Have you tried every budgeting app under the sun? Still can’t seem to figure out how much you have available to spend? Ready for a different approach? Willing to commit to a 14-day money challenge? Let’s do this.
Pick a Category
Maybe you love to shop for clothes. Or maybe it’s restaurants. Or evenings on the town with friends. What area of your finances do you want to focus on this month?
Decide an Amount
From this next paycheck, how much will you allow yourself on that category? $50? $100? The right answer depends on what your budget looks like. But be realistic. The goal isn’t necessarily to deprive yourself, but to help you be mindful of your spending.
Determine the Method
I strongly recommend cash. If you’ve never tried it, trust me. There’s something about having to remember that envelope of cash before you leave the house for dinner or shopping. Plus, seeing visually how much is still left in the stash. And, having to fork over the amount in bills to the cashier. It makes the spending real, and brings your consciousness to that moment.
If you are absolutely anti-cash and feel you wouldn’t be able to stick with it (even through the end of the month), you still need a way to set aside for that category. You could use a separate checking account. I also love accounts where you can subdivide the funds. OneFinance is the one I’m currently test driving, and is pleasantly user-friendly for “pockets” of funds.
Reap the Benefits
So often I get a call from my friend asking whether I can meet her for dinner out. Having to math about the balance in the checking account, when the light bill will come out, and when payday hits is more than I want to manage in my head. Check the envelope. Enough cash there? Good to go. Not enough? Hey, I can’t this week, but how about next Friday?
When I have clients who try this, I love their response. Without a planned amount, clients felt deprived when they told themselves “no.” But they felt terrible guilt when they told themselves “yes.” Talk about darned if you do and darned if you don’t. But with a plan, they can see that the “no” is merely “not yet.” And better yet, there’s NO GUILT associated with the spending since it’s already earmarked for that.
Can you do it? Now through the end of the month? Set aside for this pay period. Even if it doesn’t go 100% smoothly, you just got dialed in to your spending habits, learned some about yourself, and gained a new skill. I’d call that a step on the road to financial freedom.
If you need a little extra support with your budget and a plan that’ll help you develop better spending and savings habits, check out our Financial Health Plan.