Three months ago we set a goal in our family to really stop spending more than we earned and to pay down debt. We set a timeline of 3 months to get it together. We started using a money management software to track our budget and trend our spending. We even showed the teens how to read the software and participate in our goal.
OMG!!! This hasn't been easy. About a month ago I was about to freakin throw in the towel. I'm the frugal one in the house, but after the dog ate my shoes (we'd already spent our clothing allowance for the month) I just about lost it. In fact, I did lose it--I bought shoes. I had to take money out of savings. Does that count as an emergency? It's not like I didn't have other shoes, but come on!
But guess what? We are now at that 3 month goal and we're successful. We paid off one credit card and got our spending under control and have a workable budget. Maintaining discipline is so hard, so here are my tips for keeping it together:
- State your goal positively.
Instead of saying “I’ve got to pay off my debt” say “I’m reducing my debt”. With the first statement you're being passive. It sounds like it will never happen. The second statement is active and implies that you are making progress.
- Make your goal visual.
Create a chart or that shows your current savings or debt situation and tracks your progress toward nearing your savings or debt payment goal. Do what works best for you. It might a big poster, something you carry in your wallet or a graphic that you turn in to your computer wallpaper. Hey it might even just be the first thing you see every time you log on to your money management software.
- Don’t become obsessed.
Don’t look at your money management tool too frequently. Checking daily or several times a day will only lead to frustration. You’ve got to see progress to keep from getting discouraged, but you won’t see progress that quickly.
- Don’t forget your baby steps.
Of course big changes make the most difference when you trying to boost your savings or pay down debt, but if you shrug off the small stuff, you’ll be spinning your wheels. So if you’ve vowed to give up the daily Starbucks (as I did) stick with it. I had to keep my underwhelming progress at bay and bypass drowning my frustration in a latte. But now that I've seen my coffee shop spending category dwindle I'm really off the juice.
Pat yourself on the back, but make sure you don't spend money doing so. I'm not sure how we will celebrate but just being able to show the kids that we've reached our small milestone is so great.
- Keep setting goals.
Once you've made it to one goal set another attainable goal.
- Expect slip ups.
Over spending is like an addiction. Every addict knows that they could regress at anytime, it's important to recognize this possibility and get back on track if it occurs--don't give up.
NOTE: Money management software is not the same as online banking. In fact if you use online money management software it often links to your online banking. It's helpful to use both since typical online banking cannot offer trending or budgeting as easily. It's also helpful to log on to your online banking daily since this is the best way to track your cash flow and possibly detect fraud.