First step in budgets is to take a step back

"New Year, new budget" or "New Year, no budget" Which are you?
Yes, it's well past the new year (Happy Spring Equinox), but with so many people losing jobs, getting work hours cut, or having their financial life in a turmoil, maybe now is the time to revisit the "B" word. Actually, I much prefer the term "spending plan."
Are you the "hands on" must know where every dollar goes type or the automated no-budget type? 
You need to recognize which behaviors will pull/push you to take needed action. Preston Cherry, a CFP and Ph.D candidate at Texas Tech University studies personality types in relation to budgeting styles according to Wall Street Journal writer, Julia Carpenter.
Consider your own attitudes and habits (and that of your spouse/partner, which can be very different). Sometimes spouses hold very different views on money management and may benefit from consulting a financial therapist.
Focus on your financial goals. What do you want to achieve in the short and long run? If saving for a house down payment or paying off student loans (or both) is a priority. Focus on what strategies will get you there.
Don't be rigid (especially if someone else shares your financial life). Sometimes the best approach is to set up an automatic savings transfer from your checking account each month toward your goals and simply live on the rest without using credit cards.
There are lots of resources and tools available. Now might be the time to put a spending plan to work to reach your goals, whether planning for the future or how to survive a pay cut.

This is the year to reach your savings goals

Behavioral economists provide tips on how to improve the odds of reaching your goals. Now that the initial New Year's Resolutions  have faded, it's time to get serious about reaching your financial (and other) goals with the help from research. About half of people who make these resolutions fail to achieve their goals. Now there is research-based help.
Source: "This may be the year you reach your savings goals" by Anne Tergesen, The Wall Street Journal, 12/28-29/19.

1. Set financial goals in January or on your birthday. Research shows these are good times to initiate change. Both wipe the slate clean and mark the start of a new year.

2. Set specific, realistic goals. Example: "I will increase my 401(k) contributions by 2%/year for the next 5 years."

3. Make a detailed written plan. Break your goal into small steps and get started.

4. Stress test your plan. "Behavioral economists recommend an exercise called mental accounting, in which people think about a desired outcome and why it matters." Ex. I am saving 15%/year so I can retire by age 67.  Identify obstacles (buying frequently on Amazon) and brainstorm solutions (stop Amazon Prime subscription and disable one-click shopping).

5. Use behavioral strategies. Automate your savings!

• Make "if-then" plans.
• Reward your successes. Treat yourself when you've stuck to your plan for 6 months.
• Use temptation bundling. Listen to an audio book while exercising; enjoy your favorite beverage while Reviewing monthly spending. 
• Use behavior therapy. "Identify triggers of bad behavior and substitute alternative rewards." 
• Use mental accounting. Save for separate goals in individual accounts. Have a visual reminder of each goal. 
• Set occasional high impact goals. Set one month as a save as much as possible/spend as little as possible. This is similar to the alcohol-free January. 

You Need a Game Plan to Get Out of Debt

• Procrastination only makes situation worse
• Even small steps make a difference

Paying off debt can seem insurmountable. But that debt can prevent saving for retirement, prevent homeownership, and negatively affect overall financial security in addition to lots of stress.

The more you procrastinate the larger the debt grows with compound interest. Start today to set a firm plan to reduce debt.

1. Get Organized
Understand how much you owe to whom and what the relative interest rates are. Start with a spreadsheet listing all your debts from highest to lowest interest.
Focus on eliminating the highest interest rate debts first.

2. Commit and Take Action
Get family members to support and participate in the effort.
Unless you are single you need to recruit other family members to join the effort.
Change your perspective from negative to positive: you can accomplish this goal. You are not a bad person because you have debt; you have lots of company but that's no excuse for ignoring what is best for you.
Set up automatic payments to pay down the debts.
If you have medical debt, try to negotiate with the provider BEFORE the debt goes to collection.

