You started January with the rock solid intention of getting your financial ducks in a row. You took a deep courageous breath, dived head first into your unopened bank and credit card statements, and got deeply intimate with your numbers. You trudged through some shame and disappointment about your past spending indiscretions and chastised yourself for not putting savings aside and paying down debts, despite the fact you actually earn a pretty decent salary. You emerged victorious with a plan, a budget to get your finances on track. Full of positivity, hope and motivated you headed back to work on January 6th with a packed lunch tucked in your handbag, having left your credit card on your night stand. But 10 days later you were back to your old spending habits and desperate for pay day to come around. Does this sound like you?[blockquote_left] [themecolor]”Yep, me too.”[/themecolor] [/blockquote_left] Only I’m going back a few years to a time when I was in a horrible amount of personal debt, making very little money and living decidedly beyond my means. Fast forward five years and I’m a blissfully debt free homeowner, with savings in the bank and a baby on the way – all things I thought were out of my financial reach just a few years ago.
Now I work as a money coach and mentor for women who feel like there’s just too much month left at the end of their money. Everything I teach I’ve learnt the hard way – first hand.
So, want to know why your budget isn’t working?
1) You’ve gone naught to sixty.
Adjusting your spending habits, and with that your lifestyle, takes some getting used to. Whilst a cold turkey approach works for some, for most of us its a misery maker. Humans are naturally programmed creatures of habit therefore turning our lives inside out over night hurts. It can take a little time to discover just exactly where and how savings can be made most effectively.
[themecolor]The solution: [/themecolor] Pay close attention to the small daily choices you’re making and how they affect your ability to stick to your spending goals. Overspending on food? For example, is hitting the snooze button three times costing you breakfast at home every morning? There’s £25-£30 a week right there. Is failing to plan an evening meal leading you to grab take-out on the way home? That’s easily £10 a pop. Focus on your behaviours and your small daily choices to bring your spending in line.
2) You’ve set the bar way too high.
Most budgets fail in the first month because they’re too darned strict and offer no wiggle room whatsoever. Whilst its admirable that you plan to load 35% of your income into debt payments or savings, how sustainable is this tactic really? Chances are you’ll wind up going overdrawn or feeling demoralised, having pulled money back out of savings to supplement the meagre budget you left yourself with. Don’t get me wrong, there will be some folk out there with willpower and bloody minded discipline to stick to a super tough budget by hook or by crook, but for the most of us, we need a little bit of leeway.
[themecolor]The solution: [/themecolor] Adjust the amounts you allocate to debt payments and savings to a level you feel is comfortable and achievable for you to maintain. Stay mindful about what you spend and if at the end of the month you’ve a little left over, add it to savings and start the new month afresh.
3) You’re budget doesn’t exist in a vacuum.
Put simply, life can get in the way of your goals. This is true of every goal. Things happen. We are, after all, women working through various transitions in our respective lives, be that career change, relocation, becoming parents…the list goes on. You can’t possibly foresee every eventuality when you set a budget; you largely bank on all things remaining equal.
[themecolor]The solution: [/themecolor]Build regular money dates into your monthly schedule. It might only be an hour, but it should be dedicated time to review the progress you’ve made against your goals, any changes you need to make to bring your budget back into line, and anything new you need to incorporate into you budget for future.
If you’re keen to get your financial ducks in a row in 2014 then you should absolutely hop on over to www.moneymoxie.co.uk and subscribe to my weekly newsletter.
With much love and a raised glass to your new and improved budget!
Hattie Brazeley is the creator of Money Moxie and a coach and mentor for women who want to feel in control of their finances, rather than feeling their finances control them.
With over ten years experience working with young professionals as a coach, facilitator and trainer, she now delivers coaching programmes to women looking to make big changes in their financial futures.
Her writing has been featured on Your Super Awesome Life, Career Shifters and Enter: Adulthood.
Find out how to set clear financial goals and hold yourself accountable at www.moneymoxie.co.uk[/themecolor]