Here’s a piece of insight on why you are in your current financial situation: a great deal of it is down to habit. From the way you simply don’t seem to have enough to save, to your inability to stop spending on inessentials, a lot of it comes down to how you’re comfortable doing things the way they’ve always been done. Charging more to a credit card than you can afford to pay back is habit. So is not keeping tabs on how much money you have in the bank to draw (and running into the red).
It would be great if you could hit the reset button on such financial habits and start all over again. While you should certainly keep trying, it isn’t something that you may be able to do easily. For results right now, what you can do is to start a few good, responsible financial habits (or ones that trick you into doing the right thing).
Schedule five minutes a day to take a look at your money
People manage to do a lot of damage to their finances simply because they don’t make themselves confront their financial situation on a regular basis. Simply looking once a day at what you have — each one of your credit cards and bank accounts — will help your mind work out some kind of self-preservation. You’ll find you don’t feel like overspending as much. Denial is harder when you know the facts.
Just take money off the table
If you made $100 less each week, you would probably still survive. Don’t make saving a discretionary expense at the end of the month. Instead, simply set up an automatic transfer to a separate account. You can even talk to your employer to have the money taken out before it makes it to your account. Once you begin to see that account grow and grow, it will be your healthy new addiction to look at it and gloat.
Stop saving face
A lot of the spending that you do is probably to save face. Whether it’s going on shopping trips with your friends and buying the same things that they do, taking in the movies or ordering new phones, a great deal of what you do is about showing people that you’re doing well too. You pay huge price for this.
Take away the motivation to do this once and for all. Keep bringing up with your friends and family that you aren’t doing well at all, and that money is tight. To begin, you’ll become very popular because you’ll be the one person telling it like it is. Once you do this, you’ll no longer worry about saving face, either. If you try to buy a new phone, you’ll find friends and family telling you that you can’t afford it. Making sure that you have no face to save is a great finance habit to build.
Make a habit of wanting bigger things, rather than small things
Who says that you can only splurge on small things like shoes, clothes or gadgets? Why not up the ante, and try to splurge on much bigger things? Show off not with an iPhone, but with a business plan. Tell yourself you can’t stand to work for someone else your whole life, and start saving up for your own rental home business (there’s some great info from AustinWyatt.co.uk to be had on how to prepare to run such a business). When you begin to save, you’ll find that it gives you a lot of strength to know that you are onto something great.
Resolve to only shop from a list
Have you ever walked into Tesco’s to buy a couple of kitchen essentials, and walked out with armfuls of stuff you didn’t even know you needed? Grocery stores are set up to have just this effect on you, and people fall for it every time. Studies find that 70% of such unplanned purchases end in regret. Just tell yourself that you will only by off our list. Whatever isn’t on your list simply doesn’t get bought. You’d be surprised how much you save this way.
Hope to create a keystone habit
A keystone habit is a term that psychologists use. It’s a good habit that somehow finds its way deep into your psyche, and begins to influence everything that you do in a sort of chain reaction. One of these habits may begin to see how you see yourself. You may like seeing yourself as someone who has enough self-discipline to do something responsible.
Clarence Torres is an accountant who lives in the South-West. Always a maths whizz at school, is more recent years, Clarence has discovered a passion for sharing his knowledge and tips via writing.