By Kelley Keehn, FP Canada’s Consumer Advocate
Like diets, budgets don’t work if they’re not sustainable. How can you budget a certain area of your life if you don’t know how many financial “calories” you’re consuming?
Once a year, I ask my readers (and my husband!), to track every single dollar they spend.
You don’t need to do anything differently—just write down every expenditure. Awareness kicks in by the end of week one and many people effortlessly cut back on purchases.
Try these anti-budgeting tips with your family:
1: Write down and tally purchases by category.
Once people see how much they’re spending each month per category, they’re shocked.
2: Crunch the numbers.
This accesses a different, more reasonable part of your brain. Multiply by 12 and be stunned by the annual amount spent.
3: Pay only with cash for a week.
This also accesses a different part of your brain—one that’s associated with loss aversion.
4: Email or text yourself anytime you buy anything.
The accountability and awareness will curtail needless spending.
5: Commit to a cooling off period.
If you’re going to buy a “want” item over $100, agree to a 24-hour cooling off period.
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