I don’t budget. I never have.
Maybe not never. Many years ago, I remember creating a budget. Then constantly moving amounts, adding & subtracting between all the buckets, to align with what I spent. At the end of the month, I would force my budget to balance.
Good job Kim!
I realized that I needed to know what I spent, not what I thought I was going to spend.
Figure this out and you can say goodbye to your budget too!
Focus on spending habits
When you know you’re tracking, you’ll hesitate more with each swipe.
In the past, to build my own habit, I put reminders in my wallet.
I once cut out and wrapped a picture of a washing machine around my credit card. Every time I went to use it I was reminded that I really needed to buy a washing machine.
Most of the time I didn’t purchase whatever was in my cart. But sometimes I did. Either way, I was making a choice.
Track everything
Account for every dollar you spend and what you spend it on.
I did this for years. I remember saying to a friend once, “I can tell you what I spent on groceries in April four years ago!” Today, I don’t recommend doing this forever. Track your spending for as long as it takes you to get a good idea of what you buy, where you buy it, and what you spend.
Keep a running note on your phone to track cash purchases.
Doing this provides a clear picture of spending habits.
Identify the problem areas
Now that we know where the money is going, we can identify the problem areas.
I used to buy magazines. Many many magazines. Do you remember those?
It was always in the grocery store. Once I realized how often and how much I spent on line-up entertainment, it was easy to leave them behind. I didn’t read them at home, they were already recycling material by the time I put the groceries away.
Magazines may not be your problem. Maybe its take out meals. Or home decor. We all spend differently, but you’ll notice something surprising.
And then once you see it, you can work towards changing it.
Set your priorities
Do your spending habits reflect your priorities?
If you’re not aligned with your vision, choose to align with each new purchase. Set your priorities and new spending habits consciously.
By the time you get to this step, you’ll know what you need in your account to cover fixed costs, the essentials, monthly. Knowing this amount allows you to plan ahead. And eventually bring your spending habits in line with your vision and your financial goals.
Today, there is an elastic band wrapped around my card. Just as a reminder that I have a vision and a plan. When I see the elastic, I ask myself “Is this purchase bringing me closer to my vision?”