“There’s nothing you can’t do if you get the habits right.” ― Charles Duhigg, The Power of Habit: Why We Do What We Do and How to Change
There are a few different types of Budgeting apps. Some do their best at categorizing transactions for you, while others make you input all of your transactions manually. Depending on your situation, you might decide one way is better for you than the other, but making it a habit to review and check every transaction will help you be more aware of your financial situation.
Before credit cards, transactions all took place with either cash or check. Cash transactions required you to have the money you wanted to spend with you inherently providing a sense of budgeting. You literally felt the money leave your presence and you could more easily visualize how much you had left. Checks made it a little more easy to pay without cash readily on-hand, but you still needed to balance your checkbook to avoid bouncing the check and having lawyers get involved.
With the advent of credit cards, you can now spend money that you don’t have without even looking at your balance. You swipe a little plastic card and instantly get whatever you want. Or now you can just tap with your phone. Or click on a yellow button and have whatever delivered to your house in 2 days or less! There is no longer that inherent sense of budgeting you had from feeling the paper money leave your pocket. This has created a dangerous consumer-driven culture that fulfills its need of instant gratification and creates a debt-driven society.
You can start to change this for yourself by creating a habit around your spending.
Every time you spend money, take some time to review that transaction and sort it into a budget you have set up to make sure you are not overspending. By touching every transaction, you are adding back that sense of feeling and awareness that we lost by using our credit card. Building up a habit of doing this for every transaction will give you a better understanding of your financial snapshot and realize your situation better.
Want to put this idea into action?
Budgets makes it easy for you to build up this habit by having you sort every transaction that comes in. Learn more about Budgets and how you can be more financially empowered at https://budgets.money
Do you have other financial habits that have helped you? We’d love to hear about them in the comments below.