Hit Reset: A Financial Fast to Refresh Your Finances
Financial fasting is a short-term cleanse for your finances to help you reach your financial goals. Similar to a health cleanse, financial fasting helps reset impulsive habits but with spending instead of food. A financial fast can reevaluate your money behaviors and establish healthy personal finance practices. Follow the steps below to get started!
Budget to Understand Spending: A well-thought budget shows you where monthly money is spent. List out fixed expenses like housing, transportation, and groceries. Then add discretionary spending (for the things you want) like entertainment, eating out, etc. Creating a written list helps you determine where to focus.
Distinguish Needs vs. Wants: Categorize items in your budget by needs or wants. Expenses such as housing and transportation are considered needs because they are essential to survive. In contrast, your wants are nice to have but not essential, such as streaming services, takeout, etc. A financial fast eliminates nonessential expenses, freeing up more funds for needs, savings, and debt.
Identify Spending Triggers: It’s good to note when and why you overspend. If you impulsively shop online when bored or stop at your favorite coffee shop conveniently located on your way to work, try hiding stored payment methods on your devices and taking an alternative route to work. Discover your triggers and remove temptations that lead to unnecessary spending.
Seek Support and Inspiration: Share your financial fasting plan with family and friends. Their support will keep you accountable and will help motivate you to stick to your plan. You may even inspire others to join the financial reset!
A financial fast for even a short period can reshape your thoughts about needs versus wants. Start gradually and focus on developing mindful and sustainable habits. With some effort, you can get your finances back on track! Our certified financial coach is here to help guide you toward financial success. Contact creynolds@newdimensionsfcu.com or (207) 660-6267 to schedule an appointment and discuss your financial fasting plan.