A challenge of sticking to our budgets is that the pleasure of over-spending is immediate, whilst the pain is delayed.
To be financially fit we need a method (or several) at the decisive moment of purchase to help us make the healthy choice.
One method I recommend is to make the trade-offs visible.
In doing so we utilise James Clear’s first law of creating a good habit, ‘make it obvious’ and the fourth law of breaking a bad habit, ‘make it unsatisfying’.
A feature of incorporating an account bucketing strategy in your budgeting system is that there is very little money sloshing around unallocated in an account.
Therefore, you need to transfer money from another account to make the unbudgeted purchase.
When all of your savings goals are also separately itemised you must decide which of your other goals you will compromise for this purchase.
For example, if one fortnight I want to go over-budget on entertainment then I first have to transfer from my holiday savings account. This either delays my holiday or reduces my choices. Ouch!
If you need support in the decisive purchasing moment, consider expanding your bucketing strategy to make trade-offs more visible.