I am not a resolutions guy. And I don’t think you should be either. So ignore the title. This is just a challenge, it really has nothing to do with the time of year. Although, if you are a resolutions person, good for you? Hopefully, you stick to them better than most. Actually maybe I am a resolutions guy, if that means setting goals. Goals are great, especially for your financial life. Most people will struggle to make financial progress without setting a goal first. I’m just picky about how goals are set. Too vague and you can never be sure you really accomplished it. Too long (like so many New Year’s Resolutions) and you’ll give up in a few weeks. Accomplishable goals need to be short and specific. In the next 30 days I’ll spend no more than $70 on eating out. In the next 90 days I’ll pay off my $550 store credit card. These goals challenge you but also set you up for success.
Hopefully you know your financial life well enough to come up with your own goals, but if not, I’ve got a challenge for you. I’ve talked about counting transactions before but it’s always good to have a refresher on this major aspect of your financial life. You swipe your card a lot. I know this because I swipe my card a lot. We all need stuff. We need gas for both cars. Groceries, prescriptions, and an oil change. Then there’s the lunch out and drinks with coworkers. Oh, and don’t forget to pick up a birthday present for your niece. By the end of the week you’ve swiped your card an average of 22 times. Which of course means you spent money 22 times in a week. And maybe your purchases were all thoughtful and within budget, it’s possible, but this challenge isn’t necessarily about how much you spend. It’s about how often you spend. The more you swipe the more you become numb to the action of spending. $1.50 here and $5.39 there doesn’t faze you anymore, but it should. You should be fazed by using your card.
So the challenge is to count your transactions. Take a look back at your week. Count up how many times you swiped. Don’t count bills, this is just about consumer transactions. How many times did you swipe? Oh, and if you are sharing money with someone like a spouse, their transactions should be counted with yours. Now the number is probably pretty painful. If it’s over 20, this challenge is perfect for you because spending money over 20 times a week is an issue. In the 10-20 range? You can do better than that. This week challenge yourself to only swipe your card 5 times (this is a per household number, so if two of you are sharing money you can each swipe around 2.5 times).
When Mrs. Planner and I did this a few years ago our transactions manifested in this way: 1) gas for my car, 2) gas for her car, 3) groceries, 4) lunch out for me, and 5) coffee for her. Did I mention she was nine months pregnant at the time? I sincerely don’t recommend doing this when one or both of you is pregnant. Put a pin in it.
Was the 5 transaction challenge tough? ABSOLUTELY. We said no a lot. No. No. No. Just all day long we had to say no to all the temptations to swipe. And while it was a rough week, we noticed that the ‘no’ mentality stuck with us. Months after we did this weeklong challenge we still played the game in our heads of ‘do I really need this?’
This challenge isn’t meant to stick. It isn’t reasonable to spend money only 5 times a week, every week. Although of course, it is possible. Swiping under 10 times a week is a solid base. Every once in a while throw in a 5 transactions-a-week challenge to keep yourself on your toes.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.