04/25/2012 01:34 pm ET Updated Jun 25, 2012

6 Steps to Rethinking Your Budget

By Linda Descano, CFA®, President and CEO, Women & Co. and Managing Director and Head of Digital Partnerships, North America Marketing, Citi

It's time to reclaim the "b-word!" No, not that b-word -- I mean this one: budget. Are you still smiling? Probably not. I get it because the word "budget," like "diet," often conjures up images ranging from handcuffs to roadblocks to locked refrigerators -- all reminding us of what we can't do, what we can't buy or what we can't eat. But no more. I'm on a mission to make 2012 the year of budget bliss by reframing how we think about budgeting and providing actionable tips for putting our new budget beliefs into practice.

The reframing comes down to this: Rather than thinking of a budget as an impediment, start thinking of it as an instrument that is enabling you to stay on course to reach some goal -- or, as I've been known to say, a financial beacon on your horizon that you are rowing towards. Put another way for you land-lovers: a budget is a roadmap that helps you get from where you are today to where you want to be tomorrow. I firmly believe that when you choose to focus on the possibilities a budget affords rather than the "penalties" it imposes, it's empowering -- and the more empowered I feel, the more motivated I am to stick with it. I'm guessing some of you have experienced this, too.

As you might expect, the first step towards budget bliss is to choose your budget vantage point -- roadblock or roadmap? Then, as I shared in my Women & Co. blog, Kiss the Budget Blues Goodbye (with some minor tweaks and improvements):

Get clarity about your goals -- from where you want to go on vacation next year to how much you want to save towards your child's college education to how much you want to generate in retirement income, next year or in 20 years. A financial professional can help you monetize those goals so you know what you need to save.

Connect with your money by putting "pen to paper" to reconcile your spending, saving and giving (because I believe everyone should make a place for charity). Granted, this is never easy and you may wear out several erasers until you get to that optimal balance. Again, a financial professional can be helpful in running "what if" scenarios to help you figure this out -- and also help you determine the appropriate investment strategy for your savings. It's time to aim the budget.

Be conscientious, says my friend and money maven, Barbara Stanny, and "diligently track every financial transaction, whether a purchase or withdrawal, large or small, or by cash, check, credit or debit." Barbara suggests using an empty check register for this, but you could always use spreadsheets and online resources, such as bundle or Manilla, if you want to get fancy. What's important is getting it down in writing. Over time, you will see patterns in how and where you use your money, which can help you make even smarter decisions going forward.

Calibrate how your spending compares with others in your local area through resources such as bundle that offer a free comprehensive collection of spending and saving data. (Some banks, including Women & Co.'s parent company, Citibank, offer similar tools to customers who bank online.) I've found this to be really helpful. Ever a type-A, I get a charge out of finding ways to bring my spending in line with what peers are doing. It's the thrill of the "chase," I guess!

Create a "virtuous cycle" by rewarding yourself when you reach certain milestones. For example, if you stay on track for 30 days, you will treat yourself to a manicure. Or, when you reach the 90-day mark, go for a massage. As with most things, carrots often achieve more than sticks.

Cut yourself some slack if you succumb to financial temptation. It happens -- even to money mavens like me. Just take it in, re-read this article, and you'll get back to a blissful state!

About the Author:
Linda is President and CEO of Women & Co., a service of Citi that brings women relevant financial content and thoughtful commentary. She also serves as a Managing Director and Head of Digital Partnerships for North America Marketing at Citi. A recognized expert on the topic of personal finance, Linda is also the featured contributor on and, for which she serves as their women and money expert. Her writing, tips and commentary have appeared in countless publications including: Huffington Post, MORE Magazine, American Banker and MSN Money to name a few. She is the recipient of a 2011 Luminary Award from Womensphere® and was the New York recipient of the 2009 Corporate w2wlink Ascendancy Award.