How To Stick To A Budget
Have trouble sticking to a budget?
There are many reasons why we don’t always manage to hit the targets we set ourselves, often despite our best intentions. You may set out to stick to a budget and find yourself challenged by decisions you don’t remember making, or lapses you regret after the fact.
The principal culprits are often bad habits and losing sight of our objectives. We need some tricks and tactics to keep our eye on the prize.
Of course you should ensure that when you set out on a project like this, you are clear about the goals, and why you want to achieve them. If you are not committed up-front, then you’ll have forgotten all about it when then next project idea comes along. There isn’t room in our minds for several large personal projects all at once.
But if you’ve made that decision and you’re afraid you’ll miss your targets, or you’ve experienced difficulty getting this kind of project off the ground in the past, here are five things you should consider.
Keep It Top Of Mind
Our spending habits didn’t happen overnight, and if they’re getting in the way of your sticking to your budget, it’s more than a simple matter of willpower. It’s a question of attention.
For the first few weeks, perhaps even the first couple of months, when you’re trying to stick to your budget, you have to keep it top-of-mind. That means that you think about your budget before you make any decision to spend any money, every time you spend any money.
To avoid reflex or habit-driven spending decisions, you should create barriers to spending that will remind you at that moment to consider your spending intentions before you buy anything. You can do this by:
- Removing all contactless payment functionality from cards and telephones
- Putting your wallet in an unusual place
- Deleting remembered payment details from your browser and frequently-used websites
- Logging out of websites so you have to log back in to buy things
Anything that interrupts a purchase helps to draw your attention to the purchasing decision.
The budget and your spending targets need to be the first thing you think of when you spend money for the next few weeks. Over time, this new habit will replace the old one, and thinking about whether you should be buying something will replace the automatic decision to buy things.
Keep the Budget Realistic
When we first start measuring and taking control of our finances, a common mistake is to try to control everything all at once. To start at the endpoint and assume we can, get there in a single step.
Cutting your expenses by 30% is only possible if there are one or two things you can do that will add up to a 30% saving. If you need to do a hundred little things over the coming month to get there, you’ll have set yourself too ambitious a goal.
Give yourself some time. If you set yourself a target of 10% savings each month for 3 months, you can spread the effort over 90 days and benefit from the encouragement that comes from hitting your targets 3 months in a row, rather than the disappointment of not hitting your target the very first month you tried.
Look at last month’s spending. If you’re cutting it by more than 5% or 10% in any one category, you need to know exactly where that saving’s going to come from, rather than assume that by writing down the number, your decisions will magically allow you to hit the target. It always looks easy when you write it down, and harder when you look back on it.
Make it a Challenge
We like challenges, we rise to them and succeeding at them comes with a sense of accomplishment that we enjoy.
Create dashboards, charts, sheetss that you fill out. Put them in your journal, on your computer desktop or on your fridge. Think about how you’ve progressed towards your goal, what’s left to do and how you’re going to get there every day when you fill out your progress.
Acknowledge that it’s difficult, and take pride in achieving the targets you’ve set, because if it were easy, you’d have done it already.
A life of austerity and privation is no life at all.
After reaching a major target, reward yourself. Preferably with money set aside for exactly that purpose while you were reaching that target.
That reward can be anything. A new jacket, a trip to the beach, a dinner with your significant other. It doesn’t matter, except that you know that you’re rewarding yourself for something you’ve achieved.
Efforts need to be rewarded, our brains need the positive reinforcement to be able to make the effort again. If all you have is a different number on a bank statement, it won’t have the tangible, emotional value that a deliberate indulgence does. Pick something important to you and reward yourself with it.
One Thing At A Time
You mustn’t try to tackle everything at once. There are long lists out there (and on this website) of things you can do to improve your finances by reducing your costs, but if you try to meal plan, renegotiate your utilities, refinance your car, stop drinking coffee and start cycling to work all at once, it’s only going to work for a few days before some of these projects get dropped.
Let each achievement give you the motivation to tackle the next one. Make a list, but keep it sequential. You’ll get there in the end, and you’ll get more benefit from each project if you give each your full attention.
When you first start out, decide which of the projects will have the most impact, and which are the easiest to achieve. Pick a compromise between the two and start with that. Don’t start with something very hard, and don’t start with something that makes no real difference. You need easy wins to demonstrate to yourself that this effort pays off, then you can build up confidence and momentum to tackle the more challenging aspects of your financial adjustment later on.
It’s all common sense, really. Unfortunately, when we’re faced with new projects, common sense sometimes abandons us. That’s why people like me write out articles like this in the hopes that they help you tackle major projects like an adjustment of your finances with a realistic approach.
A lot of the advice on blogs seems to say, “This is really easy, all you have to do is plan your meals…“, or even, “I saved $873 per month by recycling bottle caps, and so can you.” Even when the advice is good (and that latter advice is both bad and I made it up), it carefully omits how difficult it is in a bid to be more clickbait-y and approachable.
So I’ll say here what tends to go in the small print elsewhere: This is hard, it involves going against years of learned behavior and forgoing lots of small pleasures you take so much for granted you’ll only really notice them once they’re gone.
It is, however, doable. By you. Take it one step at a time. When you feel like giving up, remember why you started. Reward yourself along the way. Pick good advice (because it makes sense to you) and apply it carefully, as though it were new. Over time, you’ll notice a not-so-gradual trajectory change in your finances.
And remember, every journey begins with a single step, so pick your first step and start your journey to financial freedom today.