Self discipline to create a budget and control your finances

April is financial literacy month, and there is all sorts of advice out there on how to take control of your financial life. But where to start? Here are five easy, concrete steps to put financial advice into practice.

1. Schedule a financial appointment with yourself.

You might regularly put off making a budget, but what if you treated the task like an appointment? In studies of chronic procrastinators published in Psychological Science, researchers found that people who scheduled appointments or deadlines for tasks were more likely to complete them. Appointments scheduled by other people were even more effective for keeping procrastinators in check. Known as “pre-commitment,” this strategy works by understanding our natural instincts and working to fight them. There are lots of ways to implement pre-commitment, including websites like that let you set a goal and the stakes and then keep track of your progress to reward yourself with your wager.

2. Set small goals.

As with running a marathon or losing weight, the journey to financial well-being begins with a first step. So set small, achievable goals and expect to meet them: Track your spending for one week. Set up a simple budget using one of these personal finance tools. Stop simply fantasizing about your perfect financial life, and start taking steps to make it real.

3. Talk to a friend about your goal.

Living on a budget can be a real drag. You may have to forego a fancy dinner and drinks one night in exchange for leftovers and a DVD, or politely decline an invitation to shop till you drop. That’s why telling your friends and family about your goals can avoid awkward situations (“Why don’t they ever want to hang out?”) and build a support network to keep you accountable. Plus, you may have a positive influence on your friends’ habits, too.

According to a poll last year by the American Institute of CPAs, 78 percent of 25 to 34 year olds look at their friends’ financial habits to determine their own. If your friends don’t have admirable financial habits or aren’t much help in keeping you accountable, seek the help of a professional financial advisor.

4. Make an appointment with your office’s 401(k) representative.

Though it might seem like retirement is a long way off, it’s important to start saving early. Most of today’s college grads, given their high levels of debt, won’t be able to retire until age 73, according to a 2013 NerdWallet study. But that doesn’t have to be you, especially if your employer offers a 401(k) savings plan, which allows you to withhold a portion of your pay before taxes and invest it in a retirement savings account. These funds can be beneficial because your investment is tax-deferred, so the money in your account grows more quickly.

Set up a meeting with your office representative, and make sure you understand all the fees and terms of the plan. Does your employer offer to match your contribution? Make sure you get the full amount. Are you in your 20s? Invest aggressively. In your 50s? Invest more conservatively. Most importantly, start a conversation.

5. Understand how your brain works when faced with a financial decision.

We like to think our brains help us make decisions by weighing all the relevant factors to make the best choice. Unfortunately, according to research in behavioral economics, that just isn’t true. If left unchecked, our brains can lead us down a path of illogical financial decision-making by being overconfident about future performance.

We’ve all been there: It’s Jan. 1, and we decide to join a gym. But instead of buying the 10-class pass, we sign a contract for a monthly membership because we are sure we’ll go more than 10 times. However, in a study published in the American Economic Review, people with a monthly membership went to the gym only 4.3 times per month, spending upward of $17 per class, which over the course of the membership contract added up to $600 in additional costs.

The study found that people overestimated how often they’d go the gym and their likelihood of quitting the gym, which ultimately cost them extra money. Knowing about overestimation, and other tricks our brains play, can help compensate for your logical shortcomings when it comes to spending.


Call Connie Dello Buono to help you budget and save for retirement. 408-854-1883

Use a trainer and gym for learning the right way to exercise and use gym equipments and with confidence find ways to do it yourself if you can to save.

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connie dello buono

Health educator, author and enterpreneur or ; cell 408-854-1883 Helping families in the bay area by providing compassionate and live-in caregivers for homebound bay area seniors. Blogs at Currently writing a self help and self cure ebook to help transform others in their journey to wellness, Healing within, transform inside and out. This is a compilation of topics Connie answered at and posts in this site.

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