If looking at your budget causes you feelings of dread or guilt (Why don't I save more? Do I really spend that much on eating out?), consider this: Yoga's powerful tools for working with your mind can help you approach money matters with consciousness and compassion. Setting a budget can be like meditation. It gives you an opportunity to observe your spending and saving patterns and to cultivate awareness around them, says former Wall Street broker turned yoga teacher and financial coach Claire Kinsella.
To change your money habits for the better, you don't need to try to force yourself to stick to a spartan budget, says Kinsella. Instead, start by identifying your most important values and understand how money serves them. "You'll be pulled in the right direction by the power of your values," she says. "Wherever we place our consciousness, change takes place."
Tactics: The Buck Stops Here
4 Steps to Create a Better Budget:
1. Identify Your Values: Write down the things that matter most to you. By thinking about the values and ideals that are important to you—things like health, family, and work-life balance—you'll clarify the purpose of money in your life.
2. Look at Your Habits: Gather records of your last three months of expenses and look at your average monthly money flow. Write down your savings and investments, committed monthly costs, and flexible expenses.
3. Observe Without Judgment: After each line item in your cash flow, write down feelings or insights about your expenditures. Observe without getting caught in reactions. Is each budget item aligned with your values?
4. Identify Action Steps: Think about changes you can make to align your money use with your values. For instance, if your value is family and you want to take a vacation, are you saving for that? Could you spend less on something else to support your values?
Action Plan: Track Your Spending
You can't make a change if you don't have a clear picture of your finances. See your bank accounts, investments, and credit card statements in one place with online finance software (and smartphone apps) such as Mint (mint.com). With real-time information about how you are using your money, you can stay on budget and plan for the future.