3. Set SMART Goals and Reminders
Make the connection between your long term financial goals and why you want to pay off your debts.
Set SMART goals: specific, measurable, attainable, realistic & time-specific. 
What picture visually represents your goals? Pick a picture and place it on your mirror where you will see it each morning. Pick another visual to keep in your wallet where you will see it before you spend. 

Avoiding "Lifestyle Creep"

"You've heard the seemingly outrageous stories of families who earn hundreds of thousands of dollars and still can't make ends meet. How can that happen?"

Trent Hamm explains: "One of the biggest reasons that high-earners struggle to pay their bills is lifestyle creep. Here's how it happens: As people gradually earn more money, they begin to buy more expensive things, and those purchases often result in a lot of debt, maintenance, taxes and expensive insurance bills. Over time, the bills required just to keep and maintain those expensive items can gobble up your income, leaving you with all the old worries and more career stress than before."

Sound familiar? I hope not but, if it does read Hamm's article: 5 Ways to Avoid Expensive 'Lifestyle Inflation.'

"Don't let mindless overspending decimate your increasing salary and delay financial milestones."

https://money.usnews.com/money/blogs/my-money/articles/2018-05-08/5-ways-to-avoid-expensive-lifestyle-inflation

Now is a great time to revisit your resolutions

How to help ensure  you keep your New Year's resolutions and/or reach your financial goals?   

Dan Ariely, Professor of Psychology and Behavioral Economics at Duke University, provides these suggestions: 

"One option is to make it into a public commitment and use the people around you to push yourself get into better behavior." 

"Another option is to frame the New Year’s Resolution as a thing to do for 6 weeks and give it your best for this shorter duration with the hope that a shorter commitment is more doable and that by the time you will end the six weeks that you will have a new habit."

Participate in professor Ariely's research on New Year's resolutions: http://www.surveygizmo.com/s3/3260941/New-Years-Resolutions

New Year, Fresh Start by Jonathan Clements

"WANT TO GET YOUR FINANCES headed in the right direction? Below are nine steps to take in 2017. With each step, I’ve included links to the relevant sections of HumbleDollar’s money guide." http://www.humbledollar.com/money-guide/main-menu/
Here is a summary of Jonathan Clements' "New Year-Fresh Start." Read the details at: http://www.humbledollar.com/2017/01/new-year-fresh-start/
1. Ask why.
2. Size up your opportunities.
3. Get started as an investor.
4. Buy a target date retirement fund.
5. Re-think your life insurance.
6. Build up your emergency fund- buy funding a Roth IRA. 
7. Revisit 2016's spending.
8. Plan your estate.
9. Talk to your family about your finances.

Forget the power of positive thinking!

"Positive thinking is often touted as a key to wish fulfillment: Simply envision yourself achieving your dream—and abracadabra—it will manifest!
The only problem? It doesn’t really work.
Research by Gabriele Oettingen, a psychology professor at New York University and author of Rethinking Positive Thinking: Inside the New Science of Motivation, found that people who fantasized about success—from losing weight to getting a good grade on a test—actually fared worse in the results department than those who didn’t."
"Yes, imagining a good outcome can lower your blood pressure and put you in a good mood, but as a result of feeling so satisfied, you’re less likely to take the action necessary to achieve your goal." "In other words, in order to succeed, optimistic thinking should be paired with practical methods to overcome the challenges you’ll inevitably encounter.
Based on these findings, Oettingen developed a four-step method she calls WOOP (Wish, Outcome, Obstacle, Plan) to help you bring your dreams to happy fruition." Molly Triffin explains more at: http://www.foxbusiness.com/personal-finance/2015/12/22/5-simple-steps-to-heart-happy-retirement-planning/

