Sometimes it feels like our lives are structured in such a way that the only financial decisions we can make are poor ones. We're constantly running short on everything -- time, money and almost certainly sleep. It's just so easy to order a pizza instead of making dinner, to destress from the workday with a few drinks at the bar and to spend our money on things that make us happy for a moment instead of saving that money for the future.
The good news is that it's easy to make smarter financial decisions. Follow these budget-improving suggestions, and you'll be on your way to having a bigger bank account -- and maybe even less stress, too.
1. Make saving automatic .
Almost half of workers have less than $10,000 in savings and investments, according to a 2013 study by the Employee Benefit Research Institute. In some ways, this lack of savings is understandable -- if you deposit your entire paycheck into your checking account, it's just too easy and tempting to spend it all instead of saving.
Thankfully, this is an easy problem to fix -- all you need to do is funnel money into savings before it hits your checking account. One of the best ways to do this is contributing to a 401(k) or 403(b) retirement savings plan if your employer offers it. Not only is the money automatically deducted before you receive your paycheck, but your employer might match your contribution, essentially giving you free money.
There are other ways to automatically save, too. You can set up direct deposit to allocate some funds for your checking account and some for your savings account. Many banks also offer the option to set up an automatic transfer from one account to another. For example, you could set it up to move $200 from checking to savings on every payday.
2. Include fun in your budget .
It might sound obvious, but life isn't about toiling away at some job you dislike -- it's about having enjoyable experiences with good people. That's why you need to make room in your budget for fun. Put aside some money each month for something you enjoy -- maybe a dinner with friends or a trip to a museum. If you don't, you're more likely to get frustrated with budgeting and give up on it entirely, rather than continue working on your financial goals.
3. Enlist a shopping buddy .
If you have a friend who is also trying to save money, go shopping together. Not only do you get a fun outing, but you also have someone to provide a second opinion on potential purchases. Here are some questions for you and your shopping buddy to ask each other:
-- Does this item fill a need, or is it a want?
-- Can you wait to make this purchase?
-- Can you find a cheaper version of the same item?
-- When and where will you use this item?
-- Is it something you could borrow instead of buy?
Of course, this only works if your shopping buddy also wants to save -- someone who tells you to buy everything won't help!
4. Be healthy and happy.
We make the best decisions when we are feeling healthy and happy. After all, how many times have you bought something -- anything from a cookie to a new gadget -- because something else was bothering you? Get enough sleep, eat well and practice mindfulness, and you'll be on your way to making better decisions -- financial and beyond.
And it is possible to buy things that will make you happy, but you need to make sure you're buying the right things. In their book "Happy Money: The Science of Smarter Spending," behavioral scientists Elizabeth Dunn and Michael Norton say buying experiences instead of things, focusing on having more free time instead of getting more money and giving money to charity can all make you a happier person -- and happier with how you're spending money.
5. Understand willpower .
Willpower isn't an unlimited resource. Rather, it's like a muscle, as exercising willpower in your decision-making becomes harder as the day goes on. If you have the option to make financial decisions earlier in the day rather than later, do it -- you'll be more likely to make the smarter decision. And if you're having trouble with a decision later in the day, recognize that your willpower might be tapped. If that's the case, consider putting off the decision until the next day.
Meg Favreau is the senior editor for the personal finance blog Wise Bread, which covers rewards credit card mistakes and other personal finance tips.
