I’m the first to admit I’m not perfect when it comes to “sticking to my budget” but then again, I’m also not great at saying no to wine and cheese so it’s no surprise, really. When I think back on the last 10 years, I could bore you with every fad diet and extreme weight loss method I’ve shamelessly attempted. I’ve jumped on every fitness bandwagon and like most 20-something-year old women, I’ve lived on kale and green juices for a week in an effort to be summer ready in 7 days. Ridiculous.
So where am I going with this?
A lesson. And one of the biggest I have learnt to date – a list of restrictions, whether it’s a diet, a budget or a lifestyle change is simply a list of unrealistic goals setting you up to fail. A budget, or a lifestyle change is best served in the form of a habit. Habits that shape your life and let you achieve your money goals without the frustration of missing out, cutting out or endless spreadsheet updates. Hashtag budget goals, right?
So how do I get it, find it, start it?
When it comes to shaping up your budget, there is no “one size fits all” approach and certainly no quick fixes either. Money is incredibly personal to who you are and how you live as a person, it would be so naïve of me to give you a budget template and expect the same miraculous changes for everyone. We’re not just different in looks, we’re different in every aspect of our lives and we need a budget that suits us as individuals. So instead of giving you “budget tips”, I’m instead going to share some good budget habits. The kind of habits that will help you transition into a healthier, happier and more well-rounded money manager –
Habit 1 – define your end goal
You don’t need to be rich to be worthy of good budget habits or changes, you just need to be clear on what it is you want to achieve. And realistic achievements of course.
Write down two to three things you want to achieve in the next month. Perhaps this is taking your lunch into work every day, making coffee at home, exercising outside or setting up bill reminders so you can take advantage of on-time payment discounts! Remember, keep it simple.
Write down two to three things you want to achieve in the next year. This timeline allows you to have a more meaty goal, such as paying off bad debt or building a routine about regular debt payments – plus a little extra, of course! If you’re a “Barefoot Investor” fan, this could include growing your Mojo account to 3 months and beyond. And for the non-followers, I’m referring to an emergency fund. Something we should always be working towards.
Write down two to three things (or even just one!) you want to achieve in the next 5 years. For some of my girlfriends I can hear them screaming – a house, I want to buy a house! And for others It may be starting or expanding their family or starting a new job. Whatever the case, be ready for this one to evolve as the years roll on.
Habit 2 – Get familiar, really familiar (wink, wink)
Get in, around and amongst your money. Simply writing everything down from your money coming in to your money going out is the easiest and most effective first step. It literally puts everything out on the table and allows you to have complete visibility of where your money is going, or not going. This doesn’t need to be in a spreadsheet (although if that’s your jam, go for it), a blank piece of paper on the kitchen table is perfectly fine and does the same job!
Over the long weekend, I sat down with Ben and on a blank A4 wrote down every expense we could think of, from Melbourne’s best vanilla slice on a Saturday to my pill prescription. We kept it simple, looked at it, held it (ok, not really), drank wine over it and really got to know it. In the past, I would have been ashamed of the numbers, making sure every shred was ripped up before putting it in the bin. Not this time. I’m not embarrassed and I’m not going to let some stupid numbers on a screen define me.
Habit 3 – Be accountable, aka “adulting”
Adulting is hard, there’s no doubt, but being an adult also means we are equipped with mature brains which can take on a challenge or two…hopefully. Making changes in our life are not always easy, but when you have well-defined goals, a clear understanding of your money coming in and going out, simplifying your budget is actually quite easy. Being accountable is the hard part.
If you want to make change and bare the fruits of your new money habits, you need to own the process of change too. Lifestyle changes, physical changes, career changes don’t just happen with a plan, they happen because there is a willingness to change.
Habit 4 – Celebrate the small wins
You have defined your money goals.
You have clarity on how much, when and where.
You have the motivation and the willingness.
You start, you encounter a little bump in the road, so you stop. Right?
Celebrating all the wins, no matter how small or insignificant they seem is important. Whether it’s saving an extra $20 or buying 3 not 5 coffees one week is a win. Making changes are not going to happen on a perfect trajectory. There will be slip ups, guaranteed. Be kind to yourself and enjoy making your new habits part of your new money lifestyle.
Fearless Female Traders