I encounter many clients who see a budget as a shackle, a task master, an inconvenience. Whether created for time or financial a budget provides a guideline and target to help you monitor what you do. The resistance to setting these goals threatens your ability to track and adjust your monthly spending habits. It is the source of that “where did my money go” feeling.
I continue this fundamental financial literacy series with a third point. The first point suggested that you budget fun and leisure. The second point suggested that you schedule time and pay your bills twice per month. The third point counsels you to limit your shopping, eating out (even for lunch), and other expenses to a specified amount per month. This is the target behavior. Improving your shopping IQ supports the behavior. I offer 3 lessons.
1. Shop for groceries only 2 times per month. Shopping multiple times each week seems to be the common mistake for many attempting to stay within the guard rails of a budgeted amount. Sure, you budgeted for grocery shopping and made the trip. But, you forgot milk. You went back and spent $50 extra. Or, not wanting to risk the “walmart vortex”–where you intend to get milk and spend $50–you stop at a convenience store and pay 1.3 times what you would have paid at the grocery store. While there, you also pick up a coke or a slurpee because you deserve a treat. These are the subtle ways that money escapes your intentional use. I suggest that you stay away. If you forgot milk, brainstorm other options. Discipline yourself to do without if items are used or forgotten prior to the next shopping trip. You may consider that milk is the best option, and return to the store. But, you will arrive at the store with a clearer mandate and reasoned approach that may resist impulse buying.
2. Create an additional “staple” list. It is common knowledge that a grocery list reigns in impulse buying and reduces spending while ensuring that what is needed is purchased. Lists can be applied to every shopping situation to help reduce expenditures. I suggest that you also create a list each month that includes snacks and comfort food, pick-me-ups, and “treat me” purchases that you like to make. Be honest with yourself about the purchases that you cannot do without. Seek was to compromise realizing the emotional and
3. Prepare a spending plan that covers a two-week period. In addition to your monthly budget, forecast what you plan to spend specifically on non-bills for each two-week period. This includes lunch or eating out, tips, donations, and money for panhandlers. Include pick-me-ups, gifts, and loans. Again, the goal is to become more aware of your spending–to help you see the destinations of your money.