Organize Your Money: 3 Ways to Stick to Your Plan
It’s January and time to get life organized. This week I’m sharing some simple ideas to help you organize your money. Click here to see all the posts in this series.
One thing that I have discovered is that in order to live intentionally, we need to have vision for our life and a plan for reaching that vision. The plan does no good, however, if we don’t follow it. Having a vague thought that “someday” we want to take a trip to Italy doesn’t mean that we will actually be able to get there. We have to integrate the steps in our plan into the way we live our everyday lives.
Ideas that are “out there” in the future have to be brought into the present by our daily actions. The future doesn’t just arrive. We build it day by day.
If you have a financial goal you want to accomplish, try these three practical tools to help you stick to your plan:
Monitor Your Mindset
The first tool that you can use to help you stick to your plan is to monitor how you think about money. It’s easy to form a mindset of deprivation when you realize that you can’t spend money on whatever you want in the moment, and still meet your financial goals. One way that we combat this deprivation mindset is to avoid thinking about everything we are missing out on or feeling trapped because we are forced to give up something we want. Instead we empower ourselves by focusing on the fact that our short-term sacrifice is enabling us to meet long-term goals.
Sure it would be nice to spend those few extra dollars to eat out tonight, but if we save them we will be able to meet more important objectives which will bring financial freedom to our family and enable us to do more things that we want to do later. If we manage the amount of money that we have right now (no matter how big or small it seems) in the best way we can, we feel a sense of excitement about the future, because we see the power of a little bit of money used well.
If you are feeling deprived or restricted, you can read more about changing your money mindset here.
Dedicate a Savings Location
Once you have made the decision to direct your money in specific ways rather than letting it slip through your fingers, you will be much more likely to stick with the plan if you have somewhere specific to save the money. You can use an envelope in a safe location in your home, a special savings account or a second checking account.
Along with your savings destination, you need a method to track the money you are putting aside. Some people use a phone app, some use an Excel spreadsheet and others make a thermometer graph that they post on the fridge. The important thing is to find a way to watch your money growing so that you can be motivated by your progress.
Plan Your Spending
Now that you have the specific goal in mind that you want to accomplish, and you have a place to put the money, you need to make a specific spending plan for your paycheck each pay period.
Our family uses a combination of cash and checking accounts to meet our goals. Every pay day I have a morning appointment with myself and the checkbook when I do the following:
- On a sheet of paper in my Brain in a Binder, I write down the amount of my husband’s paycheck deposit.
- I subtract our grocery, household, date and gas money plus a $20 cushion, and leave that amount in the primary account.
- I transfer the remainder of the money into our second account and divide it into the categories on our spreadsheet (read more here). This money is used to pay monthly bills and irregular expenses like medical needs, clothing, car insurance premiums, etc..
- Any additional money we make above the designated amounts for each category in this second account goes into our savings account to meet our current savings goals.
- On my shopping day, I take the grocery, household and date money for the week out in cash.
- I place the money in individual envelopes in my wallet for each category so I know exactly how much I have to spend and I try to never borrow money from one envelope to pay for something in another category.
You probably won’t do things exactly the way we do, but by using these three tools you can stick to your plan to spend wisely, save diligently and give generously and meet your financial goals.
What systems and tools do you use to stick with your financial plans? Leave a comment.
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