Lynda Moore says throw away your budget and build a money plan, a flexible roadmap, just for you, that changes as your life develops

Before we start talking about your money plan working, you are probably wondering what on earth a money plan is!

I intensely dislike the term budget.  To me it conjures up ideas of having to cut your spending to the bare bones and live on baked beans on toast (which for a foody like me, would be very hard), A budget also brings thoughts of extreme frugality, you cut out all the good things in life because you are ‘on a budget’ .  That just isn’t me, and I know there are a lot of you who feel that way to.

Don’t get me wrong, there are times when we need to be austere and frugal.  For whatever reason we need to cut the spending right back and cut out everything but the necessities of life.  I have been there, done that too.  Right now, there are a lot of families who are doing exactly that due to the current economic season we are in.  But, when the season changes, so should our budget, or as I like to call it our money plan. 

A money plan is exactly as the name suggests, it’s a plan for your money, it’s fluid, you review it, tweak it as the seasons and your finances change. It shouldn’t feel restrictive, because you build your plan based on how you choose to live your life.  You might choose to be frugal, or you might be in a phase of enjoying life right now and not saving as much.

The thing to remember is that it is your life and your plan, not someone else’s. 

Now you know what a money plan is, you can go ahead and throw away your budget, start over and build a plan that will work for you.

Everything is going well, your money plan is working, so what could possibly go wrong?  We’d like to think nothing.  But just like a fitness or weight loss goal, we can hit a plateau.  And then we just seem to stagnate, and things go nowhere for a while.

The same can happen with your money plan.  Everything’s going well and then for some reason, momentum slows, and it can be difficult to get moving again. As with any plateau, the temptation is to give up rather than push through to the next level.

Here are three reasons you might plateau and how to get yourself moving again.

1. You just get bored.
   Everything’s going along well, and it’s just that: you get a bit bored.  A bit comfortable.  Of course you don’t want your finances to be a rollercoaster ride, but when boredom sets in, it can be easy to slip back into old habits.  Maybe you get a pay rise and instead of allocating some of the extra to savings or debt reduction and some to lifestyle, you spend the whole lot.

2. The novelty starts to wear off.
   It was all exciting and motivating making change and seeing progress.  But then you hit the "Why am I doing this?” phase.  It happens with exercise as well – you’re up at the crack of dawn to go for a run when your friends are still asleep in bed, and you wonder why on earth you’re doing it.  It’s very easy in this phase to give up on your plan.  It all feels too hard.  You’d rather just pull the blankets back over your head.

3. It’s taking too long.
   Maybe you’re feeling restless and a bit frustrated that you’re not as far ahead as you thought you should be. You are starting to see some results, but they’re just not happening fast enough. You want to move things up a notch.

So now what? Yes, you’ve hit a plateau.  It’s a thing and it’s okay.  You’ve got your money plan in place, your systems are working well, and you can see your debt going down and savings going up.  But you’ve momentarily forgotten your goals and why you started down this path in the first place.

The good news is there are some easy fixes!  When you hit the plateau it’s time to revisit your goals.  Maybe they’re just too far out.  So set smaller, more exciting goals.  For example, instead of “pay off my student loan of $8,000,” you could set a shorter goal like “reduce my student loan by $1,000 and start savings for a trip overseas.” This can help to re-energize you and get you moving again.  It’s more achievable.

Review your finances.  Things may have changed.  Income could have gone up.  Or you might’ve experienced some spending creep, and you just haven’t taken it into account or noticed it.  Tweaking your plan and realigning your goals can give your motivation the boost that it needs.

Remember, it does take time to reduce debt and build some savings.  So, while things are running along nicely, start learning and researching what the next phase is.  Use the time to find out more about investing, or buying a house, or whatever it is you want to achieve in the longer term.

Change is a process, not an event.  Think back, how many years did you live without a money plan? Some of the habits you are wanting to change have been with you for years.  Yet, we think we can change them overnight, the reality is it will take many months (maybe years), to rewire your brain to the new way of managing your money, so don’t be too hard on yourself if you do plateau and get a big stuck.

As well as reviewing your money plan and your spending, look back at your personal balance sheet (what you owe and what you own) from when you started this journey and compare to where you are now.  While you may feel as if you haven’t moved very far, looking at the evidence and improvements you’ve made gives you a sense of achievement and success. Give yourself a pat on the back.  Treat yourself, refocus, and keep on moving forward.

A plateau is an opportunity to reflect on where you have been, review where you want to go, and put the plans into action to get you there.

*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.