5 Mental Strategies to Help You Budget Your Money Effectively

Posted by under Money Saving Tips, Personal Finance . Published: October 4, 2019

I regularly manage my budget. It’s a habit I learned in my early 20’s and from experience, I’ve come to know how powerful it is in helping you achieve financial security.

Many ask me, including some friends, on how to properly budget their money. And most of the time, the questions are about different budgeting systems.

The most popular ones are the Zero-Based Budget Planning System, which I personally do; the Envelope Method; and the 50-30-20 Strategy, wherein you allocate 50% of your income towards your Needs, 30% towards Wants, and 20% towards Savings and Investments.

These are all great budgeting strategies. And I’m sure there are other methods that are as effective. If you’re new to budgeting, then I encourage you research and find a method that appeals to you, and then do that.

The challenges of learning a new habit.


Picking a budget planning system to adopt is the easiest part. Because from my experience, and based on the countless stories I’ve heard, what comes next is the real difficult part — and that’s following your budget plan.

This is what today is all about. Which is, making sure that you can successfully follow your budgeting system. Until eventually, it becomes your personal routine.

How do you do that? Below are five mental tools that can help you overcome the challenges of learning a new habit.

The 5 principles that we’ll discuss are from a research paper, entitled Doing Despite Disliking: Self‐Regulatory Strategies in Everyday Aversive Activities. This was written by Marie Hennecke, Thomas Czikmantori, and Veronika Brandstätter from the University of Zurich, and published in the European Journal of Personality.

The paper is about the strategies that people use to push through activities that they don’t necessarily find enjoyable at the moment; but they still do it in order to achieve success on a long-term goal they have.

For example, exercise isn’t really fun for beginners. It’s a struggle to run out of breath, you’re sweaty and sticky all over, and your body will be sore the next day. But somehow, the healthiest of people learn to push through these initial difficulties until exercise becomes a habit and eventually, enjoyable.

So what are these strategies? According to the paper:

“Focusing on positive consequences, focusing on negative consequences (of not performing the activity), thinking of the near finish, and emotion regulation increased perceived self‐regulatory success across demands, whereas distracting oneself from the aversive activity decreased it.”

Let’s apply these principles to budgeting.

1. Focusing on positive consequences.


If budgeting becomes a habit, what benefits will you get?

First, you’ll be less stressed about your finances. In fact, you’ll feel more empowered and in control of your life. Moreover, you’ll get out of debt. And you’ll be able to afford both the things you need and want.

Imagine how your life will be when you take control of your finances. And use that as your motivation when you’re struggling with your budget.

You can make a vision board, and put up photos of the things you’ll buy in the future, the things you and your loved ones will do, and the kind of life you want to lead. Look at your board everyday, especially when you’re feeling lazy about managing your finances.

2. Focusing on negative consequences.


Doing the opposite also works — imagine what will happen if you continue with your bad financial habits and stopped budgeting your money.

How will it affect your life? More importantly, how will it affect your loved ones? What will happen to you and your family?

A friend said that he’d probably need to find work overseas, just to make ends meet and pay off their debts. This meant years of being away from his family; and missing out on birthdays and seeing his son grow. It scared him when he thought about it.

Visualizing the negative consequences can jolt us back into track. It will help you push through laziness and procrastination — the top enemies of budgeting.

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3. Thinking of the near-finish.


This strategy is related to the first one, but more focused on the immediate rewards you’ll get if you finish the task-at-hand.

Whenever I feel overwhelmed with sorting through my cashflow on my budgeting spreadsheet, I’d think about that final moment when I click the “Save” button and a wave of relief washes over me.

Or when I’m going to the mall and I fear that I might buy something unnecessary. I’d think about the moment when I walk out the mall without an impulse purchase, because I successfully resisted the temptation. I imagine the satisfaction I would feel because I’m able to stick to my budget.

When you’re facing or about to face a challenge, this strategy helps your mind appreciate more the benefits of being able to push through the difficult or daunting task.

4. Emotion regulation.


I’ve been practicing the philosophy of Stoicism for more than a couple of years now, and I’ve found it extremely helpful in dealing with the stresses of life.

One of its principles is that you can’t change things that are outside your control, but you can change your attitude towards them.

When someone cuts in front of your line, that person’s action was outside your control. However, you have power over how you’ll react. You can burst into anger and tell off that person, or perhaps you can just calmly remind them that there’s a line and they should go back at the end.

What does this have to do with budgeting?

Sometimes, things happen and it messes up our budget. These are unforeseen expenses such as accidents, urgent home repairs, getting sick, or even a friend who suddenly needs financial help.

These are beyond our control. But how we handle them emotionally is well within our capacity.

You don’t need to feel helpless, anxious, or defeated. Instead, you can be calm and rational, and realize that these setbacks on your cashflow are but extra challenges that you can eventually find a solution to.

5. Avoiding distraction.


Budget planning takes time. Some corporations would even set aside several days or weeks just to plan out the company’s budget. And it’s the same for your personal finances.

For our last mental strategy, it will greatly help if you can set a regular schedule for managing your budget. And making sure that you have minimal distractions during that time.

Personally, I do my weekly budget on Monday evenings because that’s the best day that works for me. During these nights, I turn off the notifications on my phone, and tell everyone at home not disturb me for an hour.

I even prepare and bring snacks with me because I find that it helps me focus. That is, when my mind starts to wander and I can’t concentrate on what I’m doing, then I’ll take a 5-minute snack break. Doing so allows me to ease my mind back into thinking about my finances.

I have the same routine for my monthly and yearly budget planning. And I really make time to do it. I set myself up to do and finish the task with minimal distractions.

It takes time, but it’s worth it.


I’ve been managing my personal finance for more than a decade, but my budgeting habit didn’t become a habit overnight.

It took me almost a year before I found a system that worked for me. And several months before I could successfully follow that system. And a few more months after to effectively integrate budgeting into my lifestyle.

Yes, it took me around 2 years to learn, manage, and optimize this financial habit. I went through challenging and difficult times, and learned how to handle them.

I still run into bouts of procrastination and laziness every now and then. And there are times when I become just too busy that budgeting becomes less of a priority.

And when these things happen, I use these five mental strategies to get me back on track. And I know these will help you too.

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