I’ve focused in previous Whiteboard Wednesdays on keeping things simple so you can stay on track. While unsustainable effort can affect change, it’s only meant to move the needle–not keep it there indefinitely.

With keeping things simple, I’ve tried to help people use fewer accounts (if you’re using YNAB correctly, a checking account and long(er)-term savings account is really all you need–with the savings account being optional). I want people to use fewer categories.

In fact, my goal, by the end of 2011 is to have our budget categories (these aren’t master categories, but the actual categories themselves) whittled down to the following:

Tithing
Savings
Bills (Fixed)
Cash

However, for many of you, you may want to go in the opposite direction, for a time. Remember, a short burst of unsustainable behavior can affect change. Something unsustainable you can try is to make certain categories very granular.

The saying goes, “Where performance is measured, performance improves.”

A YNAB user over at wi-fi voltage journals about YNAB fairly regularly. They decided to break out their grocery bill into two parts:

- Groceries
- Junk food

Guess what behavior they’re trying to improve there? It’s an excellent implementation.

Do you find that you’re addicted to purchasing shoes? Your “Clothing” category make look like this:

Clothing : Other
Clothing: Shoes

Do you want to quit smoking? For some, the financial drain can be motivation enough:

Miscellaneous : Other
Miscellaneous : Cigarettes

Do you play too many games? Buy too many comic books? Eat too many pizzas? Eat out too often? (Make these categories head south.)

Want to cook at home more? Want to read more? Eat more fruits and vegetables? (Make these categories head north. That’s right, spend more!)

Let me know in the comments section how you’re going to user your budget like a laser–pinpointing behaviors you’d like to change and measuring for results.

There’s a great scene in the movie “The Patriot” with Mel Gibson. Mel Gibson’s character is giving his young sons some final shooting pointers before they engage the British in a battle to save his oldest son. After he is finished with his instructions, he says, “What did I tell you fellas about shooting?”. They both respond sheepishly almost in unison, “Aim small, miss small.”

In other words, the more focused your aim on a target, the more likely you are to be successful. If I am simply aiming for the target on the wall, I may miss the target completely. However if I aim for the center of the target, while I may not hit the center exactly, I’m more likely to at least hit the target somewhere.

To improve your “budgeting” aim, you’ll need to make one major shift in the way you think about, and approach your spending.

Stop making spending decisions by checking the bank balance, and use the budget to guide your spending instead.

I see this frequently in working with people one on one. They spend a lot of time focusing on accounts. Why? Well, that’s the structure that society has in place for money management. Think about it. Isn’t that where you handle things, in a way? You get money, you put it in the bank. To spend money, you remove it from the bank. It’s easy to see why we get so focused there.

But imagine that you have $1000 in your bank account. You want to buy some new clothes. You check the bank balance. There’s money – so you can spend. It seems logical enough.

But your aim is so unfocused, you may be spending money you need for the light bill, or gas for the car, or groceries. You may not hit the money you’ve set aside for clothing. So how can you tell? Well you can’t – if all you are aiming for is to stay above zero in your bank balance.

Want to improve your aim?

Check your budget

How much money have you budgeted for clothing? Aim for that target when spending. If there’s not enough, at least now you know and if you want to, you can make an adjustment.

Are bank accounts important? Of course they are! They are the physical storage containers for our money. They represent where your money is. But the budget keeps track of your plan and what your money is doing. Your bank account has no idea what the plan is. It’s like asking someone for directions who’s never been where you are going.

Stay focused on the plan. Make sure your money is doing what you told it to.

Aim small, miss small.