Poor spending habits may lead you to one too many ramen dinners, trying to make that last $50 stretch until your next paycheck. In the worst case scenario, they may lead to a complete financial meltdown. Who needs that kind of pressure?!
Budget planners are a genius way to get a handle on your money situation. You can use one for goal setting, task assigning, habit tracking, or collection new ideas and strategies for saving money instead of blowing it. With so many transactions happening digitally, through online shops or banks, we don’t touch money as it moves in and out of our wallets. Out of sight, out of mind!
Can a notebook really help you become more mindful about spending? Yes! In fact, people in Japan have used kakebo (pronounced ka-kay-bo), a “household account book” to record income and expenses for generations. Maybe that’s why they have one of the highest savings rates in the world! I’m experimenting with one now, after reading Kakebo: The Japanese Art of Mindful Spending, and will report results soon. This system is comprehensive, including a monthly budget and savings forecast, in addition to daily and weekly tracking.
Of course, it’s not quite as simple as just cutting back on those artisan lattes every day on the way to work and viola, you’ve got yourself a retirement account, but that will probably help.
Think of your lifestyle as your business, even if you’re actually not an entrepreneur. Watch your cash flow: money’s coming in, and money’s going out, like ocean waves. Would you make the same decisions if it would mean a complete failure of this business enterprise? Probably not.
If you bullet journal type planner, keeping track of your cash flow can even be fun and creative. Sasha, over at Life’s Carousel, has some clever budgeting page spreads, like the cute piggy bank savings tracker below.
And this awesome spending log tracker for a budget planner… (it makes me happy just to see that sweet blue posey purse)
Take a look at the following ways to help change spending habits and use them as a building block for your own budget control planner.
Budget Planners: Ready, Set, Goals!
Why are you trying to save money? What is the end-goal? Do you have little sub-goals you’d like to add in there? Sure, retirement is a huge ordeal and we need to be prepared, but are there other things you’d like to purchase or save for along the way?
Maybe you’d like to purchase a home or buy a boat. Whatever the goals, write them down in your bullet journal. Put them in a place where you’ll see it daily. Attach pictures if it helps you keep the vision alive. The idea is to create a reminder of why you’re changing spending habits.
30-day Budget Plan, Take 1
For the next 30 days keep track of all money transactions. Yikes! That sounds like a lot of work, and it is, but you wouldn’t believe the amount of clarity you’ll gain about your financial life. You can easily note all money that comes in and all money that’s spent in your journal, using a tracker. Or, you may want to try a free digital finance tracker, such as Mint, or you can create your own spreadsheet. Whatever helps you get a handle on your money.
Get receipts for every purchase (emailed receipts count) and if no receipt is available, put a reminder in your journal or cell phone notes section of price/date/other details. Leave nothing out! Set aside 10 or 20 minutes each evening to log everything for the day. At the end of the month put an “N” by the needs and a “W” by the wants. No, those concert tickets are not considered a need no matter how badly you want to go.
Be realistic and honest for the best results. The monthly rental payment, utilities and insurance premiums are examples of true needs.
Once you’ve identified the needs and wants, analyze the categories and pinpoint the areas that could use some work.
Are you spending more than you thought on deli meals or vending machine snacks? Is the grocery bill too high? It all adds up.
Change Spending Habits
Being frugal and mindful about spending takes a little bit of work, sacrifice and creativity. But it’s very possible and as long as your goals are more important than your fancy coffee, you’ll have great success! Start your next month out with a fresh, new budget and cut costs in the categories you found where spending out of control.
Here are some ideas where you can cut costs:
+ Make your coffee at home; there are plenty of recipes online for fancy drinks that taste the same
+ Pay your bills on time to avoid late fees and penalties
+ Avoid paying the minimum due on a credit card; start with twice the minimum payment and work your way up until it’s paid off.
+ Keep credit card balances at no more than 30% of your credit limit. The debt-to-income ratio on your credit score will look better.
+ Use coupons when available; you don’t need to spend hours clipping coupons, but if you can grab a coupon for something you use anyway…
+ Always shop with a list! (Bring your bullet journal with list?) Don’t go to the grocery store hungry or without a list. You’ll end up with a basket full of impulse buys.
+ Use cash whenever possible and only keep what’s necessary in your wallet. Cash is tangible; we can see it disappear right before our eyes. It’s easier to say no to foolish purchases this way.
+ Review your bills and especially your credit card statements each month for errors.
+ Avoid overpaying for anything. Do your research. Find the best deals. This includes everyday purchases to auto insurance costs.
+ Don’t try to keep up with the Joneses. They don’t have the same goals or budget as you. Comparing your spending to theirs is pointless. Keep your eye on your own prize.
With all this cost-cutting you’re doing, your savings is probably looking much better! It’s wise to have more than one category for savings as well; vacation, retirement, new vehicle, rainy day fund, etc. Figure out the percentage or specific dollar amount you’re allotting for savings each month.
Half of that amount should go toward retirement, then divide the remaining half among the other categories, however you’ve prioritized them. Some people are comfortable using cash and putting the budgeted amount for each category of expenditure or saving in individual envelopes.
Others prefer using budgeting software for the convenience of running reports, graphs and pie charts. (That’s my favorite part of Mint and similar apps!) Whatever method you decide on, stick to it.
And finally, you’ve managed to cut back on expenses and the savings accounts are coming along nicely. You feel more prepared to face the future and you’re still living comfortably, just smarter.
Don’t forget to reward yourself for the job well done – within reason. 🙂 Hole up in bed one Sunday and lose yourself in a novel or your favorite Netflix. Or take yourself and a friend on a date to the movies. You deserve it!