Persistence in Budgeting... and Life
I am a lifelong Weight Watcher - a returning champion. Rather than think of myself as of having failed, gained weight back, and landed myself back in weekly meetings, I prefer to see myself as persistent.
One of the keys to losing weight on the Weight Watchers program is to track your food daily. This creates an awareness of what's actually going into my mouth and migrating down to my thighs. From awareness grows empowerment. The empowerment comes from being able to assess my choices, and then stop myself and make better choices. It isn't always easy- if it was I would be a size two. But while I'm far from perfect, I've also not allowed myself to slip to a size twenty-four.
So what does this have to do with finances?
Isn't this a financial post? In his book "The Compound Effect," Darren Hardy coaches us that if we want to change something in our lives, we need to write it down and track it. With all my Weight Watchers experience, I knew I would be a pro at this. My husband and I talk about money, and religiously balance the checkbook, but I didn't think we had a good day to day handle on what we were really spending when he was swiping one debit card and me another. Everything was reactive and not proactive.
So, we each downloaded an app called Goodbudget. The free version that we use allows us both to input our costs for our most basic expenses and see where we stand for the month. What was our first big surprise? We budgeted $50 per month for alcohol. He took one trip to the store and came home with a handle of Vodka for me (I swear this really will last me the summer) and some of that fancy beer he drinks for him. The grand total was around $45.
Here's where it gets interesting.
He put the receipt into the app and then said looks like I don't get to go back to the liquor store till next month. Had we not been tracking, he would have been back at the liquor store within the week. Let's be clear, he is not in danger of running out of alcohol. We do have a budget for random items, so he could have put the next receipt in that category, but at the same time, he would have been outside what we agreed to work on as a couple. So did we fight over this? Nope. He self-corrected because he knew where we were in relation to our monthly budget. Even with balancing the checkbook, we didn't have the same level of awareness for what we were spending in many areas of our life because we weren't proactive about it. Now we do. We don't track everything we do, only the items we are swiping the debit cards for.
Think this could work for you? Why not try it. At worst, you can always go back to not tracking.
Cecelia Beach Brown CFP® is an Annapolis-based financial advisor who is dedicated to assisting her clients through celebratory (retirement, college planning) and difficult (loss of spouse, job loss) moments. She also works extensively with Lincoln Financial Securities to help develop companywide initiatives around Dynamic Financial Planning. CLICK HERE for more about Cecelia and to schedule an appointment.