How to Make Budgeting a Habit

10/18/2021 Marine Bank

Your habits define your quality of life.


That’s why developing good habits is important. They directly influence the success of your work, health, and finances.


Even though we know the impact of our small daily habits, it’s still a struggle to form healthy new ones or get rid of bad ones.


It’s said that the hardest part of starting something new, is the simple act of getting started. If that’s the case, the second hardest part is keeping up with it once the surge of excitement and motivation has faded.


Motivation is crucial, but it’s not the driving force behind what makes or breaks success. Real progress comes with the self-control to reach many small attainable goals over a long period.


So you want to get into the habit of budgeting? Let’s talk about how long it takes to form a habit and the steps to make it happen and keep it going.

 

How Long It Takes to Form a New Habit

Some theories say it takes 21 days of daily practice to form a new habit. Others say 30 days and still others claim that it takes 66 days to train yourself into truly forming a new habit.


In reality, the answer is, it depends.


What kind of habit is it?

What kind of person are you?

What past experiences formed your current habits?


There is no definitive answer as to how long it takes to form a habit, so don’t let anyone tell you otherwise.


As you get started with your new budgeting habit, make it a priority to dedicate at least 5 minutes a day to check your bank transactions and look over your budget. Eventually, you might adjust this to once a week, but as you form your new habit, make it part of your daily routine.

 

 

5 Tips to Start a New Budgeting Habit

Here are some tips to make sure you stick with your budgeting habit for the long haul.


1. Know your WHY

Before you start tracking any of your finances, ask yourself WHY you want a budget.


Do you want a new home and need to save for a down payment?

Are you ready to get out of debt?

Is retirement on your mind?

Are you ready to build some emergency savings for life’s unexpected expenses?

Or is it a priority that you live within your means?


Once you understand why you want to start your new budgeting habit, you can create realistic goals. And goals are essential because they measure your progress and success.


 


2. Keep it simple

This step is crucial to your long-term success. Keep your goals small and simple.


Don’t make things harder on yourself by making massive changes in the beginning. Change goes against our nature, so if you make your goals too big or too numerous, it’s harder to maintain the habit.


Instead, start with one small change, like eating out less often. Keep an eye on how much money you save, and celebrate that small win. Continue that habit, and add another one, like going through your subscriptions and removing the ones you don’t use regularly.


Focusing on these small wins rewards and reinforces your changing behavior. And these small continuous rewards train your brain to turn a behavior into a habit.*


Source: The Habit Loop: How to Build Positive Habits That Set You Up For Success


That means you’re doing these things without even knowing you’re doing them.


When you understand and work WITH your human nature, there’s a higher chance of succeeding.


3. Do it every day

Once you’ve created your budget (in case you missed it, here are the 6 fundamental steps to make a budget that’s right for you), find time to review it every day for the first month.


The only way to turn a practice into a habit is to do it over and over again. Repetition trains your brain to work on autopilot.


Basically, be consistent.


An added benefit of tracking your budget daily for the first month is that it gives you a good indication of whether your expenses exceed your income.


  1. Make it easy

Prep your environment and mindset ahead of time to make things easier on yourself.


Practicing something new requires a lot more willpower than a well-established habit. To make the process easier, pair budgeting with something you do regularly.


For example, every morning, before you check your email, take 5-10 minutes to look over your budget. Or if you’re more of an evening person, dedicate a few minutes after dinner to check in on your finances.


Is there anything you can do ahead of time to make it easier to budget? For example, if you keep your budgeting tool or app on your computer or mobile device, move it to your desktop or main screen so it’s visible and easy to access.


The small actions you take to prepare your environment are gentle nudges that make budgeting more natural and comfortable. And when tasks are natural and comfortable, they’re more likely to become a long-lasting habit.   


  1. Stick with it

Whatever you do, don’t stop!


If you find you’re skipping your budgeting time, take a moment to reflect. Ask yourself why you’ve lost motivation, and remember your WHY.


Forming a new habit can take one, two, three, or even more tries. Don’t get down on yourself when you feel like you aren’t reaching your expectations.


Just remember why you’re doing it and focus on your small wins.


Final Takeaway

There’s only one thing that can stop you from improving your financial health – you!


Now that you have the tips you need to build your new budgeting habit, it’s time to get started on your first step to reaching your financial goals.


More Budgeting Resources:

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