4 Budget Tactics to Save More and Spend Better

I write a lot about setting spending and savings goals. A big reason why is because most of us go through life on cruise control. Sure we can come up with all varieties of dreams but do we really plan to reach them? Or, even better, how do we know if we’re achieving them? We don’t. Not unless we make spending and saving a priority.

Next up are 4 budgeting tactics that will help you save more and spend more wisely.

Have a purpose/goal. Without fail, having short, mid, and long term goals will share your financial habits. They don’t have to be elaborate or vetted through 5 different people. The most important aspect of any goal is that it be meaningful to you. Not your parents. Not your boss. Not your neighbors. Be passionate about your financial goals and you’re more likely to carry through with them.

Be in agreement with your spouse and children. Along with the above point (having a purpose), your budget will need to be understood by your spouse and kids (if applicable). You might think this will be too restrictive but I don’t agree. I like to brainstorm with my wife about our future.

What do we want to accomplish as a family? Do we want to travel? Live closer to family? Keep working until you both come to an exclusive agreement on a few goals.

Make reality based decisions. I know you want to make that extra $100 debt payment. But have you the last 3 months? Are you really giving to your church or is the charity budget category a fall back for excessive spending? This is where having software comes in handy.

It doesn’t matter where I think my money flows. The software tells me exactly where I’ve been spending. [pullquote]The more honest you are about your spending habits, the sooner you can make progress in your financial life.[/pullquote]

Aim for the 80% solution. This is something I learned in the military. Something I call the “anti-perfection” tactic. Don’t set too many financial goals all at once. Maximize your debt payments while saving a small amount each month. Create and conquer tiny habits that move you towards your financial goals. One. Step. At. A. Time. As you create tiny habits, big habits will build. If you try to conquer the big habits head on, success will seem more out of reach.

If you buy coffee every morning, drop one day a week. Then, in a few months, drop another day. Save $10 this month, then $20 in month 3.

The whole point of budgeting is to help you be more mindful. Too many time we spend (or save) without thinking or simply out of habit. But setting up a system that gives you more insight into your financial habits will greatly increase your chances of future financial success.

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