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3 Tips for Better Spending in a Magical New Year

January 5, 2016

Happy New Year, you guys!

I am really grateful for new starts and clean slates and new planners. Yes, paper planners do still indeed exist and people (even some tech-savvy ones) still use them. Mine is a gorgeous one of Ireland:) I can’t let a new year start without making a plug and joining the conversation around budgeting. My email inbox has received some great tips from my friends Dave Ramsey and Jesse Mecham (founder of YNAB). So maybe they don’t know we’re friends but we are and they have some great advice. And it’s reinvigorated me so here’s hoping my tips will give you a little boost if you’re looking for one. And if you’re not, well, I don’t know what to say.

Anywho…! Here are a couple or few (which one should I be using, Jess?) New Year’s tips for better spending:

  • Don’t budget what you wish; be real. Don’t budget what you would like to spend on [groceries, gas, gifts, household expenses, membership fees, utilities] on a perfect month with perfect discipline and no unexpected happenings. Those months don’t happen very often:) Budget as generously as you can afford for all your categories. A book I read last year talked about how people perpetually underestimate the time a task will take to complete. Budgeting was no different for me and is something I still could do better on; I consistently underestimated how much I would need to or end up spending on many categories and now I frequently underestimate how much I will actually spend on the Groceries category particularly. Once you have some months of actual spending data to review to get your actual averages, you can budget accordingly, until then, set yourself up for success with as much of a buffer as you can afford. Within reason, people. Don’t give yourself a budget of 3x what you think you’ll need for Groceries since that not only doesn’t equal reality, it also sets you up for gross overspending and an overinflation of “real”.
  • Stop making excuses for the past and find a solution/get a tool. This is actually kind of empowering. If you’re willing to stop justifying why you’ve failed in the past and instead take a holistic, what-did-not-work approach (with an eye toward being willing to change it), you’ve taken a huge leap forward. In retrospect, I find it kind of funny how surprised I was month after month that I had spent all my money or sometimes more money than I owned. I justified my behaviors with reassuring phrases like “I’ve already tried several (in reality, a couple) budgeting tools and they just don’t work for me.” Or “It’s just not feasible to track every expense.” Or “No budgeting app allows for splitting transactions or variable income or…or…or…like I need it to.” Just because you’ve tried a couple solutions or failed in the past does not mean ALL tools are dumb or won’t work for you or that you are the one person on the planet whose situation is so complex to not fit into a tool. As you know, I ADORE YNAB. Love it. As in I tell perfect strangers about my love of it. But I’m sure there are other tools out there that work pretty well too:) ACE, Mint, Quicken, EveryDollar are a couple others I’m familiar with but I would recommend you pick one and stay with it. But I would not be even a tiny bit sad if you chose YNAB and neither would you. Sheesh, I write as if YNAB was paying me for this or even knew I and this blog existed. They don’t, but maybe one day…a girl can hope…
  • Identify why you want your relationship with spending to be different. What do you want to buy or save up for or where do you want to travel and what do you want to be able to do with better-managed money? I bet you don’t have to think too hard about this: pay tuition for kids’ private school, pay off the house faster (and save tens if not hundreds of thousands of dollars), upgrade your house to something more size-appropriate, take the trip to [fill in the blank] you’ve always wanted to, have career flexibility, be able to take care of people you love, be able to help people you don’t love (just kidding, just people you don’t know yet – refugees, homeless, struggling single-parents), pay cash for a reliable vehicle, have fewer fights with yourself and/or a spouse about money, be able to afford that exotic new aquarium you’ve been eying (this one is definitely NOT one of my why’s but it sure could be yours!) And then remember that why often – post it somewhere you’ll see it often, tell people about it, attach specific goals, timelines, and milestones and categories within the budget to it. I can’t tell you how much identifying my principle “why” (become debt-free), establishing timelines (by X month pay off Debt #1, etc.), and committing to a budgeting tool (versus my own Excel spreadsheets) has helped improve my spending and my enjoyment of the spending I do! Call me anytime and I’ll wax verbose about it:)

Hope this is helpful to some of yous! I love getting mail and I love helping people get onboard with budgeting – drop me a line if I can provide some advice or motivation or encouragement that you, yes even you, can do this! Your spending and overall quality of life CAN truly change this year, I know it! And I hope to help you know it too, whether you use a paper planner or not.

Wishing you your best year yet,

Emily