skip mobile nav
skip social channels
skip header skip main navigation skip dropdowns
Goal Setting: Good Vs. Bad Spending


Goal Setting: Good Vs. Bad Spending

Posted on by Fox Communities

Use Psychology to Build a Budget You’ll Stick With

When you start looking for financial advice (or any kind of advice, for that matter), experts will share their take on what’s ‘good’ and what’s ‘bad’.

In personal finance, there are some classifications that we can all agree on:

  • Debt is bad
  • Emergency funds are good
  • Overdrawing your account is bad
  • Earning interest on your savings is good

If you’re waging an inner battle of good vs. bad every time you whip out your credit card or peek at your monthly bank statement, it’s probably time to give your view on budgeting a shake-up. Start by losing the desire to classify everything as ‘good’ and ‘bad.’

There are good and bad ways to spend money, just as there are good and bad ways to save it. Following that logic, there are good and bad ways to budget.

  • A good budget is one that, quite simply, works for you
  • It allows you to meet your needs and plans for your goals, and-most importantly- it motivates you to keep on budgeting

Successful budgeting systems vary widely in their approach and in the tools you need, but they tend to have the same three actions as building blocks. These building block not only help you organize your finances, but they also have the ability to boost your motivation (and there’s a real science to back that up).


What it means:
Prioritizing your goals mean taking a little personal reflection time and writing a few things down. Prioritizing you goals should not be confused with categorizing your expense-we’re not talking about

combing through your budgeting spreadsheet and pondering whether ‘fast food’ and ‘takeout’ should be combined into a single category. No, we’re talking about your goals.

Step One: Prioritize

  • What do you want your life to look like over the next few years?
  • Is it your dream to train for a new career?
  • To have an adventure in a foreign country?
  • To throw an awesome wedding?
  • To start your own business?
  • To raise a family?

Allow your goals to be a judgement-free zone -goals and dreams are as diverse as the minds and personalities behind them. In most cases, goals reach beyond the familiar trifecta of ‘pay off student loans, buy a house, save for retirement.’

Why it works:
Prioritizing your goals gets you buzzing about what your money can do for you. There are a couple of motivating factors at work here.

  • Number one: by prioritizing your goals, you are asserting your beliefs and your values. You are also reminding yourself of why you’re willing to adopt a budgeting system in the first place. Studies show that you’re more invested in activities that you see value in—and although budgeting literally deals with values (the dollars-and-cents kind), including your personal values in your budgeting system is what generates determination and stamina. Creating and sticking to a new routine is a pain if you think you have to or you should do it; it’s a lot easier if you’re mindful of why you want to do it.
  • Number two: prioritizing your goals is a great starting point because it reminds you that you’re in charge. You have a say in where your money goes. Social scientists point to autonomy as being a critical element to sustain motivation—and what’s more autonomous than realizing that your budget is a collection of choices you make in order to create the life you want?

Get started:
Grab a pencil and paper. Ask yourself what you want. Think about it for 10 minutes. Write the answer down. Realize they are achievable.


What it means:
Tracking your expenses means being aware of where your money is going as you spend it. This is the

part where financial advice experts start to disagree again: some swear by tracking your expenses with good ol’ pencil and paper, others swear by budgeting apps and spreadsheets, and some push more unique approaches like portioning your spending money into envelopes. The good news is that it doesn’t really matter how you go about doing it, but just that you do it. When you track your expenses, a couple of things come to light right away.

Step Two: Track

  • You start to realize that every transaction, no matter how big or how small, is either contributing to a goal or taking away from it. Ther
    e’s no such thing as “buyi
    ng a pumpkin spice latte just because.” You will soon see that the cost of your fancy coffee comes out of somewhere—ideally out of your budgeted spending money, but potentially out of your vacation fund or your groceries or your student loan repayment plan.
  • The second thing you’ll notice is that the longer you’ve been tracking your expenses, the more you’ll see evidence of your progress.

Why it works:
Yet another critical element in sustaining motivation is competence, or your ability to do something well. As it turns out, we thrive on being reminded that we’re improving. On the surface level, tracking your expenses helps you to:

  • Identify your spending patterns and to course-correct when necessary.
  • More importantly, by tracking your spending, you’re also tracking your efforts.
  • You’re creating a record of your progress along with a record of your transactions.

Before long, you’ll have tangible evidence of how your actions and your follow-through are contributing to a calmer, happier financial life. You’ll see how capable you are of budgeting. You’ll find it easier (and even exciting) to keep your budgeting winning streak going.

Get started:
Try out a new budgeting system today. Browse the App Store or do a quick web search, or pick up a book on the topic. Don’t spend much time evaluating or comparing budgeting approaches. Just pick one and try it out.


What it means:
Rewarding yourself means encouraging and celebrating your progress as you create healthier financial habits. Don’t be afraid to use some creativity when defining your personal finance milestones and rewards. Milestones can be:

Step Three" Reward

  • Time-based (e.g., using a budgeting app every day for 30 days)
  • Achievement-based (e.g., paying off all credit card debt)
  • Increment-based (e.g., having your emergency fund reach $500, $1,000, $2,000…).

Rewards can take on many forms as well; material rewards are the most common, but consider incorporating time- and experience-based rewards into the mix too (for example, you can list “permission to spend an entire day just vegging out” as a reward).

Why it works:
Quite simply, rewards feel good. They highlight our achievements and renew our commitment. As kids, we loved earning those gold star stickers, and although that familiar achievement/reward structure practically disappears in later years, it doesn’t mean that rewards are any less effective in adulthood. By assigning rewards to the milestone of any given goal, you’re creating added incentive and boosting your motivation. When you earn, claim and enjoy a reward, your brain gets an extra hit of dopamine, which in turn increases your focus and drive.

Get started:
Set a timer for 10 minutes and brainstorm two lists: a list of budgeting milestones and a list of possible rewards. After the 10 minutes are up, assign the rewards to your milestones. They should reward your effort realistically and be super exciting to work toward at the same time. When you reach your milestones, claim your rewards.

The act of creating a budget contributes to your ability to follow it through. It solidifies your values, it promotes competence and it highlights your achievements as you work through it. Incorporating Prioritize, Track, Reward into your budgeting method of choice will boost your motivation while tackling your personal finance goals at the same time.

Brought to you by It’s a Money Thing

Leave a Comment


Any external site listed here is not operated or under the control of Fox Communities Credit Union (FCCU). By clicking on CONTINUE below, you will access a third-party site that is not operated by FCCU. FCCU is not responsible for the content of the third-party website. FCCU does not represent either you, or the website operator, if you enter into a transaction.

Please note that when you exit our site, our Privacy and security policy is no longer in effect. Privacy and security policies may differ from those practiced by FCCU and you should review the alternate websites' policies. You may cancel moving to the third party website by clicking on "X" to stay on



You are about to leave Fox Communities Credit Union's website. Any external site listed here is not under the control of Fox Communities Credit Union. Thank you for visiting. Please return when you need information about Fox Communities CU's products and services.