It's not all about saving.
Give yourself an allowance.
We all liked getting an allowance as kids. And when you build a weekly allowance into your budget, you're giving yourself a head start in spending responsibly. After you've created your budget and earmarked your monthly expenses and obligatory payments, decide how much of your leftover (disposable) income you think is appropriate to use for an entire week. The categories covered by the allowance will differ from person to person. For someone who already keeps to a strict nutritional regimen and knows what her grocery costs are likely to be, but has trouble in a shopping mall, they can include clothing, but not food. For someone who lives in business suits and has no need for extraneous clothing, but are finding themselves eating out five times a week, the opposite. Identify the areas in your life where you spent too much, and restrict yourself.
Your allowance should reflect a realistic goal. If you're unsure if you're even in the right ballpark, ask a couple good friends for their advice. If you're worried that the temptation to swipe will prove too strong, try taking out your allowance in cash, and leave your plastics at home. You can even build in your own rewards system. If you spent under your budget in a given week, pool the rest into a separate savings account for a medium-term goal so you're able to afford that awesome trip that your friends are planning eight months from now.
Come back tomorrow for the next task in our financial fitness challenge.
Propose an idea here for a project or workshop that promotes financial fitness in your community. The top-voted idea will win $500 to implement the project!
Photo via (cc) Flickr user CarbonNYC
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