What are some tips you can provide me for sticking to a strict budget and avoiding the temptation to spend?
December 30, 2011 11:22 AM   Subscribe

What are some tips you can provide me for sticking to a strict budget and avoiding the temptation to spend?

I'm on the home stretch of paying off my credit card debt- yay! According to my new debt payment calculation plan, I plan to be completely debt-free by mid-March. I am really serious about paying this off in full and staying that way. Ultimately, I am hoping to move from debt to some serious saving this year. I already have a good credit rating, but I know there are better habits I can learn.

I've made sure to leave myself some wiggle room for the ever-present bills and unexpected expenses. What I need help with is avoiding temptation to spend, particularly during this time when I'm getting myself out of the hole. In the past, I have become overwhelmed by my debt to the point that I feel it'll never end, and I end up just piling more debt on top of myself. Now that I've been making some sincere efforts to pay this off, I'm getting close and I don't want to become frustrated by how slowly the process is. What are some tips you can offer to help me stay on track? What are some healthy saving habits I can teach myself? I was never brought up with good advice in this area, so anything you can suggest will be sincerely appreciated.
posted by chatelaine to Work & Money (24 answers total) 31 users marked this as a favorite
 
Good for you for doing this. Stick with it.

Any austerity program needs a reward system. While you're in the middle of it, set a goal for 30/60/90 days out and reward your good behavior with a treat. Then you can start looking forward to the treat instead of dreading the grind. It may only be a spoonful of honey on your brown rice for now, but think about what you can do when you get to your destination.
posted by halfbuckaroo at 11:33 AM on December 30, 2011 [1 favorite]


Allow yourself a fix amount of spending per week. Depending of your finances, it could be 15, 25, 40$, your budget should help you decide how much. Take that much money out of the bank every week and from now on you can only use that for 'non-necessity spending'. If you want something that cost more, you stop spending for x weeks until you saved enough for it.

As for tips for saving, well it only applies when you're done with debts, but any extra income I get goes to my savings account, in an automatic transfer I set up online. For example, when I was I done with my car payments, the same amount that used to go to my car loan started being transferred to my savings account. I was already used to not having that money anyway!
posted by domi_p at 11:34 AM on December 30, 2011 [3 favorites]


I wasn't taught much about saving or budgeting when I was growing up either, but my grandmother taught me to "Pay yourself first", meaning that savings is the first thing you should do beyond anything else. Make it automatic, and shove it in an acccount that is relatively inaccessible to avoid temptation. As an example of what I do, every 2 weeks $50 is moved from my checking account to a savings account at ING, which takes a couple days to request money from (removing the temptation to spend it). Great websites for learning move about saving and budgeting are Get Rich Slowly, and the earlier stuff from The Simple Dollar. Good luck!
posted by snowysoul at 11:34 AM on December 30, 2011 [2 favorites]


Accounts at two different banks. I have my bill account at a major bank, and my savings at a local CU. I would have to physically go to my CU to withdraw money, so this works with my natural laziness. I don't touch that money unless I really need to, since it is inconvenient to make a trip to that bank.

I keep less than $20 in cash in my wallet. I pay credit card off every month, and only use it if I have the cash to pay for something outright anyways.
posted by shinyshiny at 11:37 AM on December 30, 2011 [1 favorite]


Sticking to a strict budget is like being on a super calorie-restrictive diet. You're bound to crash and burn with frustration if you don't let yourself splurge a little bit. So, let yourself have a little treat every week, even if it's just $10, to make yourself feel like you're still living a little. For $10 you could go out for a nice dessert at a restaurant or go to a movie every week! Or you could save it for every other week and get a manicure. When you're on a tight budget, going to a movie a week might be just the thing to make yourself feel like you're actually rich.

I know it seems counter-intuitive, but you really can't make yourself save every single penny you have without making yourself miserable. Plus, $10 a week is only ~$40 a month, which isn't going to break the bank in the long run.
posted by joan_holloway at 11:39 AM on December 30, 2011 [5 favorites]


What do you spend needlessly on? And when? Avoiding those situations can help. I stay off of Amazon and other shopping sites, and toss catalogs in the trash as soon as I can. I don't go to the mall.

Actually, the biggest factor that helped me was learning to buy used. Once I figured out how cheap stuff was from second hand stores and off Craigslist, it was really hard to pay full retail for anything.

The other principle that helped was thinking about cost-utility. If it's something you use all the time, then paying a little more for a higher quality item is actually worth it. I work on my computer 8-12 hours a day, so it's reasonable to spend a bit more for something that's useable or reliable. Divide the cost of an item by the amount you use it or the usefulness you get out of it. Sometimes spending more up front means you spend less in the long term.

