Budgeting and Diet

Budgeting and dieting can be difficult and, while dieting, it is probably best not to think about budgeting at all.

Carol Bernard, New York Times writer, has suggested that the best strategy for budgeting is to “set up broad goals and automate all savings”.

You can start by being conscious of your spending by keeping a “note pad, spread sheet or websites like mint.com”

Merr Statman finance professor at Santa Fe University suggested:

“1. Use mental accounting: divide your money into separate mental accounts that you treat differently.Budgeting Debt

2. Put your income into separate accounts or sub accounts.

3. Distinguish spending money from money needed for recurring households.

4. Develop a spending plan that has a sense of purpose such as buying a new car, buying a home.

5. Have an emergency fund that lasts at least three months.”

One way to cut spending is to attack categories where “you can make the biggest difference”.  That might be eating out, buying clothes, and going to the movies.

One way to help yourself is have money withdrawn from your paycheck that automatic deduction makes it less like a budget.

 

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