Can you pull off mental accounting?
I heard the term mental accounting not that long ago and since then it has really resonated with me. In an age where we swipe, tap and add to cart are we really aware of how much is going out vs. how much is coming in? I am always impressed when I speak with families who are truly nailing it; they get it, they pay off their credit cards and live within their means. Honestly, that is not easy! You have to have a deep rooted respect for money that not only comes from your budgeting foundation years, but onward to keeping up with ever changing financial circumstances.
A telltale sign that you are not able to mentally account for all of those plastic purchases is carrying a credit card balance. Essentially a credit card balance = spending more than you make.
Tip: Be honest and be kind. If you are honest about how much money you spend on your vice (think lattes, wine, high end makeup), you are far more likely to be successful at staying within your means. When you try to diminish the things that bring you joy, you are not being honest or kind to yourself, or your budget.