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How to Engage in Safe Spending

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Tips to Make Saving Fun

Do you sometimes feel like your spending is out of control? Do you have a goal to save more in 2023? Does just the thought of cutting back give you anxiety? Trust me when I say you’re not alone if you answered yes to any of these questions. It can be overwhelming to try to gain more control over your spending, and it doesn’t help that soaring inflation is making the cost of everything more expensive.

Fortunately, there are ways to manage your spending that are relatively painless (and perhaps even fun!). The key is to implement strategies rooted in behavioral research that trigger positive and repeatable budgeting habits. The following tips can help.

#1 – Set small goals you can achieve in the near term.

Oftentimes, people try to start by focusing on a few long-term goals, but this can sometimes lead to feeling overwhelmed and like you seemingly can’t make any tangible progress. One of the best ways to stay motivated is by setting small, achievable goals and knocking them out one after another. For example, set a goal of adding $20-$50 per week to your emergency savings account. Each week, congratulate yourself for making this contribution. This small goal can help you feel good about your efforts and motivate you to do more. Once this weekly savings goal has become a habit, add another small goal to the mix, such as increasing your 401k contribution by 1% to 2%. Over time, you’ll be excited to witness the impact these small efforts have on your overall savings and financial outlook.

#2 – Don’t lose sight of the long term.  

While small, short-term goals are important, you don’t want to lose sight of your long-term goals. One of the best ways to avoid doing so is to establish a financial plan. Having a financial plan is essential to setting, understanding and achieving your long-term goals. A financial plan can help increase your level of confidence and comfort, identify gaps in your current savings and investments, encourage more constructive financial behavior and protect your wealth and loved ones. Routinely revisiting your financial plan at least once per year also provides an opportunity for you to take a step back, look at the big picture and see the cumulative positive impact that all those small goals you’ve achieved have had. Ultimately, a good financial plan puts you in control of your future.

#3 – Provide yourself with peace of mind.

One of the best motivators to continue your smart spending and saving habits is the peace of mind that comes with financial stability. Perhaps that peace of mind is paying off your credit card debt. Maybe it’s successfully saving six months’ worth of expenses in an emergency fund or having a plan in place to pay for your child’s college education.

Whatever your goals may be, when you finally achieve them, relish the peace of mind that comes with that accomplishment and use it as motivation to continue pursuing your other financial goals.

#4 – Stop obsessing.

As the old saying goes, “Rome wasn’t built in a day.” And unless you happen to win the lottery, it’s quite likely your financial plan won’t be miraculously “built” in one day either. There’s no reason to check in on your accounts every day (or even every week). Witnessing short-term fluctuations in your account balance can be unsettling at best and downright anxiety causing at worst. These uneasy feelings may lead you to make a rash decision that could quickly derail your financial plan, such as selling an investment at a loss or holding too much cash.

As long as you have a diversified investment portfolio that’s in line with your risk tolerance, time horizon and future goals, you don’t have to obsess over every market dip. Periods of market volatility can actually be a good thing for an individual’s long-term plan, by allowing them to potentially save money on taxes with tax-loss harvesting or buy more investments at a lower price. Plus, if you’re working with a qualified wealth manager, he or she is keeping an eye on your investments and looking for strategic opportunities like these to help improve your long-term outlook. Try to relax and let your investments work for you, not against you.

Could you use a bit of help implementing smart (and fun) spending and saving strategies? Creative Planning is here for you. Our teams help ensure your entire financial life is working toward achieving your long-term goals. Schedule a call to learn more.

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


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