Whether you’ve always had a budget, just started to budget, or think “budget” is a scary word, you probably have at least one financial weakness. We all do. We’re only human, after all, and money management doesn’t always come naturally. We don’t always want to use our money sensibly, so sometimes we don’t.
Saving money can seem hard because it is a long term goal. To save enough for the things we want in adulthood can take years, and we naturally may get discouraged. Not everyone can afford to save much once the household bills and expenses like health insurance premiums have been paid. Even if you’re not actively saving or budgeting, you may wonder how on Earth you manage to spend your entire paycheck every month.
And this is when your financial weakness slips in to bite you. That daily cup of coffee from your favorite café may seem small, but think of how it adds up. Same goes for your regular evenings out with your friends, or your online shopping habit. What can you do?
Identify your Weakness
First, figure out where your specific issue or issues are. If you have a budget already, this is probably the easy part. But if you don’t, spend a few weeks tracking your expenses by keeping receipts and writing down what you spend. If you spend exclusively with debit or credit cards, you can look at your monthly statements as a shortcut. Then you’ll have a clear picture of where your money is going.
Now really look at what you spent and start to categorize. If you are shocked by the amount that falls into any single category, that is probably a great place to start.
Set a Limit
Once you can see how much you’re spending on your weakness, it’s time to decide how much you want to cut back. This is entirely up to you, your goals and your budget. But you shouldn’t just pick an arbitrary number; really think about what that number will mean to you. Can you live with a budget that involves going out to lunch no more than once a week, or can’t you? If not, you won’t stick with your limit and then you’ll be right back where you started. Be optimistic, but realistic with your goals.
The limit is great, but it doesn’t actually solve the problem. Now it’s your job to brainstorm how you’re going to stick with your limit. Let’s say your weakness is going out to eat from work. Just thinking, “I’m not going to do that anymore,” won’t get you anywhere. What do you need to set yourself up for success? Do you need to pack your lunch the night before to save time in the morning rush? Should you cook extra food at dinner so you have something really filling to take in to work? The solution is up to you. As you implement it, make sure it’s really working for you and be ready to make adjustments if it isn’t.
Know Yourself and Be Honest
A weakness in finances is a lot like a weakness in your diet. To overcome either, you really have to know yourself. Take desserts, for example. Some people are able to have smaller portions less frequently and be perfectly happy. Others are better off saying no entirely; if they have one cookie, it only makes them want three more. The same holds true with finances. If the ease of picking up a cup of coffee at the café is too tempting, you may be better off making a hard and fast rule that coffee is only to be made at home.
Once you get your money weakness under control, you may be surprised at how much you can save. Just don’t be discouraged if you have a few setbacks, and never give up trying. The point of saving money is to help you get the big things you really want: the house, car, wedding, vacation, etc. Don’t let your financial kryptonite drain you of the power to achieve your goals.
This article is by Sabrina Matheson, a personal finance blogger sharing tips online about how to compare medical insurance, avoid credit card debt, and keep your finances running smoothly.