When you find yourself spending too much money frivolously, it can be difficult to cut down all at once. Personal finance blog The Simple Dollar recommends making incremental decreases so it's easier to adjust to the change.
Photo by Charlie Ambler.
If you know how much you want to decrease your spending from what's been typical so far, just cut that up into more manageable chunks:
So, in January, for example, I set a target of 75% of a typical month from 2009, capping my spending at $US180. In February, I dropped it to 70% – $US165. Each month thereafter, I've dropped it another 5%, leaving May at 55% of my spending from an average month in 2009. In June, I'll be at 50% and I'll stay there for a couple of months, then start dropping further, ending with November and December at 35%. For the year, the total adds up to 50% of my spending for 2009.
Making the changes small and incremental has, at least so far, made it much easier. Each month, I'm pushed just a little more to use the library instead of the bookstore. I'm pushed just a bit more to eat out less. I'm pushed just a smidge more to hold off on buying a new board game, holding off a month or two. I'm pushed to conserve money for things later in the year that I intend to do.
We already know how well this works for debt repayment, saving money and achieving goals — in fact, this is pretty useful for changing any type of habit. Hit the link for the full article on incremental change, and if you've ever successfully achieved a goal this way, tell us about it in the comments!
The Incremental Change [The Simple Dollar]