The Seventh Sin - Operating Sans Budget

Groan. Sigh. Boo. I know, how much more boring could a HMW be -- talking about budgeting on New Year's Eve?!! The good news is, 2008 is a chance to renew and have your greatest financial year ever! Plus, you can read this now and ignore it until tomorrow :)

Instead of making a resolution you know you won't keep, why not choose to embrace a spot on the mindful spending continuum? I'm not suggesting you fret over every penny, nor that you stop treating yourself -- (I'm still going to buy wine and go to restaurants), just that you think about what you're buying and why. And commit to tracking your spending. Different HMW will have different plans. The point is to have a plan, a budget, or at minimum know how your cash leaves your pocket. More good news: this should only take about 15 minutes!

Management books say "you can't manage what you don't measure", so start with you unique situation by plugging your numbers into the outline below:

Net take home pay = salary - 401k - (possible) flex spending account deduction
Net spendable = net take home - savings - rent - bills (cell, utilities, gym, insurance, car, etc.)

So "net spendable" is what I allow myself for travel (got to see the world), running shoes, wine, etc. All the things I technically don't "need" but wouldn't care to live without.

One of the best practices I found for embracing mindful spending was ditching my credit cards. Sure, I still use a credit card for major planned purchases from time to time, but not without thinking about it and ordering a side serving of guilt. It's just too easy to put it on the card, get into the mindset of paying it off "later" and then end up in debt. My debit card and me are now bff.

Separating yourself from plastic is easier than you think -- you're probably already practicing mindful consumption other life arenas quite well. Have you ever had a few too many calorie-laden fruity beach drinks while on vaca, and then come home to soup and salad for a week to balance it out? Or ramped up your workouts after a week of long work hours that meant skipping the gym?

You can do the same thing with your spending! After a big fancy dinner out, perhaps you join your girlfriends for coffee or a hike instead of more expensive dinners. Or organize a rotating potluck instead of routinely being the hostess. Perhaps you buy the shoes next month. You get the picture -- the point is to think before you spend.

Now go open something sparkling -- I'm a huge fan of Prosecco since it's festive, light and tends to be a bargin when compared to its Champagne sister :)