personal finances — June 08, 2016

How to Start Saving Part II

by Susannah McQuitty

You got this—all you have to do is start!

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You made it through Week 1 of our Budget Bootcamp! Good on you. Let’s review what we did last week:

  1. Record everything you bought by keeping every receipt.Balance Your Budget
  2. Sort those receipts into Wants, Comforts, and Survival items.
  3. Write a budget that clearly defines your Wants and Comforts.

Week 2: Sticking to Your Budgeting Plan

What’s going to be the same this week? Keep on saving your receipts and comparing them to your budget at the end of every day.

Here’s the number 1 thing to remember this week. You ready?

Don’t stray from your budget.

The hardest thing about sticking to your spending plan is that it’s entirely self-imposed. There’s nobody forcing you to fork out money left and right. Nope, the temptation’s going to come from your own head, and you’ve got to be ready to overcome it.

5 Ways You Might Rationalize Overspending

1.    “I deserve a treat.”

Don’t have doughnuts everydayOuch—this one’s my biggest weakness. If I have a bad day, I want to buy something. I’ll go to the Dollar Store, Walmart, or browse the Internet for something that will make me feel better.

Bad move.

Impulse buys can be extremely satisfying in the short term, but they often put a pretty nasty dent in that shiny new budget you’re trying to follow.

How to beat it: If you have doughnuts every day, they stop being a treat and start becoming part of your regular diet. Your budget just got on the treadmill, so let’s put those constant cheat days in the rear view.

2. “I’ll take some of next week’s money.”

Hold it right there.

How would you like it if a time machine popped up and Past You jumped out, punched you in the gut, and took your lunch money? That’s what you’re doing when you “borrow” from tomorrow.

This mentality can lead to going deeper into debt, because you’re essentially stealing from Future You.

How to beat it: Plan to spend next week’s money next week by putting it in next week’s budget. If you find something you really want, it will be worth waiting for. Don’t bully Future You.

3. “It’s cheap or on sale.”

Whenever I try to rationalize a purchase this way, I always hear my grandad’s Southern wisdom: “If you don’t need it, it ain’t a bargain.”

No matter how cheap it is, if it’s not something you need or something you’ve budgeted for, it’s not a deal. It’s over-spending.

How to beat it: Learn to walk away from mistakes that look like opportunities. Again, if it’s worth having, it’s worth waiting and paying for when you’ve budgeted for it.

Walk away

4. “I don’t want to miss out.”

And just like that, FOMO strikes again. The Fear of Missing Out gets me more often than I’d like to admit, whether it’s going to the movies to see the latest craze (I still haven’t seen Civil War—no spoilers) or tagging along on a shopping trip with my friends. How can I enjoy time with my friends if I’m not willing to spend money with them?

The thing is, you won’t really be able to truly enjoy what you buy if you’re overspending. You may miss out on some things at first, but you’ll learn to budget for trips with your friends and ultimately get in control of your money.

How to beat it: When FOMO strikes, remind yourself that you’re missing out now so you won’t have to later. It’s like you’re paying those experiences forward to enjoy them without the guilt.

5. “I’ve been waiting for it.”

You just got your paycheck, and that new video game you’ve been dying to get came out this weekend. Here’s the problem: It’s more than you previously budgeted for, but Future You won’t mind; she wants this game too!

Stop. Breathe. Walk away.

Stick to your budget or it’s Game OverIf you’ve waited this long for a purchase, you can wait a little longer until you’re able to afford it. After all, the game’s not going anywhere.

How to beat it: Come up with a payment plan — on your own, not with a seller — that will show you just how much longer you will have to wait. It may be a little depressing, especially if it will take another paycheck or two, but it will help you focus on your goal and each step will feel like a win.

At the End of the Week:

See how you did. Sort your receipts again into Wants, Comforts, and Survival. Did you stick to your guns and spend what you planned? If you didn’t, where did you overspend? How can you do better to change your habits in Week 3?

On the other hand, did you spend exactly what you budgeted with no money left over? YOU ROCK. And it probably wasn’t easy. Go celebrate (by doing something fun and free—you’d be surprised how much fits into that category)!

Set new spending goals and write a new budget. Write down everything you wanted to buy this week but couldn’t because it wasn’t in the budget. You can even designate money for potential unplanned purchases — spontaneity isn’t bad if you plan for it.

Remember, if you set aside money ahead of time, you can buy whatever you want without the guilt! It’s worth the effort, trust me.

Coming up: Time to Start Building your Savings!

How, you may ask? Now that you’re more familiar with your spending strengths and weaknesses, we’re going to start looking for ways to shave away a few bucks at a time to put toward the future.

See you next week!

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