You know you should be budgeting. In fact, like most people you have probably tried to but just can’t seem to stick with it. It’s okay for a week or two, maybe even a month but… well, you know, life gets busy you fall behind for a couple of days and then it’s just too hard to catch up again. You feel guilty for letting it go but after a while the memory of your budget fades and you return to your old ways. For a while it seems to be going just fine, that is until your next financial crisis arrives!
Sounds familiar? Like dieting, studying or exercising, sticking to a budget can be really difficult at times. We all have good intentions. We know we could do better with our money but it is so easy to give in when faced with time pressures, unexpected expenses and new shiny things that test our willpower.
Today I want to share with you 3 budgeting tips that you can use to help overcome lack of discipline when sticking to a budget:
Strategy #1: Have a separate everyday account
If you are between the ages of 18 and 40 the chances are that your biggest area of over expenditure is your ‘everyday spending’. Your everyday expenditure includes things such as groceries, petrol, pocket money, take away, coffees, bought lunches, dinners out, alcohol, etc. These are predominantly lifestyle expenses that as one-off expenses don’t cost a whole lot but those $10’s here, $25’s there really do add up, sometimes significantly.
At Grandma’s Jars we recognise that everyday spending is a major source of financial leakage, which is why we always require our budget coaching clients to set up a separate ‘everyday’ bank account. On the first of each month this account receives the funds budgeted for everyday spending for the month. The rules are then simple, you only use this account for everyday spending and this is all you have got, so make it last. If you get to the last week of the month and you have got $20 left – bad luck, it’s baked beans and rice for the rest of the month.
By having these funds in a separate account you have the physical boundary of funds in the bank account plus your budget to help you stay on track.
Strategy #2: ‘Get with’ technology
One of the biggest problems people face with budgeting is finding the time to keep it up to date. I remember when I first started budgeting we would keep receipts, stick them on a spike when we got home and then once a week we would spend half an hour entering the receipts into the budget. If for whatever reason we missed a week and we had two weeks of expenses to enter the job became a nightmare!
Fortunately, technology has evolved and developed to make the process so much easier. Mobile Apps now allow you to enter your expenses as they occur. Stopping for 5-10 seconds after each purchase to enter your expense provides a far more efficient way to budget. At Grandma’s Jars we encourage our coaching clients to develop the ‘spend and enter habit’. Not only does this mean fewer expenses are missed but it also ensures their budget is kept right up-to-date.
On the Grandma’s Jars application that we use with our clients, users are also able to set up all their regular expenses as recurring. These then flow through the budget automatically again, reducing the time and energy required to keep the budget up to date. Technology, when used properly, eliminates the ‘I don’t have enough time excuse’.
Strategy #3: Find an accountability partner
Find a person you really respect, someone who cares about you and who clearly have their own finances in order and ask if they will keep you accountable. Write down, then share with them what you want to do, why you want to do it, and how you are going to do it. Ask if you can meet with them once a month to go through your progress. If you truly respect this person you will not want to let them down. You will find yourself at the shops wondering, “what will [insert name of accountability partner] say if spend this and blow my budget?” At Grandma’s Jars we know that our coaching clients will at least think twice about overspending because they know their personal budget coach will ask them about it at their next meeting. Having an accountability partner is a powerful way to make you stop and think twice when lack of discipline threatens to undermine your budget.
We will often look at other people and admire their discipline and at the same time rue our own lack of self-discipline. The reality is that everyone struggles with lack of self-discipline at different times. They key to succeeding is to put systems and processes in place that help you overcome your lack of discipline. We have been using these three strategies with our coaching clients for 15 years to great success, we hope they will be just effective for you.