Build Financial Guardrails to Keep Problematic Spending in Check

A dollar sign appears in the foam of a latte
(Adobe Stock)

Many of us have hard-to-control areas of our spending. Maybe it’s grocery shopping or in-app purchases, or even just regularly stopping at the shoppette for a soda.

One solution is to keep careful track of your spending. It works, but it can be tiring. Another solution is to build financial guardrails to keep the problematic parts of your spending in line. Guardrails help you stay on the road. Financial guardrails help you stay on your spending plan. They can be tied to time or to a dollar amount.

Timed Financial Guardrails

Time-based financial guardrails dictate how often you’re willing to spend money on a certain item. This works best for purchases that are likely to be in the same price range each time. When my children were young, I observed that many friends ordered pizza frequently. It’s easy to understand why: Parenting is time-consuming. But I knew my food budget couldn’t support buying pizza several times a week. My solution was to create a financial guardrail. We could order pizza only on Fridays except in a very exceptional situation. I still tried to stick to a spending amount and purchased from whichever shop was having the best sale. If possible, we picked up the pizza to avoid delivery fees and tips. The Horrell family celebrated “Pizza Friday” for years. What started out as a guardrail turned into a family tradition. It’s kind of cool how that happened.

Dollar-Capped Financial Guardrails

Capping the amount you’ll spend on a problematic item is even easier. Let’s say you budget $50 a month for your favorite coffee shop. Instead of trying to remember how much you’ve spent, be proactive. On the first of each month, move $50 to the spending card in the store’s app. Spend only from the app. When the money's gone, you’re done with that category of spending for the month. Our family does this on a much larger scale with our grocery budget. With two people buying groceries at various stores over the month, keeping track of grocery spending was getting really hard. So we opened a new checking account specifically for our grocery spending, and we each have a debit card. I set up an automatic transfer to that account on the first of each month. Now, all grocery spending is counted accurately. I might check mid-month to see how we’re doing. If it seems like we’re overspending, we’ll stick to essential grocery purchases for the rest of the month. For groceries, I would find more money if we absolutely needed it. But for something like coffee, the budget is the budget. Those are my priorities. You can make different choices. These financial guidelines are a lot like the envelope method of budgeting -- dividing up literal cash into various envelopes according to spending category -- but instead relying on technology to accomplish your goals. What financial guardrail could you build today?

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