The idea of having a rock-solid budget seems great. You love the idea of being in control of your own money, knowing exactly how much you have to spend on fun stuff, and having a savings plan. You understand that in order to get ahead you need to take control of your finances.
So why is it that every time you try to do up a budget, you inevitably just end up ignoring it and reverting to old habits?
You don’t like feeling deprived
Once you’ve set spending limits on yourself, you feel like you are being deprived, restricted, or that money is a scarcity. What impact does this have on you psychologically? It turns out that whenever you are told you can’t have something, do something, or experience something – whether this is from yourself or somebody else – you just want it even more!
Ever told yourself you weren’t allowed junk food? How long did you last before you experienced massive cravings for a big packet of chips? Alternatively- ever had a pantry packed full of chocolate after Easter or Christmas, and then found that the last thing you wanted to eat was chocolate?
The more we feel we can’t have something the more we want it. So what’s a quick trick to overcome this and help you stay on track with your spending? Keep a $100 note in your purse or wallet – if there’s something you really really want you to know that you have the money to buy it, but you might find that you don’t want to as much or that the thought of physically handing over that banknote makes your purchase seem less appealing.
If you do spend it, it’s because you know that you really wanted it, and it’s not that you were making an impulsive purchase out of a sense of deprivation.
You feel comfortable with what is familiar
We all enjoy things that feel familiar to us, but sometimes we give up great opportunities in order to feel comfortable. Ever tossed up whether to go to a social function with people you didn’t know well, or just stay at home on the couch? Did you end up going and then met someone interesting, formed an important social connection, learned something new, or just really enjoyed yourself? Wouldn’t have happened if you had stayed in your comfort zone.
If living paycheque to paycheque feels familiar to you, then saving your money, investing your money, controlling your spending, or working overtime may feel unfamiliar or uncomfortable. We have a tendency to be wary of situations that are unfamiliar. So if consciously you would love to manage your money better, and can’t figure out why you keep sabotaging yourself you might need to work towards making the unfamiliar feel more familiar.
Start slow instead of changing everything at once. Start with looking at your finances weekly, build up to managing your spending money, then work towards understanding investment and saving before taking any action. By the time you are ready to put your money into stocks, shares, property, or even just a high-interest bank account you’ll know you are making an informed decision.
You have a fear of money
If your immediate reaction is to scoff and think “there’s no way I have a fear of money I would love to win the lotto!” … take a second to re-evaluate that. Do you feel that people who are rich are arrogant, snobbish, take advantage of people, are rude, superficial, or treat others badly?
What’s the likelihood of you becoming financially successful if doing so would run the risk of making you like that? While you might think you would love to have money, if you find ways to spend extra money so that no matter what you end up back at the same place, you may have a block towards becoming more wealthy.
How to tackle this? Reframe how you view wealth. If your new beliefs are that money is a resource, and that having more gives you a greater capacity to help others, or frees up your time for being a better friend, parent, or lets you be more active in your community, or could be used to help those in need- well that’s just a whole different ballpark.
Maybe you decide that you will donate 2% of your income to charity, or help others in some way. The more you earn, the more you help others. After enough time your mind might just start linking the two, and you’ll feel a greater drive to managing your finances.
What do you think? Do any of these apply to you? We would love to hear your thoughts in the comments!