Happiness

Budgeting For Happiness: Your New Spending Plan

New Spending Plan

Many women resist traditional budgeting because it feels so restrictive. Your new spending plan prioritizes what’s most important to you.

At the mention of the word “budget,” many people cringe. Like the word “diet,” it brings about a sense of dread, thoughts of deprivation, and the possibility of failure. Instead of focusing on the long-term rewards of effective budgeting, you start to focus on what you can’t have right now. When that deprivation mentality kicks in, it makes mindless shopping or impulse purchases harder to resist. But don’t fret; this mindset is fixable if you take a different approach with your spending plan.

The Psychology of Budgeting

There’s a psychological side to budgeting. It involves motivation, discipline, and often a bit of creativity. The idea of budgeting creates an emotional response in your brain, and it’s not always a good one. Creating and sticking to a budget can feel like yet another task on your already endless to-do list, not to mention the fact that this task also involves math, which most of us tend to avoid. But stick with me here because you do need a budget, just not the kind that fills you with an impending sense of doom. 

Why You Need a Budget 

As challenging as it can be, budgeting is a necessary not-so-evil. For starters, identifying where your money is going every month can help you find ways to cut back, increase your savings, and work toward your financial goals. A recent U.S. Bank study revealed that only 41% of Americans use a budget, even though it’s one of the most effective ways to keep track of our finances. 

It’s time to try a better way. Budgeting can help you improve your financial security, limit unaligned spending, and avoid debt and financial stress. It’s one of the quickest and easiest ways to increase your financial control and sense of financial fulfillment. 

What If There Were a Better Way? 

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 very motivating. And when you feel more aligned, it tends to lead to greater fulfillment and better habits. 

Here are some suggestions for aligning your new budget spending plan with your values: 

  • Create a financial plan that emphasizes your goals, whether that’s early retirement, real estate investments, or that long-awaited vacation  
  • If you’re estimating costs, it’s always better to be conservative (i.e., overestimate rather than underestimate)
  • Link your spending to things that you value—this may require some self-reflection work, but it will be worth it 
  • Use visuals to maintain your motivation (pop pictures on the wall over your desk or create a vision board on Pinterest), and revisit your goals regularly  
  • Give yourself grace and a chance to rework the numbers or try again if you fall off track 

Your New Spending Plan

To implement these ideas in your own budget, download The Happiness Spreadsheet for a fresh, inspiring approach to budgeting that aligns your spending plan with your values.

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Budgeting for Happiness with Spreadsheets On Spreadsheet Day

Nowadays, it seems there is a “day” for everything. And, today, October 17, is spreadsheet day. Spreadsheet day commemorates the day the first spreadsheet program, Visicalc, was released way back in 1979. Spreadsheets are a great tool because they help us to organize and categorize data into a logical format. Then, we can use them to analyze or help solve a problem or create a solution. 

Cash Flow Spreadsheets 

As a financial planner, one of the things I help people with is their cash flow – making sure that what comes in and what goes out is sustainable over a lifetime. It starts with a typical spreadsheet – a list of items and what they cost each year and then projected out over several years. The columns and rows add up into numbers that can be analyzed. 

But when it comes to spending, it’s not as easy as it sounds. Since resources are finite for most people, where the money goes has a significant impact on a person’s quality of life. Lots of people lose sight of this in living and spending day-to-day. For example, they may spend money on things or experiences that aren’t that important to them, and not have money left over for the things that are. Or, they may have a long term goal that requires saving up for, yet, they continue to deplete their checking account each month without saving a dime. 

Some of this spending behavior is a function of how our brains work. Immediate gratification is very compelling, and it’s hard to focus on longer-term goals unless we make it a habit. Another brain feature that makes it hard to be a disciplined spender is that our brains like novelty. We prefer new and shiny objects or situations – much more than the same old, same old. These biological brain cravings are hard to overcome unless we do it on purpose. That is where my brain hack for controlling spending comes in, and yes, it’s a spreadsheet: The Happiness Spreadsheet.

The Happiness Spreadsheet- what is it?

Filling out a Happiness Spreadsheet requires you to think hard and identify the things and experiences that are the most satisfying to you.  

It also required you to admit that you may be spending money on things that aren’t important to you at all. For example, you may own an expensive car that costs a lot to maintain and is a hassle to park, when you would rather walk, take public transportation, or rideshare. Or, you love to cook and eat simple healthy meals, but instead, you eat out four times a week. Once you identify your values and desires, you can focus on bringing more of them into your life through your spending habits.

Want to give the Happiness Sheet a try? You can download a free copy here: https://www.curtisfinancialplanning.com.

Happy spreadsheeting!

 

 

 

 

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A Spreadsheet for Your Happiness

I came up with a brainstorm in my usual place (the shower) one morning. I had been thinking about the cash flow work I do with my clients and how it almost always initiates a discussion about what they want more of in life.  It usually goes like this: We review the fixed or essential expenses like mortgage, property taxes, utilities, insurance premiums and then we talk about their  discretionary expenditures:  things like entertainment, dining out, travel,  and hobbies. Many times my clients are frustrated because they want more of these pleasurable activities and things in their lives but don’t know whether they can afford them. Or, in the case of couples, one party wants more of something and the other doesn’t!

This dilemma is one of the key reasons that many seek out a financial advisor. In my experience people want a financial plan for three reasons:

  • To track progress towards short-term financial goals, i.e. college education for children or buying a home.
  • To ensure that there will be enough money to live comfortably in retirement.
  • To find out whether they can afford more pleasure in their lives enjoying the things and experiences they love.

Back to the brainstorm: This is why I decided to write The Happiness Spreadsheet– it’s an ebook and a workbook. It leads the reader through the work of creating a spending plan for their discretionary dollars that I call The Happiness Spreadsheet. Why would a spreadsheet (of all things) help to make someone happier?  Because in order to figure out what you most want and what you can afford, both sides of the brain-the right/emotional  side and the left/analytical side need to be engaged to come up with the answers. Because there are dollars involved, it means trade-offs, and by putting the numbers down on paper, it is easier to see what trade-offs need to be made in order to fulfill your dreams.

If this idea sounds intriguing to you, there are several ways you can learn how to create your own Happiness Spreadsheet. One, you can buy the ebook on Amazon here. It’s only $3.99.  Or, you can sign up for a Happiness Spreadsheet workshop. The first one is April 28, and at the moment is full, but you can sign up on the waitlist. Those who don’t get into the first class will be emailed about the next class. Or you can email me at cathy@curtisfinancialplanning.com to explore other ways we can work together.

If you do buy the ebook, please be sure and give me feedback on your experience!

More resources for your Happiness quest:

From the Money Crush blog:  Why Budgeting Isn’t Just About The Number

From Oprah: Five Things Happy People Do

From Brain Pickings: How to Find Your Purpose and Do What You Love

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Curtis Financial Planning