When you are trying to turn your financial life around, it takes more than learning about the basics of personal finance. Education doesn’t hurt, of course, and you can find the best personal finance blogs here. But head knowledge doesn’t translate into savings. Only behavior does that, and it requires some new techniques for most people to actually do the work of saving, paying down debt, investing, and spending frugally. Here are some of the best techniques.
The Sticker System (Like From Kindergarten).
One of the best ways I’ve ever found to convince myself to pay down debt steadily is to use the same system you might use on your own kids. Put up a schedule on the refrigerator. Each week, find out how much money you need to contribute to your debt to have it all paid off by a certain date. Buy some colorful stickers of your choosing. Every week when you hit your goal, give yourself a sticker on that paper schedule on the fridge.
As you hit your target over and over, that paper will fill up with stickers. It will likely become one of your favorite moments of the entire week – a visible reward that barely costs anything at all. It may sound childish, but you’d be surprised how well most people respond to this tactic used with little kids.
Budget Your Treats (and Make Them Good).
Everybody loves going out to eat, or getting a large popcorn and sitting down in a darkened movie theater. The problem is, these are expensive indulgences, and they aren’t usually associated with living a frugal life.
Most people can’t go without them completely, however. Instead of trying to go cold turkey on fun, start to focus on quality not quantity. If you like eating delicious meals prepared at a local restaurant, put a night on the calendar to do just that. Then go all out. Spend double what you normally would, if you feel like it. But let that be it. Don’t eat out for another 10 days or more.
By giving yourself quality enjoyment, you won’t feel as much temptation to routinely binge on quantity.
Talk About Money With Your Friends.
You don’t have to be overly specific, but it helps some people to make their personal finance goals somewhat public. When your friends know that you’re working hard to change your financial life, this does a couple of things for you.
1) They’ll understand if you decline to go to the music festival or other expensive outing.
2) They’ll keep you accountable, and maybe even offer ideas that can make your goals easier to achieve.
3) They might even join you, giving you a chance to go through this challenging process with company!
There are lots of little techniques you can use to make your personal finance goals a lot more achievable. Even if you understand what to do, most people need an extra nudge to change the behaviors and habits necessary for achieving new goals.