There are billions of tips and pieces of advice on how to manage your money and countless ways to save pennies and dollars with sales, coupons, etc. While that advice is sound, it could also lead to a full time job that many people simply do not have the time for. Aside from that, it also misses the biggest problem of money-managing: our society runs on the spending of money, and there are a lot of smart people in marketing who know just how to get you to spend your hard earned cash, sometimes even slightly against your will. If you have trouble managing your money or feel you are constantly coming up short, before embarking on a life-style change that involves clipping coupons, rifling through sale racks, or turning your car off at every stoplight for all of eternity, there is another idea that just might work. What you have to do is learn to beat the system that is convincing you to aimlessly spend your hard-earned money. How do you do that?
The approach is simple and incredibly do-able: keep track of what you spend your money on. It seems like a no-brainer, but most people don’t realize how much mindless over-spending they do on things they don’t really need. This mindless spending is what you are encouraged to do by advertisements and promotions, and people often throw away money on things that they don’t really want or need and forget about soon after making the purchase. So, take a day, week, or any span of time to record where your money is going; write down every time you spend money, what you’re spending your money on, and how much you’re spending. If you use a debit or credit card, this can be even easier for you because your bank likely offers regularly updated online statements. Read over your spending history carefully and then analyze it. You might be surprised when you see how much your fast-food morning breakfast and your frequent trips out for lunch and dinner actually adds up in a month. You will also notice how fast small and seemingly unimportant purchases accumulate and make a dent in your savings account.
When you see how much you are spending, really do see it with your own eyes, you are more than determined to make a better budget and stick to it. If you’re eating out habit costs you too much, assign yourself an amount per week that you feel comfortable spending. Even taking the time to assign a number to your areas of spending will make you more mindful and less likely to overspend. Once you have a budget, you can also begin to make smart, minor lifestyle changes to save money. You don’t have to devote yourself to a complete lifestyle overhaul, but everyone could probably find one small thing they could change to save money. Maybe for you it is making coffee at home, or finding more sales to support your shoe addiction. Whatever it is, it needs to be personalized because no two people treat money in the same way. Spend money on what is important to you, and save it on things that are not important. A personalized plan will take some of the stress and bother out of saving money and puts you in complete control of your finances. Don’t try to be something you are not with your money; if you hate cutting coupons, find a way to never ever have to depend on them!
If you don’t have the time or energy or mathematical know-how to make your own budget list, there are tons of free apps and programs that you can download onto your Smartphone or computer that will do all of your budgeting for you and display it in a myriad of cool ways, like color coded circle graphs and percentage charts. Some can even be linked to your credit or debit card and update as you spend, essentially doing your entire budget thinking for you! This means there is no excuse; anyone can budget if there is no thinking involved.
A helpful trick is to use cash for small purchases that are generally unimportant, like that pair of five-dollar shoes you found on sale. It is so easy to swipe a card and forget about five dollars, but when you swipe your card for small purchases multiple times they add up quickly and you notice them. This is the culprit for most people in not realizing how much they are spending; credit and debit cards make it even easier to part with your money. So, when you know your budget and have decided how much money you want to allot to small purchases, make a habit of withdrawing that much cash in a week. This way, every time you buy something you have to look at the money you are spending, and how much money that leaves you with. Before you take a bill out of your wallet, you are forced to search through the other bills there and actively think about the money you are about to spend and what you are spending it on. When you see that money dwindle, your spending will become more thoughtful. It is a simple trick of a materialistic world; people want to hold on to their material possessions, money included. Somehow, however, when cash is replaced by plastic, they lose sight of this need to hold on to their money because it is not a tangible entity that they actively see leaving. So stop the cycle! While it may be slightly inconvenient to withdraw and use cash at times, the inconvenience far outweighs the possibility of overspending.
Money management is as simple as being aware of how you are spending your money and how that differs from how you would like to spend your money. Once you are aware, taking the next steps and using some of the easy tricks that have been outlined will be simple and hopefully disrupt your lifestyle minimally. Over time, they might even become second nature!