Hi, I’m Cathy Curtis. Thank you for joining me on my podcast, Financial Finesse. Lately on the podcast, we’ve been talking a lot about awareness, mindfulness, and creating space for what’s most important in our lives. I think these topics are so important because of how they relate to our finances, and specifically, our spending habits. When we’re not aware of where our money’s going, it’s easy to get off track when it comes to budgeting and long-term financial goals. So, in this episode, I want to focus on a few strategies to keep yourself on track that don’t involve traditional budgeting. Instead, they’re going to require you to be more self-aware, mindful of your spending, and intentional with where your money goes.
[01:37] #1: Identify Your Values to Reach Your Financial Goals
The key to better budgeting is to make it feel less like deprivation and more like prioritization. Understanding your core values, financial and otherwise, and aligning your spending with them can be really motivating. And when you feel more aligned, it tends to lead to greater fulfillment and better habits.
Here’s a few suggestions to align your new budget and spending plan with your values.
- Create a financial plan that emphasizes your goals, whether that’s early retirement, buying a house, or taking a long, expensive vacation.
- When you’re estimating costs, it’s always better to be conservative. Everything always costs more than we think it will.
- Link your spending to things that you value. This may require some self-reflection work, but it will be really worth it.
- Use visuals to maintain your motivation. Pop some pictures up on the wall over your desk or create a vision board on Pinterest.
- Revisit your goals regularly.
- Give yourself grace and a chance to rework the numbers or try again if you fall off track.
[02:47] #2: Budget for Your Future, Not Your Past
According to a recent Bank of America survey, 64% of Americans say their spending habits have changed since the pandemic started. In addition, 46% of affluent Americans have been getting their financial lives in order during the last 12-18 months and expect to reach their key financial goals a lot sooner than they thought they would.
That means that many of us not only changed how we spend our money, but we also developed more financial discipline during the pandemic. I think it’d be fantastic if some of us could maintain those money habits we developed, let’s face it, when we had fewer options. And creating a spending plan that reflects those habits can be a great way to keep the momentum going in the right direction.
Remember that small consistent actions over time often lead to the best results. And if you start to revert to your pre-pandemic spending habits, that’s okay. We’re only human. But here are some tips for getting back on track if that happens.
- Print out a copy of your plan and post it somewhere that it’s visible to you, so it stays top of mind.
- Track your spending. It’s something that none of us like to do, but it really does help. You can use apps like Mint.com, or there’s another one called YNAB that people like.
- Try the envelope system. This may seem really old fashioned, but it works. Take an item, whether it be clothing or dining out, and put the cash that you have budgeted to spend on it in the envelope. When the cash is gone, you can’t spend any more until the next month.
- Leave the credit cards at home. Well, that’s easier said than done because now you can pay with your phone. And who is going to leave their phone at home? No one. Try paying with cash or using your ATM card whenever possible so that you’re not buying on credit.
- Walk away. If you’re tempted to buy an item you don’t really need, simply leave the store, walk around the block and think about it. I’ll bet nine times out of 10 you won’t buy the item.
- Reward yourself each month that you stay within budget. Reward yourself in some small but significant way, for example, indulge in a nice lunch out, get a pedicure, order a glass of wine with a meal.
[05:06] #3: Get Your Shopping Habit Under Control
Here’s an area that I’m going to talk about, and it’s clothes shopping. But everybody has budget busters. Mine happens to be clothing, so I’ve developed a bunch of tips for myself to keep my habit under control. And I think you’ll find them useful whether you clothes shop or not.
- Number one. Try very hard to intentionally schedule shopping trips instead of spontaneously dropping into stores just to see what’s new.
- Number two. Don’t shop when you’re lonely, tired, frustrated, anxious, or bored. When you’re emotional, you tend to make bad decisions.
- Avoid shopping immediately after a setback or a major victory. Again, emotions.
- When the adrenaline kicks in, you know that feeling when you catch yourself in a shopping frenzy. Leave the store before you buy anything. Focus on centering yourself first.
- Number five. Don’t let friends, shop owners, or salespeople convince you that something looks great on you when you know it doesn’t or you don’t like it or it’s not your style.
- Decide what you need in your wardrobe and make a list. Take the list with you when you go shopping.
- Number seven. Before you buy anything on sale, ask yourself whether you would buy it at full price. How many of us have gotten in the sales trap?
- Number eight. Think quality, not quantity. Not only will the item of clothing last longer, you’ll love it longer. And this is a great way to save money on clothing over the long term.
- Stop rationalizing. You really do not need a whole new wardrobe because you got a new job or because you now work at home.
- Number 10. Buy things that you’re going to wear now, not for a far-off occasion or event that may never happen. Who wants to have something hanging in their closet for two years without getting to wear it?
- Number 11. Buy clothing for the way you live now, not for the way you wish you were living. For example, buying fancy dresses when you never go to fancy parties.
- Number 12. Avoid buying one-off pieces of clothing that don’t go with anything in your wardrobe. We all have those.
- Don’t buy clothing in the wrong size thinking you’ll lose weight or have it taken in. Although I have to say, having a good tailor is worth its weight in gold if you do find something really great, and you can have it taken in. Either that or buy yourself a sewing machine.
- Fourteen. Try shopping with cash, not credit cards. It’s much easier to set limits.
