More Americans are living paycheck to paycheck. A 2023 survey conducted by Payroll.org found that 78% of respondents are in this situation, a 6% increase from 2022. If you are working hard to earn financial freedom but not reaching your goals, here are five questions to ask yourself at the start of every month. Use these as reminders to strengthen your wealth mindset and maintain a budgeting habit that can last you a lifetime.
Am I Wasting Time Trying To Predict The Future?
As a financial coach, I learned that many people spend a lot of time trying to predict the future by reading countless articles, researching what might happen and getting caught up in the financial news cycle.
The problem is that predicting the future is futile, as the Covid-19 pandemic demonstrated. Instead, prepare for what you can control in the foreseeable future, which is generally no more than 30 days out at a time. Rather than listing out all the buckets where you must spend money, find an area that you feel you can control and be intentional about that spending over the next month.
Every month can — and should — be different. Don’t plan for next month, until you feel confident that the current one has been handled well. When you notice yourself thinking beyond the next month, bring yourself back to looking at what you know you can control within the next 30 days.
Have I Scheduled Uninterrupted Time And Energy To Conquer My Budget?
The top reason my financial education students give for not being able to budget is they are too busy. However, a solid budgeting routine, once implemented and practiced over a six-month period, will only take an hour or two a month. That’s a small amount of time compared to the 3.1 hours per day the average American spends streaming video (myself included), per a Forbes Home report.
Notice that the question asked if you scheduled time and energy to conquer your budget. I often find that people don’t budget consistently because they’re choosing times where they are at their lowest energy level. The worst time to allocate this meeting is after a busy workday when you are stressed and tired.
Choose a time and place where you will feel calm and can focus uninterrupted for up to two hours. For one of my financial education students, the final Thursday of each month works because it’s around her paycheck time and the upcoming weekend adds energy to her budgeting process.
You can kick off your new budgeting routine with momentum by pulling out your calendar right now. Set up a recurring meeting and make it nonnegotiable, undisturbed time. Put your friends and family on notice that you are booked and busy budgeting.
Can I Limit Regrets To 5 Minutes Max?
It’s helpful to know where there might have been unplanned expenses. But limit your review of last month’s spending to five minutes in your one-hour budgeting session for the upcoming month. Rather than dissecting individual past transactions, look for overall trends in behavior that you can try to shift this month. For example:
- If you blew your extra funds on clothing, commit to wearing what you have this month.
- If you didn’t meet your debt goal last month, make it your first payment this time around.
- If you ate out more than you would have liked, plan a meal prep Sunday with a friend.
The best way I know of to combat an oncoming pity party is to plan your monthly budget meeting with someone you trust. I don’t like wasting other people’s time with my own insecurities, and I tend to show up more confidently when I am working with someone who I know is awesome, too.
If you’re in a relationship, budgeting with your partner would be ideal. But that’s not always the case, and that’s okay. Choosing someone outside of your typical social circle to regularly discuss your budget with can be a form of positive peer pressure that helps you save more money.
Find someone you really trust and don’t feel ashamed to share areas where you might have some challenges. You can spend the first five minutes catching up or venting about what went wrong before. But after that, get a move on. You won’t resolve your present-day problems by fixating on what can’t be undone.
Did I Practice For At Least 3 Months Before Recalibrating?
Budgeting is a skill, and skills require repetition and practice. Even if you’ve done it in the past and are getting back into the habit, it’s unreasonable to expect you’ll be great at it from the get-go. Many of my students spend so much time fixating on what tool to use or format to follow that they don’t focus on making financial choices.
Stick to one tool and one format for at least three months before you say it doesn’t work. Then make adjustments as necessary based on the patterns you find after three months. One month or one try is not enough to say that budgeting isn’t effective. And three consecutive months is even better data than being on and off throughout the year.
What Is The 80% That I Can Accept As Good Enough?
Self-proclaimed high achievers have a hard time accepting this advice: when it comes to budgeting, 80% success is good enough. I have consistently completed a monthly budget since July 2016 and never once did it go 100% according to plan.
Thinking your budget will be exactly right is an unreasonable expectation. Learners in my financial education program often respond by audibly letting out a sigh of relief. Budgeting is not an all-or-nothing activity. It’s better to do an okay job with consistency than to do it well without a regular commitment.
If you start now and give yourself some practice and time to succeed, come this time next year, you’ll know what worked well and what needs improvement.
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