Make saving automagic. My paycheck is direct deposited into my checking account. I have it set up so that $200 is automatically transferred into my savings account each month. The amount, of course, depends on you, but it's easy and you don't have to think about it. I end up with $2400 in savings each year. It adds up over time.
posted by Mercaptan at 11:41 AM on December 30, 2011


I've taken to keeping a Google docs spreadsheet of things I think I ABSOLUTELY CANNOT LIVE WITHOUT. I record the date I realize that my life is incomplete without XYZ, and then pros and cons of buying, and the price.

So:
New MacBook--$1600 12/10/11

Pros: Would allow me to work on my photos and music when I'm not at home; old laptop is from 2006 and really not up to snuff.

Cons: Expensive. Don't use the old laptop much anyway. Heavy. New models coming soon.

Seeing the pros and cons in black and white really helps me sanity check a purchase. Once I've done that, I resolve that I can't make any further decisions for, say, two weeks.

Usually by the time I've done the pros and cons, waited two weeks, and then come back to the list, the insatiable urge to buy whatever it is has passed.
posted by Admiral Haddock at 11:43 AM on December 30, 2011 [5 favorites]


Replace your credit cards with debit cards.

Automate your bill payment so the things that must be paid automatically come out of your accounts.

Make one automatic deduction be some sort of savings, ideally to a 401k up the employer's matching amount.

Whenever you get a raise, apply 75% of it to your financial goal, whether that is paying off debt or investing.

Whenever you pay off one debt, apply all of that amount that you had been paying to the next debt. I'm assuming you're paying off higher interest debts first if you have multiple debts.
posted by MoonOrb at 11:43 AM on December 30, 2011


Spending on non-essentials always has an emotional component to it. Work out what it is for you and address those needs some other way, and then your budget will stick.
posted by MT at 11:45 AM on December 30, 2011 [1 favorite]


Make saving automagic. My paycheck is direct deposited into my checking account. I have it set up so that $200 is automatically transferred into my savings account each month. The amount, of course, depends on you, but it's easy and you don't have to think about it. I end up with $2400 in savings each year. It adds up over time.

Seconding this. If it's not in your bank account, you won't spend it. If you're looking for a figure to save -- you know how much money you're spending towards your debt every month? Well, you already know you can afford to have that much removed from your account every month, so -- that much (meaning, if you're paying $100 a month towards your debt now, once the debt's paid off, then start making $100 a month automatic transfers towards that new savings account).

Or try this -- CREATE a savings account that is expressly FOR fun stuff. One of my best friends told me about what she called the "I'm Worth It Fund" -- she has a regular savings account, but she also has this second savings account, and a portion of all her paychecks go into that account as well. And that second savings account is exclusively for fun stuff -- fun clothes, dinners out, fancy chocolate just because, vacations, etc. The genius of that is -- if you try to cut down TOO much on the enjoying-yourself spending, you'll feel awful and depressed and the temptation to spend will get too big and you have a bigger chance of blowing it. But if you specifically set aside some money specifically FOR frivolous spending, then a) it'll be there to spend if you want to play around, and b) there's a natural limit to it, so you can't go too nuts.

So once you've finished paying off your debt, try getting two savings accounts, and then figure out how much you were paying towards your debt each month; then figure out how much of that amount you want to go into "grownup" savings and how much you want to go into the "I'm Worth It Fund," and then set it up so your bank automatically transfers money into those accounts on a regular basis.
posted by EmpressCallipygos at 12:00 PM on December 30, 2011 [3 favorites]


I make myself use cash for all non-planned non-mandatory spending. So utility bills, gasoline, groceries, etc., are still paid for with plastic, as is non-mandatory stuff I budget and plan for over time like a vacation. But daily incidentals are cash only.

These days that means I take out $40 every Wednesday. If there's money left over at the end of the week I put it aside and take out another $40 -- put aside enough over several weeks and I can splurge on a night out or something big and unexpected and fun. If I run out before the week is over and I forget to bring a lunch to work or something then I can draw from past weeks' unspent cash or just go without. When I was on a tighter budget I took out less in cash.

I find that cash is a great motivator, as long as you're realistic about what you can live on. When I tried to get by on $10 a week, that was so little that if I didn't have enough money to handle an unexpected expense -- coffee with a friend, forgotten lunch, etc. -- I'd just charge it, which defeated the purpose.

