The American consumer, according to the media and financial institutions, is a person mired in debt. We continue to spend, but we don't save our pennies for a rainy day. Here are some simple ways that you can start taking control of your money and put what you don't spend in a "rainy day" account.
Before you buy something, ask yourself the following questions: Can I afford it? Do I really need it? If I purchase this item, what then will I have to forgo later? Even though you may really want it at the time, if you ask these questions of yourself, the majority of the time you will realize that you really don't need it or want it. It was more of an impulse purchase at the time.
Don't go shopping after having a bad day. This is especially common for females to do if they have had a bad day at work or have just broken up with their boyfriend. Buying something nice for ourselves makes us feel good. The problem is that when we are feeling so low, we don't think about how much that item cost us, until we get the credit card bill next month.
Cut up those credit cards. Having four or five credit cards with credit lines of $5,000 and more just isn't necessary. It is good to have a credit card on hand for emergencies. Remember though, buying a new dress for a weekend out on the town is not an emergency! Learn to pay with cash or get a debit card that gets paid directly out of your checking account.
Shop for your groceries after you have already eaten. When you are hungry, it is easy to want to buy everything that looks and tastes good. Also, bring a list of what you need for the week and stick to the list. Just because something is on sale, doesn't mean you need it. Thank of it this way. If an item is normally $2.50, but is on sale for $1.95, then you saved $0.55 by buying it. However, if you don't buy it at all, you saved $2.50.
Subscribe to your favorite magazines. A single magazine purchased from the newsstand will cost you the cover price. If you have a subscription, you can save anywhere from 20% to over 50%.
Shop in outlet stores. There are so many choices of stores that sell their clothing, housewares and miscellaneous items through outlet stores. You can find name brand clothing for a fraction of the price. Places like Nordstrom Rack, TJMaxx and Marshall's are great places to find deals. Look, also, when department stores have huge clearance sales. You can also try shopping right before the next season, as this is when retailers mark down last season's clothing right before the next season's offerings arrive.
Make your own lunch to take to work. Instead of eating out at a restaurant every day during your lunchtime, try making a healthy lunch to eat. Not only will you save money, but chances are, you will also be eating better.
These seem like simple little things to do and they are, but they have the potential to save you hundreds of dollars a month. This is just one of the first steps in getting your finances under control so you can start having your piggybank full.
There was a time in my life when I went from a tiny income to a six-figure income in a short period of time. From my experience, I found that if you don't control your spending, you don't see a huge difference in your financial stability even if there's a huge increase in your income.
Obviously, with a larger income you have more opportunities. You can buy more and do more as well as live a better lifestyle. You may feel financially stable, but if you don't control your spending, then your financial stability does not really improve. It's not how much you make, it's how you control your spending that makes a real difference in your financial stability. If you make $10,000 every month and you spend $12,000 monthly, at the end of the year you'll be $24,000 in debt even though you earned over $120,000!
Tom had a goal. Within two years he wanted a monthly income of over $4,000. He accomplished his goal within that timeframe. The only thing missing was financial stability. Even though Tom increased his income, he also increased his spending by almost the same amount. He reached his income goal, but the real goal was not $4,000 a month, it was financial stability, and he didn't accomplish that because as his income grew, so did his spending.
I'm sure you've heard stories from Hollywood in which famous people with enormous incomes have gone bankrupt. Most of the time, the problem is excessive spending. Celebrities usually make and spend enormous amounts of money.
You don't need to change your business drastically to become financially stable. You don't need to become cheap, you don't need to suffer, and you don't need to change your lifestyle drastically. You DO need to become aware of your spending habits and control your spending carefully.
I know what you're thinking. "How can I save when there's nothing left? All my income is accounted for."
You're right. All of your income is accounted for, but you have spending habits you're not aware of. The only way to become aware of them is to get clear about the way you spend money. To keep more of your money, simply spend less of your money!
Here's an example. On your way into the office, you stop by and grab a coffee and bagel and the morning paper. It's no big deal, right? Lunch comes around and you're out another $5. On the way home you have a soft drink for another $1. It's only a few bucks right? Well let's take the total, $8, and multiply that by 240 working days. That's $1,920 a year.
It's not my intent to tell you how to spend your money; my point is that you must be aware of how you spend it. In the above example, put away $1920 a year in a good retirement plan and with enough years you'll end up with a worthy retirement fund.
The only way to understand your spending habits and see patterns emerge is to record your purchases. Every single one. If you don't, you won't be able to see the areas that will allow you to cut out excessive or unnecessary spending. You don't have to do this forever, but do it for at least one month. To benefit from this article and have more money without increasing your income or profits, you must record your daily spending.
Once you identify the areas where you're spending too much money, you'll be able to cut down in those areas. Controlling your spending starts with your thoughts. If you can control your thoughts, you can easily control your spending.
Here are a few tips for controlled spending
* Avoid window-shopping, browsing the web, or anything that gives you opportunities to make purchases that you don't need. My friend Bruce once told me, "Stay out of the stores!" He said, "Here's what I do if I need something. I go into the store, grab it, and get out!" Every time I'm in a store, his voice echoes through my head: "Get out of the store!"
* There's a difference between a want and need. You require needs, but you can live without a want. Get your needs, and control your wants. * To control your spending, simply ask yourself a few simple questions like: Do I really need this? Can my business survive without this? What am I giving up if I buy this? Where can I put this money to better use? * If you're working long hours, and your sales and profits are just enough to make ends meet, then you're spending too much money. * If you re just making payroll, and if you have bills that are piling up, then you're spending too much money.
If you don't have any money saved and you have a lot of debt, then you're spending too much money. So basically, you're in a prison controlled by your finances. Every time you make a purchase, you're trading some freedom for the purchase. Become aware of this fact. Invest in your freedom, not in items you buy.
Action Steps To Help You Increase Your Income
1. Identify your spending habits. For at least one month, list each purchase you make every day. 2. Reduce or cut out those areas where you have excessive or unnecessary spending. 3. Use questions when you make purchases, such as: Do I really need this? Can my business survive without this?
Important Points to Keep In Mind When Increasing Your Income
* If you don't control your spending, you don't see a huge difference in your financial stability---even if there's a huge increase in income. * You may feel financially stable, but if you don't control your spending, then the financial stability does not really improve. * It's not how much you make, it's how you control your spending that makes a real difference in your financial stability. * You do need to become aware of your spending habits and control your spending carefully. * If you don't have any money saved and you have a lot of debt, then you're spending too much money. * Every time you make a purchase, you're trading some freedom for that purchase.
Both Michael Russell & Acey Gaspard are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Michael Russell has sinced written about articles on various topics from Celebrities, Dieting and Diabetes Treatment. Michael RussellYour Independent guide to . Michael Russell's top article generates over 2240000 views. to your Favourites.
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