Sometimes, even the best-laid plans of budgets and money go awry. If you’ve veered a bit off track from your financial resolutions, don’t give up. Know that you are fully capable of steering yourself back to a smart path. Building smart financial habits is like learning to follow a healthy diet: you wouldn’t tell yourself, “Well, I had some junk food today, so I’ll give up completely on eating well for the rest of my life.” Every day is a fresh chance to make smart choices for your financial health.
Similarly, no diet should be too extreme – it’s not sustainable. If you told me that you were going to follow a 1,000-calorie all-vegetable diet, how long would that last? But if you decide that instead of a donut for breakfast, you’ll have whole-wheat toast, that’s a smart switch that’s very achievable. Your financial diet shouldn’t be about depriving yourself of all fun and entertainment, but about identifying your financial priorities (like building an emergency fund), paying down high-interest debt, and investing in your future) and aligning your budget to support them.
One simple approach is the all-cash diet. Simply withdraw the amount of cash that you have budgeted for the week, and when it’s gone, it’s gone. This gives you a better idea of how small purchases add up. Especially for those who are used to swiping a debit or credit card without a second thought, the all-cash diet forces you to be more mindful about what, where, and how you’re spending. When you hand over cash, you literally feel it, but that psychological power doesn’t transfer over to paying with plastic. Gaining a keen sense of your spending is an empowering step toward taking control of your finances.