Breaking Bad Budgeting Habits
Successful budgeting is a lot like successful dieting – both require self-control and discipline in the face of very tempting distractions. Who wants to diet when there are fresh brownies available? Who wants to save when retail therapy cures everything?
Fortunately, breaking bad budgeting habits can help you face financial temptations – and win. Are you guilty of any of these bad budgeting habits?
Not Using the Envelope Method
You set up your budget months ago, and you feel like you have everything covered. However, coasting on a budget created months or years ago means you may not be progressing as quickly as you could toward your savings goals. A way to get back on track and stop budgeting leaks is to use the envelope budget method. With this method, you assign a weekly or monthly budget amount for all of your spending categories, place cash in envelopes labeled with each category, and when your budget is spent, it’s spent.
Take a bit of time to really think about your spending – breakdown your budget into the various categories and work to keep spending within your limits. Don’t beat yourself up if a projection turns out to be off – just keep as close to your limits as possible with the goal of saving first in your mind.
Not Talking About the Budget
Breaking bad budgeting habits starts with an honest discussion. Have a family financial meeting once a week, or at least once per pay period. Congratulate yourselves on the savings goals you’ve made so far and the progress you are making toward future savings goals.
Look ahead at the month’s expenses and prepare yourselves by adjusting budget amounts as needed, saying no in some places so you can say yes where it really matters to you.
Children can benefit from this, too. Spend a few extra minutes to discuss with them how they plan to save and spend their allowance, recognizing their efforts and congratulating them on their growing savings. Take the time to discuss upcoming events where you are expected to pay, such as birthday parties and after school activities. If needed, help set your children’s expectations now, to help avoid disappointment later on.
If you are entirely independent, find a finance coach or confidant who can help keep you on top of your savings and financial goals. No need to lay out every financial detail if you don’t want to; just find a savings buddy who understand your goals and will help you stay on track when you face the temptation to spend.
Not Saving Money on Groceries
Budgeting articles commonly advise starting with your grocery budget when you are trying to cut expenses – and for good reason. This is one of the easiest ways to control and reduce your monthly spending.
Buying restaurant and take-out lunches and dinners instead of preparing your food at home will obviously cost you more. Buying ready-made food when you’ve already stocked up on ingredients, without taking the time to prepare your meals at night or in the morning, means you are spending extra money on prepared food and wasting food you’ve already purchased.