Spending money can be a lot of fun. Many of us even get a temporary high whenever we buy something new. But spending habits can be dangerous and even downright destructive if you get carried away and let them get the better of you.
Awareness of your spending habits and the money triggers that make you overspend is the first step in reigning in your spending and taking control of your finances.
Follow the four simple steps below to start forming healthy spending habits that might just change your life for the better…
Live Within Your Means
It seems so simple doesn’t it? Just don’t spend any more money than you can afford. Sounds easy right?
Then why do so many people have such a hard time doing it?
The answer is peer pressure. They see their friends, relatives, and neighbors spending money and buying new things so they want to do the same. Part of it is the need to keep up with the Joneses so it appears that you’re doing as well as everyone else is doing. No one wants to be the one who says, “No, I just can’t afford that right now.”
But the truth is you never really know how your neighbors and friends are REALLY doing. Sure, they may have just bought a new car and have all the latest gadgets and gizmos. But for all you know they’re up to their eyeballs in debt and will never get out.
Is that really the example you want to follow?
Be a Value Hunter
If you took a good, hard look at where your money is going I’d bet you’d be shocked at how much cash you’re just throwing away.
Smart spenders know how to work the system to get bargains on everything they buy. They haggle with the car salesman until he begs for mercy and gives them the price they want. They shop for sales and combine discounted prices with coupons.
They skip over-priced brand name products and purchase the generics which offer a much better deal. And they buy quality items that will last instead of cheap garbage that will quickly break.
Eliminate Budget Fat
Everyone has a little fat in their budget that they could easily cut out without even feeling it. Take a look at your monthly spending and see what you can eliminate. Then take those savings and put them towards paying off debt or investing for your future.
Shun Credit Card Debt
Credit cards often get a bad reputation because so many people just don’t know how to use them effectively. They charge more than they can afford to pay back and they end up paying a fortune in interest while falling deeper and deeper into debt.
But credit cards themselves aren’t evil, they’re just misused.
When used correctly, credit cards offer convenience, added protection from fraud and theft, and the opportunity to earn valuable rewards.
The key is to simply never spend more than you can afford to pay off each month. By doing that you’ll be getting a free short-term loan to make your purchases while avoiding interest payments and debt.
Credit card companies hate people like that…but that’s a good thing. 😉