Setting goals is hard. Reaching financial ones is even more difficult. Money flows in and you instantly want to spend it. How do you balance the pursuit of your goals with the wants of today?

When you really want to buy something, it can be hard to tell yourself no, especially if you technically have the money. Budgets are great, but they only work if you stick to them. Budgets can change as needed, but if you’re constantly changing them every time you have have a whim, your budget really isn’t doing much for you.

There are 3 simple steps you can take to keep you in the driver’s seat. Impulses are just that, impulses. You’ll rationalize, you’ll explain, and you’ll feel like there’s no other option. Impulses are all emotion and emotion can get you off track in seconds. By implementing these three steps, you’ll be able to stay in control and properly process your impulses.

• Wait 30 days. If this is a real need, you won’t be able to wait 30 days. Most impulses are wants, so if you’ll wait 30 days, you can better determine how badly you really want that item. This is especially helpful because it’ll help you understand the “opportunity cost.” Opportunity cost means that if you buy A, then you can’t have B. In the end, you have to decide if you want A or B, and 30 days will help you make a better decision.
• Have a budget line to “catch money.” This was Alison’s idea, and it’s brilliant. Each month, you have categories that come in under budget, or extra money that shows up from other places. Instead of immediately giving it to a category, like Eating Out or Fun, create a new line item. Then, at your next budget committee meeting, allocate that money. You’ll make different decisions when you see a pile of money waiting, as opposed to spending it as it trickled in.
• Put reminders everywhere. Long term goals can be easy to forget. Put reminders of what you’re working towards, and more importantly, why you’re working towards it. These constant reminders will be helpful in keeping front and center why you’re sacrificing today.

Reaching financial goals is tough, but with these three simple steps, you can get more power for the fight.

Tags: Money