It’s easy to think “I’ll just make this up next month” every time you spend a tad more than you’ve earned. However, those same temptations are still going to be there next month, potentially propelling you into a negative cycle of expenditure and debt before long,
As Tony Robbins so aptly pointed out, there’s no such thing as stasis in this life. Not to put too fine a point on it; if your situation isn’t improving, it’s going down the drain. Before you can start building your savings and investments, however, the first step is to get your spending under control. Read on to discover the four keys to achieving this.
1. Save on Essentials
If you’re on a low income and are struggling to cover essentials like home appliances or education, there are many not-for-profits that offer a no interest loan scheme that may be able to assist you. These programs are designed to allow you to afford the things you need now without getting trapped in an endless debt cycle. Do your research, find a reputable organization and sidestep all that credit card interest you otherwise would’ve accumulated.
2. Learn Your Spending Triggers
Our modern world is full of triggers that can cause you to overspend. While some of these are created by clever marketers, some of them are also internal. You may find certain emotions, times of the day, month, or year, places, lifestyle habits. Certain friends or family members may also tend to encourage you to spend more than you would otherwise. Remove or manage these triggers, and your temptation to overspend will be greatly diminished.
3. Make Saving Fun with Short-Term Goals
There’s no denying the rush you get from buying something new. However, if you keep chasing this short-lived high, it can lead you to a financially dismal place. It might not be quite as immediate, but hitting your savings goals also triggers your brain to release dopamine in precisely the same way. Switch up your thinking so that saving, rather than spending, triggers the flow of happy chemicals in your brain, and adjust your habits accordingly.
One of the best ways of achieving this is by setting specific, achievable, short-term financial goals. Having a challenging, yet attainable target to aim for will give you a sense of purpose. When you achieve that goal, your brain will reward you with the same kind of dopamine rush you used to get from impulse buys.
4. Tell Your Money Where To Go
What’s the one thing that will always stop you spending? Having no money or credit at your disposal. While we definitely don’t recommend emptying your accounts, you can simulate this effect by compartmentalizing your coin. This entails finding a job for every dollar you earn, so that you never see money in your account that looks ripe for spending.
This trick takes care of those times when you’ve just been paid, your bank account looks healthy and you think nothing of splurging on some new shoes or dinner out at a fancy restaurant, only to find yourself skint a couple of weeks later and wishing you could turn back time. As soon as each pay packet hits your account, allocate every last cent to cover all necessary bills, savings, and investments. This way, you and your cash will always know exactly where you stand with each other.
It takes time and practice to develop more conscious spending habits. However, it can definitely be done and the benefits will be exponential, meaning there’s no better time to start than now.