- Fifteen. Limit the number of trendy items you buy to just a small percentage of your wardrobe.
- I love this one. Number 16. Think number 10. Everything you buy should be as close to a 10 as possible. It’s a great visual.
- Realize that a new dress, skirt, blouse, piece of jewelry are not going to make you more beautiful or change your life, unfortunately.
- To help make better buying decisions, analyze your wardrobe to understand what your favorite go-to pieces are. What are the common themes?
- Home in on what colors and styles look best on you to limit your choices. Remember all those women that did colors for side work? It was kind of fun.
- Instead of going shopping with girlfriends, do something else like going for a hike, to a museum, or out to lunch.
- Twenty-one. The one in, one out rule. And if your wardrobe is really large, you may want to release two or three pieces for each new one that you buy. Added benefit, somebody else gets to wear your discarded piece of clothing and enjoy it.
- Think like an economist and analyze cost per wear before buying.
- And lastly, track your clothing and accessory spending to hold yourself accountable.
Okay, so those are my tips to try and rein in a clothing shopping habit or another habit that you have. Things that you buy too much of.
[09:34] #4: Find Your Personal Style to Reach Your Financial Goals
This next part I’m going to talk about also relates to clothing, and it’s developing a personal style, which can really help to not buy in quantity and things that you never wear. Because a lot of women buy things that they never wear. They hang in the closet with the tags on.
So, here’s some tips to identify your style.
- Go into your closet and pull out pieces that you wear over and over again. Maybe even put them on a separate rack. This gives you really strong clues about how you like to look. And at the same time, if you have time, set aside stuff that you haven’t worn in a year.
- Get inspired. Go through magazines, tear pictures of outfits that appeal to you. Go on Pinterest and pin things. And you’ll start getting an idea of what you’re really attracted to.
- Tip number three, revisit your routine. What are you doing now? What’s your life like now? Are you working at home? Are you dining out with friends? Did you join a new gym? What is your current lifestyle? And our lives have changed, so this could look completely different than it did two years ago.
- Here’s a great tip. It’ll cost you money, but it will save you money. Hire a professional stylist. If you find it really hard to go into that closet and do it, have somebody else go in there and help you. I’ve done it. It’s great. And it’s a lot of fun too. You can also employ somebody to help you shop. I think it’s worth it. This is sometimes. Where it’s worth it to spend the money.
All right, there’s how you’re going to figure out your style and save some money that way.
[11:17] #5: Go on a Decision Detox to Reach Your Financial Goals
Another way to keep yourself on track financially and reach your financial goals is to give yourself a little bit of a break. Sometimes it’s difficult to stick to good habits, and it may be because of decision fatigue. When you get there, your ability to consider the long-term impact of a decision goes out the window.
So, there’s nothing wrong with you if you have trouble accomplishing your goals. It just means you may need to go on a break. So again, here’s some strategies for reducing decision fatigue and boosting your mental energy.
Number one, anticipate routine decisions. Do you find yourself wasting time on similar decisions every day and get really bored with them? Like what to wear, or what to eat for breakfast, or what to eat for dinner? The fewer decisions you make earlier in the day, the more energy you’ll have for later.
So, the solution is to plan. Choose the outfit the night before, plan your meals on Sunday night. Paying bills. So automation is key here. Put all your monthly bills on automation and also your transfers, like transferring to an emergency fund or retirement savings or even to your financial goals account, like if you’re saving to buy a house. Automate everything.
Another tip: set healthy boundaries and learn to say no. This can sometimes be referred to as people-pleasing. If you tend to agonize about how to respond to invitations or requests, this is tiring. And what it really means is setting healthier boundaries. It’s totally not easy. So many people suffer from it. But it can save you valuable mental energy.
There’s a great book about this called Essentialism. And I highly recommend reading it. It will get you focused and thinking about what’s most important.
Another tip, and we talked about this within the clothes shopping area. Avoid making decisions when you’re tired, hungry, stressed, etc. When you’re feeling emotional, just don’t make any decisions. It’s just not good. You’re in survival mode, and you’re likely to make a bad decision. So instead, spend a few minutes meditating, go for a walk, take a few deep breaths, connect with a friend.
Tip number four. Designate times to check email, texts, and social media. I don’t know how many times I’ve tried to do this, but I think it’s so important. We’re bombarded all day long with communication. And it’ll surprise you how much more you can get done when your phone isn’t distracting you. Even just turning off the pings and dings that you get when an email or text comes in could be really helpful.
Number five, don’t be afraid to delegate. Just because you can do it all doesn’t mean you have to. Our time and energy are finite. So sometimes reaching your goals means asking for help. And it can be at work, at home, in your financial life. Wherever you feel like you could delegate and afford to delegate it, do it. It’ll bring you more joy, it’ll be worth it.
So, there you have it, my five strategies for making better financial decisions without creating a traditional budget or tracking your spending. And if you want to go deeper into these strategies and create a spending plan that’s aligned with your values and financial goals, please visit curtisfinancialplanning.com/resources and download The Happiness Spreadsheet, a fresh inspiring approach to budgeting.
And as always, I’m available at Cathy@curtisfinancialplanning.com. And please look at my website, curtisfinancialplanning.com. Thanks for listening. See you the next time.