spending plan

How to Stay Within Your Budget: Monitor Your Budget Busters

Monitor Your Budget Busters

We originally published How to Stay Within Your Budget: Monitor Your Budget Busters on February 20, 2017, and have refreshed it for 2021.

It’s not that difficult to create a budget. What’s hard is sticking with it over time. One way to increase your success is to track what you spend. Unfortunately, very few people have the discipline to track every expense. The good news is that you don’t have to do this to be successful.

Most people don’t overspend on everything. Instead, there are usually a few items—let’s say clothing, dining out, or travel—that bust the budget. Monitoring and controlling these budget busters can help you reduce your spending without tedious bookkeeping.

How to Monitor Your Budget Busters

To stay within your budget, monitor your budget busters. You know what they are. Perhaps you go to your favorite clothing boutique and can’t say no to the latest seasonal fashions. Or you find it impossible to browse a bookstore or Amazon without stocking up on the latest bestsellers.

Indeed, it doesn’t help that online shopping has made it all too easy to spend more money without any effort at all. And the pandemic only exacerbated this trend. In fact, consumers spent $791.70 billion online with U.S. retailers in 2020, up 32.4% from 2019, according to Digital Commerce 360.

Though online spending is up in general, the things we overspend on are as individual as we are. Identifying the culprits is the first step to creating a spending plan that will work for you.

A Simple Process to Stay Within Your Budget

  1. Make a list of your budget busters – you know what they are.
  2. Tackle one at a time, or if you are extra motivated and organized, all at once.
  3. Track your spending by employing the techniques below.

The envelope system involves placing your monthly budgeted amount for each item into an envelope in cash. For example, label the envelopes “clothing cash,” “shoe cash,” and “dinner-out cash,” and stash them in your wallet. When the cash runs out, stop spending until the next month when you will refresh the cash.

You may be thinking, “There’s no way I’m going to carry that much cash around.” And of course, there are those airline miles to accrue! In that case, write down your budget busters in your day planner or on a piece of paper that you post somewhere visible. After each purchase, subtract what you spent from your budget. Stop buying when you reach your limit.

If you gave up your day planner years ago and lose every piece of paper you write on, try booting up your favorite tracking software. For example, PocketGuard and Mint.com let you upload transactions from your credit cards and checking accounts to keep track of your spending. Each month, log in to see if you were able to successfully stay within your budget.

Learning to Spend More Intentionally

Alternatively, you can find a trusted advisor or friend to “buddy up” with and help you stay on track. Accountability is a powerful motivator.

Finally, try monitoring your budget busters instead of every expense for a few months and see how it works for you. I think you’ll find that it’s an excellent behavior modification tool. Moreover, you’ll become increasingly aware of spending habits that aren’t in your best interest. Over time, you’re likely to find it much easier to stay disciplined and reach your financial goals.

Do you want to manage your money (and life!) better?

Download The Happiness Spreadsheet and learn how to align your spending with your values for greater happiness.

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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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Where Creativity and Finance Connect

It was a beautiful sunny Saturday afternoon and the light was streaming in the windows of the cozy art studio. A long table was covered in butcher paper and  cheese and crackers, frittata and chocolate bars were ready to be consumed. As Tamara and I finished getting the room ready for our workshop, the attendees (all women)  began to arrive one by one, ready to challenge themselves to a few hours of personal exploration and discovery.

It was the Happiness Spreadsheet Workshop entitled “Where Creativity and Finance Connect”, and the exercises these women were about to embark on were from my newly published ebook, “The Happiness Spreadsheet.” I asked artist and attorney, Tamara Holland of Bean Up The Nose Art if she would team up with me to lead the “right-brain” creative exercises while I led the more analytical work. I couldn’t think of a better partner and I was fortunate that she enthusiastically agreed to work with me.

What is a Happiness Spreadsheet?
It’s a budgeting tool that guides and inspires the reader to figure out what is most important to them – experiences, things, people, causes, beliefs and goals – and then to apportion their resources (money and time) so that they can bring more of those things into their lives. Most of the women attending the workshop had done budgeting of one kind or another, but no one had ever thought to connect their budget with their values.

For example, if you love travel, what does that say about you? Perhaps that you thrive on adventure, excitement, or unpredictability. If you are a home-body, you may crave stability, safety and familiarity. If you value sustainability, you want to eat foods grown organically and locally or consume less and recycle more. Or if you desire more leisure in your life, you may want to hire more service providers to give yourself more time. Whatever it is, the better you know yourself, the more likely it is you will focus on your happiness triggers and bring more of them into your life. In our busy lives, we often just “do” and don’t spend much time thinking about “why” and then wonder why our lives feel stalled or unsatisfying. Or, we end up spending our scarce resources on things that don’t matter that much to us.

When the ladies were asked why they signed up for the workshop and what they wanted to get out of it, these were some of the replies:

“I’ve been giving a lot of myself to others for a long time now, and I want to focus on myself. I’ve forgotten what I want most out of life.”

“I’m going through some major transitions right now and I want to decide on my next move with thought and care. I thought this workshop would help.”

“As I get older, I find that I want to spend my time and money more consciously and stop frittering it away on things that aren’t that important to me.”

“I spend so much time at work and recovering from work that I don’t think about where I want to spend my time and money. I have the resources, I just don’t know how to best use them.”

The Happiness Spreadsheet Workshop Vision Artwork
The Happiness Spreadsheet Workshop Vision Artwork

I think it was unanimous that the favorite exercise involved  painting. Not with a brush but with credit cards! Tamara had each woman sprinkle three large sheets of paper with several colors of  paint and then using the edge of a credit card, scrape the paint across the page. This technique created the most wonderful art and then the sheets were used as the base for vision-boards. I can’t think of a better use for a credit card, can you? One of the numbers-based exercises consisted of allocating $2500  amongst a list of different things or experiences  – a real-life experience that we all do but perhaps not as consciously as we should.

At the end of the workshop each participant was asked to do a “show and tell” of their vision artwork. This was fun and inspiring. See a few clips below.

The Happiness Spreadsheet Workshop Vision Artwork
The Happiness Spreadsheet Workshop Vision Artwork

Tamara and I are  planning our next workshop on June 23rd in San Anselmo, California. If you would like to attend, email me at cathy@curtisfinancialplanning.com for details.

Tell me: Just how happy do you want to become?

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