With $40, I have a visual, tangible feel for how much of a dent a cup of coffee or a beer after work puts a dent in my cash flow. I take fewer workday Starbucks trips and make fewer vending machine visits, and remember to bring my lunch more, because it's obvious that doing this allows me to see a movie or eat out or get drinks one or two times a week. And every time I finish a week with cash left over -- even if it's just $1 -- I feel like I've won some kind of contest. It's exciting to have that tangible reward and see last week's extra $6 and this week's extra $1 very quickly build up so that I have a whole extra week's worth of cash available, and then more, as time goes by. When I feel a need to splurge, the money is there.
posted by croutonsupafreak at 12:00 PM on December 30, 2011 [6 favorites]


I should note: There are some daily incidentals that you can't buy with cash -- a digital song, a Kindle book, etc. With this, I either deposit the amount I spent back in my bank, or make note of the spending and don't take that much out next week. For bigger purchases that I save up for, I have to have enough cash to justify the acquisition before clicking "buy now," and then I do put the money in the bank.
posted by croutonsupafreak at 12:08 PM on December 30, 2011


Don't carry credit cards. Carry a limited amount of cash, or limited access to cash.

It's a little silly but an app like EpicWin might be fun - you could set goals such as "don't go to DSW - 50 points" "spend less than $10 - 100 points". It's really silly but getting loot for meeting my more mundane goals makes me more interested in them.

It also helps when you can make an enjoyable challenge of your goal. Baloney sandwiches for a week? Blah. A tasty casserole you invented yourself, of lentils, bulgar, kale and yams? Frugal points AND creative genius points, BOOYAH!

Good luck! :) I need to get back on this wagon myself.
posted by bunderful at 12:10 PM on December 30, 2011


Write down all of your recent purchases, and put some sort of little mark next to those that fall into the category of spending that you think should be curbed. Think about (maybe even write) why you purchased these things in the first place.

Get a Paypal account, and put some pre-budgeted amount of money in it. Do not associate it with a credit card, and only use Paypal, not credit cards, for online purchases. From now on, credit cards are for specific things that can't be done with cash (or Paypal, or whatever), or perhaps for emergencies (from a pre-made list of what you consider to be emergencies). I have a credit card which is for airline tickets or for use in countries where my ATM card won't work only. This is an ironclad rule, and works pretty well; I don't consider it to be part of my financial arsenal, and I write a check to the lender as soon as I use it.

Make a list of what you consider legitimate reasons for taking on debt. It should be short and consist of relatively apocalyptic stuff. The prevailing attitude that personal spending, beyond one's immediate means, is okay or even part of some larger economic good, is rubbish.

Also, switch to a web browser that allows you to block ads, somehow. Be as distracted as is safe when out and about (book on public transport, etc) to avoid consuming ads. Don't watch TV; stream the shows you like. If your credit card debt has to do with anything that smells, on honest reflection, like conspicuous consumption, or seems related to buying things for the novelty of buying a thing, rather than for the utility of the thing itself, then probably a fundamental shift in attitude will be of more long-term help than some little hacks or whatever.

I think basically that "the temptation to spend" is in the same category as the temptation to abuse substances is, for a person who abuses substances. I don't have experience with the former, but I do with the latter. Basically, you need, frequently and honestly, to remind yourself of the negative consequences of pathological spending, and force yourself to list what you consider the positive consequences to be. If you're having an honest day, this list is going to be short.

Also, if competitiveness comes naturally to you, then use this to your advantage, by remembering that you live in a society whose consumer attitudes are deeply fucked up. There's no shame in adopting a self-righteous attitude about not being taken in by advertising or the desire to keep up with random Joneses, or whatever, if that attitude saves you from debt-stress.
posted by kengraham at 12:32 PM on December 30, 2011 [1 favorite]


Even Dave Ramsay says to budget some blow money.
posted by St. Alia of the Bunnies at 12:36 PM on December 30, 2011


Here's four steps to discourage use of your credit cards.

Step 1) Get a bowl

Step 2) Put credit cards in bowl, try to have them facing downwards

Step 3) Fill bowl with water

Step 4) Put bowl in freezer

This is great at preventing spur-of-the-moment credit card splurges.
posted by jchaw at 1:05 PM on December 30, 2011


I have never been the kind of person who writes

I have an Excel spreadsheet that shows all of my fixed/recurring expenses. Once I take a percentage out for savings (10 to 20 percent), I know how much disposable income I have for every day/week/month.

I stopped using credit cards. Everything comes from my chequing account and savings.

