The Fitbit of Finance

Whenever I’m wearing my Fitbit one of two things happens. I either feel very motivated to be more active, or I just start believing my day-to-day life counts as exercise. In the first instance, I’ll start taking the stairs, taking far-off parking spots, and going on long walks with Little Guy; the Fitbit pushes me to do more and be more conscious of my fitness. However, there is a basic amount of walking required for existing and for me it’s around 3500 steps; so in the second instance, I get to the end of a lazy day and instead of feeling like the lump I was, I look at the Fitbit and think, “Wow, I got 3500 steps today without even trying! I’m basically Usain Bolt.” Getting credit for my existence tricks me into thinking I’ve exercised when I haven’t.

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Hiking with Little Guy! (not pictured: Fitbit on left wrist)

Budgeting is the Fitbit of finance. A budget can be insanely motivating. I know once we started budgeting with YNAB, my spending habits changed dramatically. It was like playing a video game and everything I didn’t spend in was like bonus points. I make a veritable sport out of spending as little as possible on groceries. I strategically plan meals based on cost of ingredients and make a detailed grocery list, then shop at the cheapest grocery store around with Todoist and a calculator. (Yes, I’m the geek who uses a calculator in the grocery store.) I often send The Husband a text to brag if I’ve had a particularly good week. “ALL OUR GROCERIES FOR $27 THIS WEEK! GO WIFE!”calculater

But just like the Fitbit, budgeting has its own dark side. Setting a budget can feel like a license to spend up to that amount. Where we really fell prey to this was when we were still eating restaurant meals regularly–we would impulsively go out to eat on the pretense that there was plenty of room in the restaurant budget. We’ve greatly improved since then, but this mentality still plagues me at times. For example, maybe I have a lot of “room” left in the grocery budget after picking up all the necessities, so why not splurge a bit in the Aldi Finds aisle? Just like patting myself on the back for 3500 steps, this defeats the purpose of the budget.

Here are a few things I recommend for avoiding this pitfall:

 

  1. Think of your budget as your 3500 steps. Meeting the budget is just existing–it’s when you come in under budget that you’re getting financially fit. Make a budget that is challenging but realistic. I could say I’ll spend $10 a month on groceries, but it’s not going to happen and my budget will be shot once I go over. But $250 a month is just the right balance of reality and challenge–I usually beat this number, but I can definitely stay in bounds. Think of those leftover dollars at the end of the month as your bonus points.
  2. Find your motivation. Budgeting was a challenge for a long time because we didn’t have a meaningful goal driving us. Sit down (with your spouse if you’ve got one) and figure out your Master Plan. For us, it was our move and The Husband’s solo practice. For you it might be buying a cabin on a lake, traveling more, or getting out of debt. Whatever it is, you’re going to need it to sustain a budget and build savings. Start thinking of every dollar you spend as a dollar you’re stealing from that goal. Take those bonus points and put them in a savings account for your goal. Watching your dream get closer as the numbers grow will be addicting.
  3. Keep up. There are lots of awesome tools out there to track your spending–Lifehacker has list of reader favorites. Find one that works for you, link up your accounts, and keep it up-to-date so you never think you have money available that you don’t.

Your Fitbit and your budget are excellent tools for physical and financial fitness, but they can encourage a false sense of security and accomplishment. What are your tricks for avoiding the trap?

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