When you’re trying a new budgeting system, it can be challenging to get started with it or stick with it long enough to see if it will work for you. With all the different tracking methods, it’s natural to try out a few before one clicks. Having the right mindset around money, saving, and budgeting will help greatly. Here are five of my favorite budgeting mindset shifts that will help you focus on your money goals.
There is nothing more stressful than having an emergency pop up and no money to cover it - not only will you have to deal with what happened, you’ll have to deal with the added pressure of scrambling to cover it.
What I love about a budget is that it forces you to face your money head-on before a disaster strikes. After all, it’s there in black and white. Embrace the budgeting mindset and habit to look at your bank account every day. Don’t get defeated by what you see, just look at it.
When you adopt the budgeting mindset of facing your money, you can also begin to track your progress and feel empowered and, dare I say it, thrilled when you see that number in your savings account go up, up, up toward your financial goal. You can’t get there joyfully if you don’t know what your financial picture looks like.
Like dating, it may take a few tries to find the budget or money method that you want to use. Then, once you find a system you like, it may also require a few tweaks to get it to work perfectly for you and your needs.
Like any good matchmaker, when I work with clients, we look at wants and needs to come up with a plan that works for them. If it doesn’t work, there are other options and we’ll keep going until we find one that does well. For example: I am a digital budgeter, but many of my clients enjoy planning with paper and pen, so I created the Personal Finance Planner after listening to feedback from them about what they were looking for.
If it doesn’t work right away, don’t get frustrated. Again, like dating, it can take time. Sometimes you know right away if a method isn’t right for you. Other times, you have to stick with it to see if there’s any chemistry. Either way, be open, don’t get frustrated and give up. Future You will thank you. Which brings me to…
This simple budgeting mindset asks you to think about Future You. Before you choose to go against your spending plan and swipe that card, think about whether that purchase would benefit you in the future. If this is tricky for you and you jump to thinking of yourself in 50 years, start by placing yourself a few minutes into the future. Would that person feel good for spending $25 extra on snacks at the grocery story or guilty (and a little sick from all the salt)?
It can be hard to think about yourself in the future, especially if you’re feeling disconnected from that future person. There may be many steps between that version of yourself and where you’re standing today.
Remind yourself that the budgeting system you’re using right now is for that future person. At the end of the day, you don’t have to feel connected to them to prepare for them. And sooner rather than later, you will be that person.
Have you ever heard yourself saying, “Sorry, I can’t, I’m on a budget” when someone invites you to dinner? Dean’t that make you feel so restricted and awful? I’m pretty sure that’s why budgets have a bad reputation. For some reason, budget has become synonymous with I can’t have any fun with my money.
But if you flip that and focus on what you are going to have, suddenly your budget doesn’t seem so restrictive. This is true especially if you are truly spending your money on what you value and what brings you joy (as I’ve shared here in Using a Spending Plan to Manage Your Money).
When you use that budget mindset shift, you will think about your spending in a new way. It allows you to focus on what you’ll create, have, and/or enjoy instead of what you can’t have or spend money on.
I tell my kids they can have anything they want, but they have to earn the money for it. The same applies here. You can have anything you want, but you can only spend what you have. So, it makes sense to buy what brings you joy.
Sure, paying bills isn’t the most exciting way to spend your money. But if you just focus on the money going out, you’ll miss why you’re allocating it to those spending categories in the first place.
As you’re creating your budget, see every transaction as a joyful exchange. The grocery budget? It allows your family to have food so they are all healthy and happy. The retirement account you’re building up? Future You will be thrilled with the ability to retire without worry (and maybe even ahead of schedule!) and live comfortably. The downpayment for a house, car, boat, fill in the blank with what makes you happy? You can walk into the transaction with cash and not go into debt making that purchase.
I’d highly recommend the book Dollars and Sense: How We Misthink Money and How to Spend Smarter by Dr. Dan Ariely and Jeff Kreisler. It will help you with these budgeting mindset shifts and allow you to spot patterns in your spending. It’ll also encourage you to create systems so your mindset shifts aren’t just spinning their wheels.
After all, we sometimes have to trick ourselves to create systems to do what isn’t our natural default (especially if your default is to spend)! With these budget mindset shifts in mind, you’ll be ready to embrace budgeting with open arms and stick to it long enough to see real, meaningful progress toward your money goals!
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