One of the hardest things to do is to stick to a spending plan. There are a lot of unknowns when developing a spending plan, and unexpected expenses like car repairs and medical illnesses happen all the time. Have you thought about setting boundaries for your money?
Often it is our experience with and around money that affects how we handle money and our relationship with it. How you see money affects your relationship with it and understanding this could be a key to managing it better. We all have a relationship with money. Your relationship with money probably started when you were young. How did your parents handle money? Where arguments about money common?
Learn from your experiences and use them to manage money and your spending plan. One way to improve your relationship with money is to set boundaries. Below are several tips to help you set boundaries for your money.
Set a time limit rule about spending money. The rule would say you will not buy anything over a specific amount, $200 unless you think about it for 24-48 hours. During this time, you are asking yourself why you need to buy this item and how to pay for it. This rule will make you think about spending, something many of us do not do.
Use Friends and Family as a Boundary
Set a specific dollar limit above which you will discuss non-essential purchases with friends or family. Sometimes spending money is all about emotions and getting buy-in from friends and family will sometimes take emotions out of the picture, and the focus can be on the want or need.
Set a Pay-in-Full Rule
Another way to stay inside the boundaries of your spending plan is to set a pay-in-full rule. Map or plan out when and how you will pay off the item in full. The rule could state that if you cannot pay for an item in full by a certain time frame, which could be today, next week, or next month, you do not buy it.
The Layaway Option
Consider layaway as an option to stay within your budget or spending plan. After you determine that you truly need an item but just cannot afford to pay for it in full today, think about buying it on layaway. Many companies have brought back layaway. It is a good option for some who need it right now but cannot afford it right now.
Use Cash as a Boundary
Use cash to make purchases. Cash still works most places. Studies have shown that when you use cash to make purchases, you spend less. It seems that the cash leaving your purse, pocket, hand, and wallet, hurts more than the plastic stuff.
Incorporating one or two of these doable tips will help you stay within the boundaries of your spending plan. They will also help you manage your money better by helping you understand your relationship with money. Use what works best for you. Your relationship with money is different than your neighbor’s.