Changing Your Spending Habits

Retired By Retired, 18th Nov 2010 | Follow this author | RSS Feed
Posted in Wikinut>Money>Money Saving Tips

Most people get hung up financially on their perceptions of their lifestyle either what they can afford or what they feel they should be able to afford.You watch what your neighbors or co-workers are doing, and you think, “If they can do it, I can, too.” Stop. The problem with looking at what other people do with their money is that their priorities and values very likely don’t mesh with yours. But you can’t know for sure unless you know what your priorities and values are.

Steps that will help you get a handle on your own wants and needs:

1. Write down what you want, from the everyday to big things.
If you want to be able to eat out three nights a week, write that down. If you want to buy a boat or a new living room set or a big-screen TV, write it down. If you want to take a cruise, piano lessons, or a sabbatical from your job, write it down. Don’t make any judgments about whether your desires are sensible or silly; you’ll sort that out later. For now, write down everything.Put your broader financial goals on this list, too: “I want to have $10,000 in savings,” “I want to open an IRA,” “I want to pay off the car,” or what have you.

2. Put a price tag next to each item on your list.
This will help you identify the things that can fit into your budget now and the things you’ll have to make a special effort (that is, save) for.

3. Prioritize your list.
This is where you sort out the things that are most important to you.Maybe eating out three nights a week is how you socialize with your friends; if so, that may be more important to you than a new couch. Remember that these are your priorities — not your neighbors’, not your parents’, not your friends, just yours.

4. Brainstorm options for the most important things on your list.
Can any of these things fit into your monthly budget? What things will you have to save for? Just as important is considering ways to get what you want for less. If you really want a new couch, for example, check out auctions, estate sales, and secondhand stores in your area before you head to the retail furniture store; you may be able to get higher quality for quite a bit less money.

5. Put your list where you can find it easily and refer to it often.
Spending is just like any other habit it takes time to change it. For the first month, look at your list at least every other day. Doing this keeps you focused on your goals and priorities, which helps insulate you from the deleterious magnetism of both instant gratification and consumer envy.

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Comments

author avatar Retired
18th Nov 2010 (#)

great share, excellent tips

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author avatar Natasha Head
18th Nov 2010 (#)

nice share...good advice!

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author avatar joeldgreat
18th Nov 2010 (#)

Great tips for everyday living. thanks for sharing.

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author avatar Humza
27th Nov 2010 (#)

wise advice and practical tips
thnx for sharing

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author avatar forlan
1st Dec 2010 (#)

It is a perfect step to change spending habbit

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author avatar Abdul Rahim Hasan
2nd Dec 2010 (#)

Very important tips for today's life. Thanks for sharing.

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author avatar Strovek
2nd Dec 2010 (#)

Very practical.

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author avatar D in The Darling
10th Dec 2010 (#)

Straight to the point! We're not the same hence our financial standing is also different. Know yours! Thanks for these meaningful tips! I'm following you right away!

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