their finances. When not blogging or reading, she enjoys cooking and spending time with loved ones.