Never underestimate the power of stupid purchases in large numbers! They will add up and suck your income away. For me, this played out in the form of credit card debts. For others it may be a case of spending cash too quickly or forgetting that a debit card isn’t a credit card. Whatever the cause, your life will never make sense until you learn to curb your spending habits to suit your income. Here’s how I did it.
#1. Look Before You Leap
Before you pull your wallet out and buy something, imagine that you’re looking in a mirror and ask yourself what else this person could do with the money. If you really need something, you’ll feel that the purchase makes sense in relation to all aspects of your personality and life.
#2. Shop Around
Don’t buy on a whim. If you spend time shopping around you’ll find the best deals and give yourself time to consider whether you really need to make the purchase in the first place.
#3. Lock Your Plastic Away
Empty your wallet of credit cards and debit cards. Swiping a plastic card makes buying things far too easy. You don’t feel any loss of money, only the joy of gaining something you couldn’t afford at the moment. Force yourself to buy with cash only, and your spending habits will be curbed by your actual spending power.
#4. Withdraw Cash from a Teller
Withdraw money with the help of a person, not a machine. Psychologically this will make the transaction feel more real. The money will be more than just numbers on a screen. And your remaining balance will be a reminder that the teller will not give you more money if you overdraw your account.
#5. Come Back Tomorrow
Unless you’re buying a rare, first edition of something or other, there’s nothing forcing you to buy things right away. If you’re not 100% sure about a purchase decision, walk away. When your emotions stop dominating your thinking, you’ll be able to decide if you want to go back and make the purchase.
#6. Let the Sales Pass You By
Don’t fall into the trap of buying things just because they’re on sale. If you get that second pair of shoes for 50%, what’s the point if you didn’t need them in the first place? Malls have all sorts of tempting ways to empty your wall. It’s up to you to avoid shopping mall traps.
#7. Pat Yourself on the Back
Think of not-spending as a positive, not a negative. And set yourself a saving goal and a reward for success. So, for example, if curbing your spending habits results in your having $100 extra at the end of the month, put $80 in your savings account and buy yourself a reward with the rest.
#8. Don’t Spend Expected Earnings
Feel as excited as you like about a potential bonus, a prize or a raise, but don’t speculate on how much you’ll get and go spending it before the money is in the bank. To me this happened with a Stock Grant, which lost 20% of its value by the time the stocks were actually issued.
#9. Don’t Run Up a Tab
If your local grocer, restaurant or pub is happy to extend you a monthly credit, say “No, thank you.” There’s no difference between running up a tab and buying with a credit card. Except that here, when you see the bill at the end of the month, you’re liable to suspect your friendly neighborhood lender of cooking the books.
#10. Give Yourself an Allowance
Give yourself a break. Spending on a whim can be fun, and if you try to stop the pattern altogether you may end up with a whiplash effect, where you go on a sudden spending spree. If you give yourself a small allowance, you’ll have an outlet for the need to buy things, and you’ll learn to live with a small budget.
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