Put a time delay on major purchases. If I want a new toy, I sit on it for a few weeks.
posted by futureisunwritten at 4:32 PM on December 30, 2011


Oops, first sentence got cut off somehow. Should read: I have never been the kind of person who writes down all their expenses or counts every last penny but I have managed to save a bit of money in the last couple of years.
posted by futureisunwritten at 4:36 PM on December 30, 2011


I spend almost nothing on non-essentials. My mindset is that I can always buy [whatever] tomorrow instead. So I wait. And then the next day I often don't want it after all. Or the next day I tell myself I'll buy it tomorrow. And then tomorrow the same thing. This only works if you can resist the way shops try to make you believe that their items are scarce or for a limited time only, or on a super sale price that will never be seen again. But once you've waited a few weeks or months, you'll see that actually the thing is still around, and maybe even at a better price than before. This eventually leads to the mindset that you can wait until you absolutely need to have that item before you buy it, because it will always be there for you to buy later.

So, for example, I took 10 years to buy an iron, because I had almost no clothes that needed one, and it was that long before the need to iron something became more pressing (ha!) than the effort to go to a shop and get one. (I still haven't bought an ironing board, though.)

I don't actually have any clothes nice enough to wear to a fancy restaurant or a wedding, or whatever, because I haven't been to one in a few years. When I get invited to a fancy event, I'll go shopping then.

I've been wanting a sewing machine for years, because of all the things I might sew. But it's only now that I have a house that needs curtains (in order to save money on heating bills) that I will really buy one, because it will be cheaper to sew curtains, even including the cost of the sewing machine, than to buy ready-made ones. And I haven't bought the thing yet, because it's summer now, and I won't need the curtains until winter. And who knows, by winter, maybe some random person will have given me an old sewing machine, or curtains, or my house might have burned down and I won't need them after all :)

Recently my backpack tore quite badly, and I needed a new one. But I put it off for weeks until it got to just before an overseas trip and I had no choice. And on the day I was finally going out to buy a new one, a friend told me a friend of theirs was moving away and had some stuff to get rid of, if I wanted anything. And among the free stuff was a nearly brand new backpack.

Once a few serendipitous coincidences like this have occurred to you, you'll feel more of an incentive to delay buying things, because of what might happen in the meanwhile (and because your money is earning interest (or negating interest you would otherwise be charged on your credit card or a loan). So you only need sheer willpower the first few months of trying the delaying approach.
posted by lollusc at 5:20 PM on December 30, 2011 [3 favorites]


I'm in a similar situation at the moment (ugh!), and I think it's important to let yourself spend a little. When I've been too strict, my entire budget goes by the wayside. Treating yourself occasionally makes saving easier.

I've also saved my credit cards for essential, monthly expenses (i.e., car insurance). I'm not getting rid of my credit cards, but I'm not getting into any more debt.
posted by ablazingsaddle at 7:15 PM on December 30, 2011


Work off every expenditure. Set a rather low hourly rate and once you spend a chunk of money on something, write down the amount and work on some challenging personal project, or do yoga or something like that until the expense is "paid off" at that low hourly rate. If you still feel you're spending too much, adjust hourly rate downwards.
posted by rainy at 8:48 PM on December 30, 2011


I write down EVERYTHING that me and mr. pony spend. We are constantly shocked about how little we FELT we'd spent (£20), and how much we actually had spent. (£60) and I try to use the "look after the pennies and the pounds look after themselves" strategy... I go out of my way to spend as little as possible on essentials like coffee, shampoo, deodorant, laundry soap, and all those little savings go a long long way.... I also know our weaknesses- I freeze stuff so that a nice meal is never a problem and that cuts down on take-aways when we're tired, always have a bit of ham in the fridge so that Mr. Pony doesn't go shopping hungry (disaster!)

Finally, I try to treat money like i do food... if I know I've spent or ate a bit to much in the last few days, I take it easy as long as I need to!
posted by misspony at 4:59 AM on December 31, 2011 [1 favorite]


1. Figure out how much you can spend each month after paying for essentials and your savings. I call that my discretionary fund.

2. Everything non-essential comes out of that fund. Keep a running total so you don't run out before the end of the month.

3. When you want to make a discretionary purchase, don't buy it right away but put it on a list. Of course some things are too small to delay, like a cup of coffee. I guess anything over $10 goes on my list. The list will probably have more stuff in it than you can pay for.

4. Around the end of the month, pick the items on the list that you will buy. Or maybe don't spend the whole amount this month because you need to save up for a larger purchase next month.

5. Start over each month.
posted by conrad53 at 9:59 AM on December 31, 2011


Stay focused by always having everything in front of you: make wall charts to show how much debt you still have on various things and how much money you have in various other things.

Keep this simple stuff, where one axis is the date and the other axis is the amount. Use colored pens or pencils. Every day (or week or month), make a new data point on each of your charts and connect the line from the previous point.

Make a little ritual of adding a new data point, connecting the dots, and standing back to gaze at your progress. It takes just a few seconds a day.
posted by pracowity at 2:08 PM on December 31, 2011 [1 favorite]


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