I’m sorry if this sounds like a silly question, but I never learned about money or budgeting while growing up, and I also struggle with ADHD. So, my question is: when people talk about setting money aside for something or including it in their budget, where do they physically put that money? In my understanding, a budget is just numbers and words. How do you ensure that the money is saved and not spent?
Saying “Just don’t spend on things that aren’t in the budget” comes naturally to me, but I know that many others find it difficult.
I keep a spreadsheet track of all my expenses. Additionally, they provide apps that link to your bank account to track your spending, which may be more effective for you.
You do need paper numbers, but only use folders with cash to spend. Once the money is gone, it’s gone.
If you don’t need the money right away (for example, car tags, insurance, Christmas, etc.), put it in a savings account.
Put a calendar on your bathroom mirror or on your fridge.
You might benefit from employing an envelope system for a while. You name each envelope with the budget line item, put the budgeted amount in it, and when it’s empty, you’re done spending money on that line item.
When I first started budgeting, I faced a similar challenge. I learned that setting money aside doesn’t necessarily mean physically separating cash; it’s about creating designated categories within your finances. For instance, you can have separate savings accounts for different goals like an emergency fund, travel fund, or a fund for large purchases. Direct deposit and automatic transfers from your main account into these designated savings accounts can help ensure that money is saved consistently.
Additionally, budgeting apps or spreadsheets can track these allocations virtually, helping you stay accountable and visualize progress towards your financial goals. This approach helps in managing impulse spending and ensures that money intended for savings stays untouched until needed for its designated purpose.
It sounds like you have a thoughtful approach to managing larger purchases and expenses. Here’s a simplified version:
When I’m considering buying something big that I don’t really need, like a TV or a $60 video game, or even planning a vacation, I start by researching. I look up different options and prices, and I compare them to find what suits me best.
Then, instead of rushing into a decision, I give myself a day or two to think about it. If I still want it after that, I wait a bit longer, maybe a week or two. During this time, I ask myself if I really still want it and if I can afford it without causing any financial strain.
Sometimes, I also imagine what it would be like if I already had the item or the vacation planned. I might ask myself, “If I had already paid for this vacation, would I be willing to cancel it in exchange for the money?”
For smaller expenses, I usually try to find a compromise and think about whether it’s really necessary or something I can do without.
This method helps me make sure I’m making smart choices about how I spend my money.