If you aren’t an inherently frugal person and find it extremely difficult to stick to a budget, here’s a tip for you: have a goal in mind and dangle that proverbial carrot in front of yourself. This is a principle that has worked well for successful dieters and one that, given the parallels between debt and weight, will work extremely well for frugality as well. It’s hard to be frugal for frugal’s sake, much like it’s hard to cut calories for the sake of cutting calories, so by having a goal you give yourself a good reason to be frugal. Setting a goal, though, is not enough in and of itself. You have to do two other things – track your progress and constantly remind yourself of that goal.
Setting Your Goal
When it comes to setting your goal, there are a clever mnemonic people use to guide them in setting an effective goal. That mnemonic is SMART, and it stands for Specific, Measurable, Attainable, Realistic, and Timely. If the goal that you set meets all five criteria, it’s an effective goal.
For example, you want to save money, so you set a goal of spending only $5 a day. It’s specific because you specify how much spending in how long a period of time, it’s measurable because you know how much you spend, it’s attainable because it’s physically possible, and it’s timely because you have time bounds on it (a day). However, is it realistic? Probably not in most, if not all, areas in the United States. If you lived in China, I’d say that it is possible (I just made a trip there, I’m speaking from experience). However, for the sake of argument, let’s just keep it at $5/day and say it’s realistic.
The above example is a good one of a goal but a bad one of the type of goal I think you should be setting for yourself. I believe you should be setting goals that focus on the destination and not on the journey. Spending only $5 a day is awesome because you’ll be able to save that money, but to what end? Your goal should be, I’ll only spend $5 a day for six months and use that extra money to pay for a cruise to the Western Caribbean. That cruise will be your carrot.
Tracking Your Progress
Now that you have a specific, measurable, and timely goal, it’s important that you actually measure it. Tracking your progress towards your carrot is the best thing you can do to ensure that you stay on top of your frugality. You have to focus on the destination, the carrot that is the cruise in the Western Caribbean because it will give you the energy to keep on the journey. Every day that you are able to put money towards the cruise put it in a jar or a separate bank account, and keep a running total of how far away you are from that cruise. Progress is a powerful motivator and constant progress, which will be given to you as you track your progress, will keep you acting frugal much longer than sheer will.
Constantly remind yourself what the end goal is – a cruise (in our example). Think about how much fun the cruise will be; think of all the wonderful locales you’ll visit and all the people you’ll meet. If it helps, put up pictures and notes on your refrigerator, in your wallet or purse, or even written right on your credit cards. Don’t forget the end goal and you’re less likely to lapse.