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MY
WEALTH
Spending
Habits: Can You Control It?
Posted:
Sep 2009
Do
we ever think about our spending
habits? If yes, do we do
anything to improve them?
Friend
of mind told me about smart idea
of his neighbors. They decided
to put their small bills and
coins, which they receive as a
change during shopping, into a
small cash box. The plan is
simple, they receive coins every
time while they shopping. One
year later they opened the box
and counted the money. There was
a decent amount collected,
enough to pay them a nice
tourist trip. So the went on the
trip.
This
story looks as a nice example of
saving. But at the end it only
another way of the saving the
money. It does not matter
are you collecting the coins
every day or you put a
large bill every month. Still
that is nothing else but your
money, nobody else’s. Nobody
else will buy you that trip but
yourself. It is all about your
spending habits and a way how
you decide to save the money.
So
why does somebody needs method
of saving the money, like the
example of coins and cash box,
that will make him save the
money? Probably the answer lays
in the fact that we are not
trained about developing healthy
spending habits and saving
money. We are not educated in
the school about personal
finance management. Probably we
learned facts about geography of
Himalayas, about the crop
harvests in China, but not about
how to manage our personal funds
in the most optimal way. This is
way somebody need some system (
like cash-box and coins ),
because otherwise can not control
the spending habits.
Therefore,
consider giving yourself a short
course of household
micromanagement. The course
includes simple tips and
techniques. They are so simple
that you cold make you think
that they cannot be that
powerful. But if you combine
them and place some discipline
you can easily "earn"
a well deserved trip, or
something that you need.
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First
of all, your income
should be higher than
cash outflow. In other
words – do not spend
everything that you
earn! If you can live
with spending whole
salary for a period of
time, you can come to
situation that you have
unexpected expenditure.
But when such situation
comes you will be in
financial unease, since
you do not have space in
your budget.
-
Secondly,
avoid taking unnecessary
loans. There are
situations when you need
a loan, especially for a
bigger assets ( house ),
but do you really need a
loan for a Saturday
shopping. You can easily
addict to shopping, but
if you get into debts,
you will have less and
less money. Simply, by
taking loan you are
borrowing the money from
your future incomes.
This may not look as a
problem, since you are
borrowing money from
yourself. The problem
lay in the fact that
bank takes the interest
for service of
intermediation between
"today's you"
and "future
you".
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Do
not benchmark directly
your lifestyle with your
neighbor’s spending
habits. The fact that he
has a bigger house and
more expensive car does
not mean that he is
financially healthier
than you. Even if he is,
do not compete
unnecessary. Adjust your
spending habits with
earning and create the
lifestyle that will make
you happy.
-
Try
to keep the monthly
finance journal. You
do not need to do some
complicated financial
work. Simply keep the
track of your spending.
When you establish a
good tracking of your
private financial flows,
you can apply some
expenditure planning, in
order to make your
financial flows more
efficient and effective.
Although
there are more tips about
private financial
management, e.g.
investments, try at least to
stick to these tips.
Remember, one million more
in your pocket will not make
you automatically happy.
From the other side, deep
debts may bring you unease
and uncertainty in your
life. Try to find the
optimal recipe for a
comfortable financial
lifestyle with optimal
spending habits.
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