For Retirement or Any Savings Goal, Try Being Lazy and Self-Centered

Seems like strange advice? As much as we would like to believe that people are rational, they usually aren’t when it comes to money and deferring gratification. “What makes us really want to save? Self-actualization, says Jae Min Lee, a visiting scholar at the Ohio State University. Lee’s research finds that saving is most motivated by our search for personal fulfillment.” Lee reports it is more effective to focus on specific personalized goals like a specific vacation destination or a retirement home, rather than trying to reach a magic number like $1 million or saving “as much as I can.” Get inspired at: https://www.mainstreet.com/article/for-retirement-or-any-savings-goal-try-being-lazy-and-self-centered

Financial Checkup Worksheets

Interactive worksheets to help with your financial planning are available on the USU Housing and Financial Counseling website:

• Tracking: income and expenses

• Net worth statement: assets & liabilities

• Income & expense: monthly

• Financial ratios: evaluate debt &savings

• Revolving savings account: to cover irregular expenses

• Retirement needs: How much to invest

• Life insurance: if you need it and how much

• Goal worksheet: short, intermediate & long-term

• Budget worksheet: to help you achieve goals

https://cehs.usu.edu/scce/services/housing-financial-counseling

Turning Resolutions into Realities

"As we begin 2013, you may be wondering what the best course of action is to reach your goals this year. To turn New Year’s resolutions into a new year of realities, you must have a plan. That plan needs to consist of laying out a series of steps (large and small) that will guide you down the path toward success over the next 12 months." http://practicemanagementblog.fpanet.org/2013/01/04/turning-resolutions-into-realities/ Although written for financial advisors, the steps are the same for consumers.
Create Clarity Around Your Goals
Compartmentalize Your Goals
Attach Emotion to the Activities
Find an Accountability Partner
It takes time to change old (bad) habits. Enlist the help of a partner who shares your goals and will support you in maintaining your new habits. These recommendations are similar to SMART goals. For help in sticking with your resolutions, sign up for the Small Steps to Health and Wealth challenge: http://njaes.rutgers.edu/sshw/

Money Talk: A Financial Guide for Women

Money Talk: A Financial Guide for Women ($23.00; 192 pages; 2009). This workbook teaches women the basics of smart money management.

Money Talk provides answers to questions like: How much do I need to save for retirement?; How much insurance should I have?; How and where should I invest my money?; and How do I create a will? Over 45 worksheets help readers evaluate their personal finances, set goals for financial well-being, and implement a plan to reach those goals.

The book is divided into five sections -- Financial Basics; Are You Covered? Insurance Basics; Investing Basics; Investing for Retirement; and Planning for Future Life Events. Each section includes lessons that demystify important financial concepts and exercises that allow readers to apply the information.

To learn more about the book: http://extension.missouri.edu/publications/DisplayPub.aspx?P=NRAES160

Americans Cannot Visualize Financial Dreams

"Financial Professionals Say Americans Cannot Easily Visualize Financial Dreams:  Americans continue to show resilience post-financial crisis, but a new study released by the Principal Financial Group® and conducted by Harris Interactive reveals that many still need help to envision their financial dreams. Only one in 10 financial professionals said their clients find it easy to visualize their financial dreams, according to the study." 

Read more…(http://www.principal.com/about/news/2011/crp-advisor-study071911.htm/?WT.mc_id=DA_FP_08232011_1

What about you? It's much easier to stay motivate to invest for the future if you have a concrete vision of your goal, whether it be retirement, educational expenses, buying a house or ______ (you fill in the blank).  It helps to find a photo of what you want and post it on your mirror or fridge so you are reminded each day.

Take Control of Your Financial Future: Tips to Think About at Tax Time and Beyond

“During tax filing season, many of us spend a great deal of time focusing on our finances—and we are not always happy with what we see. According to the FINRA Investor Education Foundation's recently released State-by-State Financial Capability Survey, only one in six respondents said they were satisfied with their current financial condition. No matter the season, now is the time to take stock of your finances. Here are five key areas to consider, and links to information to help you get started.” http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/MoneyManagement/P123393