We optimize everything these days. From pillows that monitor your sleep to devices that count your steps to apps that measure your productivity, no goal can’t be logged, automated, and tracked.
But what about your budget? In an age where we take joy in tracing every bit of progress we make, somehow the act of monthly budgeting is seen as archaic.
However, if we see how effective these optimizations can be in other aspects of our lives, why not use the same principle with budgeting? Here’s how you can trick yourself into doing it.
How to trick yourself into monthly budgeting
“You make what you measure.” This phrase, often used as a reminder at startup companies to create and measure your goals and progress, also works well in monthly budgeting.
After all, how can you know how well you’re doing if you don’t know what you’re aiming for and can’t track it? Once you have your financial goal — such as learning monthly budgeting — here’s how to follow through with it.
1. Decide to become the ‘boss’ of your money
The first way to trick yourself into monthly budgeting has nothing to do with numbers and everything to do with mindset.
Kristin Wong, author of “Get Money,” says that monthly budgeting gets a bad name because of how it’s designed, with its restrictive nature making the process feel like “having a boss for your money.”
But a simple mindset shift can change everything. In her words, “If you hate budgeting, the key to learning to love it is to flip the script and become the boss of your own money.”
And it all comes down to asking the right questions:
Ask yourself, why would I want to get my finances in order? The answer might be, ‘I want to pay off debt so I can travel carefree,’ or just ‘I want to support my family so they feel secure.’ Whatever the mission, when you have a clear and meaningful objective behind your target, it’s no longer about restricting yourself, it’s about serving your own purpose.
Discover what motivates you, and you’ll automatically want to use the methods that can help you achieve it — monthly budgeting included.
2. Find an app that tracks your spending for you
Since we’re talking about tricking yourself into budgeting rather than learning to love it, the next step is automation. And financial apps can do a lot of the heavy lifting for you.
Apps like Mint and Personal Capital help you create a budget and track your spending. Qapital helps set a goal and then automates savings towards that goal. Albert spots savings opportunities you might be missing out on. And Joy tracks your emotions along with your spending.
Together, apps like this can form a toolbox that you can rely on to turn your monthly budgeting into a well-oiled machine.
3. Decide on small changes
Another reason it can be challenging to stick to a monthly budget is the desire to “perfect” a budget right away. But just like with nutrition and exercise, crash budgeting isn’t sustainable.
Consumer finance expert Andrea Woroch talks about why starting small is better:
“It’s a lot easier to make small lifestyle changes than it is to commit to a complete life overhaul. For instance, if you eat out every meal, it’s not realistic to cut it out completely. Instead, start by brown bagging your lunch twice a week (pick the same two days so it’s repetitive, like Mondays and Wednesdays) until it becomes a habit, and continue building from there.”
The importance of the routine aspect of this strategy can’t be overstated. When you’re starting out it’s more important to build solid habits than it is to execute perfectly. After all, you’ve built the habits that led to your current spending, so you’ll have to build new habits to create new spending behaviors.
One small, routine habit Woroch has tried: “No-Spend Wednesdays.” She says it was hard to do at first, but now it’s a simple part of her routine — one that leads to easy savings.
4. Try using cash only for a month
If you think maintaining a budget is archaic, you might think using only cash is positively medieval. However, it’s also a useful tool for managing your spending.
Wong is a fan of paying cash herself, saying it “might be the easiest way to trick yourself into budgeting.” As easy as it is to swipe a credit card, pulling cash out of your wallet shows you how finite your funds are.
Here’s how Wong suggests trying it:
“Decide how much you want to spend on, say, restaurants every week, then withdraw that amount from your bank account and make it a rule only to pay cash when you go out to eat. This is a super easy way to force yourself to think about your spending more. Research also shows paying with cash makes you value your purchases more.”
Another option is to try gift cards. Financial counselor Deanna O’Neal suggests this method to either find out how much you’re spending at your favorite places or to better control your spending there.
Her tip is to buy gift cards at the beginning of the month for the whole monthly amount you’ve allotted for that place. And once you’re out of money on them, you’re out, just like you would be in cash.
5. Pair up with a friend
Finally, the hardest part of sticking to monthly budgeting: Willpower. And the easiest way to boost it? Find a friend.
Woroch advises getting a “budgeting buddy” to hold yourself accountable for your monthly budget. Preferably, she says, it would be someone working on the same or similar goal and someone you trust:
“Share your budgeting goals with a trusted friend or family member and ask them to help keep you on track throughout your journey, and confidently put you in your place if you start to stray.”
What’s more, an accountability buddy doesn’t have to be someone who’ll scold you if you veer off course. Rather, find a partner to work with on your financial goals who’ll help you discover why you’re struggling. Remember, monthly budgeting isn’t just about numbers. Choosing a buddy that can help you work through mental blocks will go a long way.
Letting the math speak for itself
Here’s the real beauty of monthly budgeting: If you start small and find ways to trick yourself into maintaining the budget, it gets easier over time. Monthly budgeting feels restrictive when it is restrictive, so ease yourself in.
Then, when you start seeing progress, you’ll find it easier to build stronger momentum. Your budget might start to seem almost too easy. Or you could end up having more creative ideas for savings or income opportunities that you would never have thought of before.
Just start. Then keep iterating until you find your budget’s sweet spot between earning, spending, and saving.
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
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3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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