Your Last Budget

There are a million budgets out there that will help you restrict your spending, but they do not work long term. Like a really restrictive diet, you may be able to make it work for a while, but then you will bust out. It is time to consider budgeting, and money management in general, into a tool instead of thinking of it as money jail.

Your Spending Plan Should Be a Tool, Not a Torture Device

Very few of us think about budgeting when our money situation is good. We start Googling on how to budget when we cannot make a payment or when our credit card is declined. Then we go to spending jail, at least in our heads, and try to function inside an externally imposed budget.

However, tracking a million categories and breaking things down into yearly, quarterly, and monthly fields will eventually make you crazy. You may just give up and bust out, buying something that is both unnecessary and unhealthy. Worse, you may take out a high interest consolidation loan without getting to the root of your spending challenge.

Keep Things Simple: Needs Vs. Wants

Make a list of what you need. For example, your needs will probably include:

  • a place to live
  • transportation
  • food
  • insurance
  • light, water and heat, or utilities
  • internet

Within these categories, you actually have a lot of options to make both big and small adjustments.

HINT: Go for the big stuff. Seriously, why save $25 on food each month when you can save $500 a month by getting a roommate?

Such big changes in your needs vs. wants list could include the aforementioned roommate. You could also

  • sell your car and take a job closer to your home
  • go vegetarian
  • use your phone for internet and give up cable TV

In the winter, wear socks and fleece to stay warmer while you lower the temperature of your home. Keep it above 55 Fahrenheit to protect your pipes. In the summer, remember that fans use less power than your AC.

Create Your Own Framework

Once you have your basic needs listed out and have a fair idea of what they will cost, list the stuff that makes life worth living. That may be gaming, it could be travel, or it might be owning a killer car.

There is nothing wrong with building a spending plan that moves your dreams a little closer. If you really need to fill up your passport with stamps from all over the world and do not need a house full of stuff, find a room to rent and focus on what you want.

Start With a Hard Reset

Because most people looking for money management ideas are doing so because they have hit a bumpy patch, it is a good idea to try a hard spending reset. Do remember that these ideas are short term, and you can certainly pick and choose to build a reset that works best for you and your family.

Start with a Freekend. On Wednesday night, inventory your cupboards and refrigerator to make sure that you will have enough to get you through to next Monday night. Make a detailed list of what you need, and on Thursday, buy it.

From Friday morning to Monday night, spend no money. Have a movie night at home on Friday, or go back and start reading your favorite book series from childhood. Cook something yummy, but no restaurants.

On Saturday and Sunday, pack a picnic and head to a local park. Brew up coffee and hang out on the patio. Go to your local library, or visit a museum on free day, but no spending on events. Clean or declutter as you want, but nothing excessive. Feel free to attend church and tithe if you wish, but go home for lunch. Invite friends over and treat them to something homemade if you like, but no stopping for dessert or liquor.

Why? Because a lot of our spending is on autopilot. We often to not realize what we spent or what we bought with our dollars. A freekend is a terrific reset to make you aware of where your money is going.

Get a Little Radical

Once you have a freekend under your belt, consider a ten day no spend. No spends can also be considered smart spends. If you have to go to a restaurant because you refuse to buy groceries, you know that groceries are a smart spend. Do fuel up your car, but do not drive excessively.

No spend activities require:

  • keeping an eye out for free activities, which gets you more involved with your community
  • being more organized, because you can only buy what is on your list
  • gaining full value from what you already own

Such a decision will take cooperation from the whole family, so be ready to lay the groundwork if you have a partner or children.

Get Something for Nothing

Another handy money management tool is to use the right credit cards. If you love to shop at a particular retailer that offers points, use that card for what you have to buy and put the points to work for you. If you love to travel, use the card that gets you points to an airline that flies out of your city.

If you need to make a big purchase and you have the cash, consider getting a new credit card that offers a big sign up bonus, whether that is miles, points or cash back. For example, say you need a new refrigerator. You have the money set aside because you know your old refrigerator was making some odd noises.

Buy the new refrigerator with the new card, and pay off the balance with the savings when the bill comes. Keep the card open, but do not carry it, and use the points to support your dreams.

Hide the Savings

The term disposable income is extremely misleading. Money is actually one of the few things that grows in a positive way if you can let it sit. However, many of us are really not good at savings.

If you have ever found your assets extremely exposed because you had no savings, you know how frustrating it can be to have someone tell you that you need six months of living expenses in savings. First of all, you may not know how much you really need to survive each month. Secondly, that number could be seriously daunting and make you want to give up.

Start simply. Make an initial goal of $100. You could do a ten day no spend to start. Once you have that nest egg started, take out twenty bucks and go stock up on consumables that constantly clutter up your grocery cart.

Such a stock up could lessen your grocery bill by ten dollars a week, which means that you double your twenty dollar investment in the first month. Having a bit of money in savings makes it possible to stock up on what you would use anyway if you find a great price.

Now, set up an online savings account. Banks like SmartyPig make it easy to save automatically. You can label accounts to encompass your dreams. Even better, you can choose to lose your password so getting money out of these accounts is difficult.

Of course, you can choose to reset your password in the event of an emergency. After all, that is what emergency savings are for. However, if you do better without knowing what your savings account balance is so you are not tempted to spend it, an online account can help. This money can just sit there and stack up, unseen, until you need it for an emergency or are ready to celebrate a dream. If you need these funds to cover emergencies, be aware that some transfers can take a day or two.

A Word About Coupons

A discount on something you do not need is a waste of your money, which you exchanged for your time. A coupon for a product that you would not ordinarily buy is also a waste. The world of extreme couponing can look very tempting, but do be aware that this practice can lead to an addictive drive to feel the buyer’s high.

Over time, your spending choices will be much more satisfying and easier to manage if you are shopping with the intention to gain the full use of the product, rather than getting the best bargain. If overspending has ever been a problem for you, avoid coupons that may provide a rush.


To get an unusual result, you sometimes need to take a remarkable action. If you want to get off the money roller coaster of overspending, guilt, money rationing, binge or overspend again, a spending structure that considers your needs and wants can help.

Radical changes can bring big bucks, but you may feel isolated or downright weird. That is fine. By making a radical change and pushing hard for a limited amount of time, you can make big improvements in a very short amount of time.

If you have ever done a hard reset or a no spend, please share your ideas. Additionally, if you have a budgeting app that tracks your spending effectively, please share!

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