Oops! Fixing Money Mistakes

We all make mistakes now again when managing our money because, hey, nobody’s perfect (well . . . except maybe Harry Styles but that has more to do with his voice and his hair than any financial skills he might possess). Whether it’s over-drawing your checking account or spending a little too much cash during that night out, we all slip up occasionally. It can be tempting, and frankly easier, to just sweep these errors under the rug. If you don’t acknowledge the problem, it’s like it never happened, right?

WRONG! The key to getting your budget back on track is not to close your eyes tightly and hope the mistakes disappear; instead, try to identify where you went wrong as soon as you discover the error. I came across the following passage in a book recently that sums it up perfectly:

“Tip # 22: Pay Attention Immediately After You Make a Mistake. Most of us are allergic to mistakes. When we make one, our every instinct urges us to look away, ignore it, and pretend it didn’t happen. This is not good because as we’ve seen, mistakes are our guideposts for improvement. Brain-scan studies reveal a vital instant, 0.25 seconds after a mistake is made, in which people do one of two things – they look hard at the mistake or they ignore it. People who pay deeper attention to a mistake learn significantly more than those who ignore it.

Develop the habit of attending to your errors right away. Don’t wince, don’t close your eyes; look straight at them and see what really happened, and ask yourself what you can do next to improve. Take mistakes seriously, but never personally.”

– Daniel Coyle, The Little Book of Talent

So the next time you make a mistake with your money, don’t just brush it off. Identify the mistake right away. Why did you overspend? On what? What made your account go into the negative? And then, figure out how you’re going to stop it from happening again. Maybe you need to adjust your budget or just check your balance on your mobile app before you make a purchase. Use your mistake as a tool to do better in the future.

4 Fun Ways to Increase Your Savings

I was a sprinter, not a distance swimmer, which is why I think I am naturally bad at saving money. I have a savings account and I do save money, but it takes a lot of work and even more will power. Often times I feel like I’ve worked super hard not to spend money but then my savings account has nothing to show for it. That’s probably because building up savings takes time. A lot of time. We’re not talking days or weeks here – it can take years to start seeing your savings add up in a significant way. But that’s why it’s even more important that you plug away at it! Don’t fall into the “I don’t have enough money to save any” trap. Every dollar helps. Here are some fun ideas on how you can jump start your savings habit:

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1. Reverse 52 Week Savings Challenge – We’ve all heard of the original 52 Week Challenge before, where you end up saving $1,378 in a year by savings $1 the first week, $2 the second week, $3 the third week, etc. This works great for some people, but others give up on it only a few weeks in. That may be because after the first month, you’ll only have saved $10 which is not very exciting. But what if you did the challenge in reverse and started by saving $52 the first week, $51 the second, and so on? You would have $202 by the end of the first month, which is a way bigger motivator to keep saving. It could work!

2. Savings Bingo – Or if you like to live on the edge you could mix up the 52 Week Challenge even more by not following a pattern at all. Write all 52 amounts on little slips of paper, put them in a bowl, and then randomly select one a week. Whatever number you pull out of the bowl that week is the amount you have to save.

3. No Spend Challenge – This challenge is great for people who don’t like to have fun. But truthfully it could be a wake up call for how much you spend on “extra” stuff each month. For one month only pay for necessities, like rent, electricity, car payments, grocery shopping,etc. Do not pay for anything extra like eating out, movie tickets, or new clothes. You might think you “never go out” or “hardly ever buy candy at the gas station” in a typical month, but you’ll be surprised how much you can save in a short period of time when you cut out non-necessities.

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4. Spare Change Challenge – If you still use cash rather than a card, this challenge is for you! At the end of every day, toss your spare coins into a jar and save them up for a year. At the end of the year you can roll them or bring them to a coin machine to turn coins into cash. My dad has been doing this for years but he never actually cashes in all the coins. Instead I steal them from him a little bit at a time and cash them in myself . . . I mean what? Just kidding. I haven’t done that since high school, Dad, I swear.

3 Ways to Make Your New Year’s Resolution Stick

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It’s January 7th, which means we are a week into the New Year and, if you’re like me, you might have given up on your New Year’s Resolution already. I had every intention of keeping a food diary but then I forgot to do it on the first and then … Yea … I haven’t started it yet. Statistics show that it takes about 21 days to form a new habit; if you’ve been good about following your resolution so far, you’re well on your to making it permanent. But if you’re like 92% of Americans, you might already be struggling to “read more” or “go to the gym.” Don’t give up! You can still commit to your resolution and make it work. Here are some tips:

1. Don’t quit cold turkey. 100% resolutions like “giving up coffee” or “never using your credit card again” rarely stick because they’re too absolute. Chances are you made a resolution like this to break a bad habit and that means temptation to fall back into that habit probably lurks around every corner. When you inevitably give in and eat a piece of candy or skip the gym you’ll feel guilty and defeated which will make you more likely to just give up altogether. Instead set resolutions that allow for some wiggle room. Instead of “I’m not drinking coffee any more,” try, “I’ll only drink coffee on the weekends.”

2. Be specific. Some resolutions sound good when you repeat them to everyone at a New Year’s Eve Party, but don’t work so well once January 1st actually rolls around and you have to put them into action. Stuff like “lose weight” sounds like a great idea, but how do you measure your success? How much weight? How are you going to do it? Focusing on a small, behavioral resolution increases your likelihood of achieving your goal. “I’m going to go to yoga class 3 times a week” is a resolution that will help you lose weight AND you will be able to definitively say if you stuck to it or not. Keep the goal small, realistic, and achievable.

3. Only say it if you mean it. Do you even really care about losing weight? Or do you even like going to the gym? Resolutions for resolutions sake are never effective. Make your resolution something you actually want to do, even if it seems small or insignificant. One year my boss’s resolution was to get a library card. Seems simple, but it was something she had been meaning to do for a long time and making it her resolution made her actually get herself to the local library. If your resolution is something you’re not enthusiastic about, you won’t commit to it.

Hope these tips help you stick to your resolution. Now if only I could find that notebook I meant to write my meals down in…