Mondy Monday: Four Spending Quick Tips for 2010
1. Pay with actual cash when you can. Credit cards are a major cause of overspending. When we whip out the plastic, our mind goes numb; we don’t process the transaction the same visceral way we do when we spend cash. (Think of it like using poker chips in Vegas — only without Wayne Newton tunes cranking through the sound system.) In fact, some experts say people spend 15% to 30% more when using credit instead of cash. Spending actual cash forces you to think about every dollar you spend, so you experience a physical reaction to forking over $1s and $5s.
2. Set up an instant no-brainer budget. The “envelope” budgeting approach will help you get in tune with your spending in a snap. The idea is that you carry around just the amount of cash you want to devote to various spending categories (lunch, entertainment, cute shoes) for that week. Try it for the first couple of weeks in January and see how it affects your purchasing. Chances are it’ll keep you from frittering away your money so much so that you’ll tell the whole family to play along.
3. Keep your big wants/dreams in the forefront of your mind. Think of every financial decision in the context of your larger money goals (be it buying a new coat, paying cash for your next car, or securing your retirement). Before you toss a gossip magazine into your grocery cart while waiting in the checkout line or buy something just because it‘s on sale consider whether or not such purchases get you to that two-week cruise or covering Junior’s college costs.
No, I don’t advocate sacrificing all short-term pleasures (love those gingerbread lattes, by the way). But combined with the budgeting method above, this is a pretty powerful motivator to keep the mindless spending in check.
Write a list of your big money goals on a small index card and keep it in your wallet. This constant visual reminder of what you really want to do with your money will make you think before you buy anything that doesn’t align with your real wishes.
4. Always shop with a list. It may be cliché, but shopping with a list will keep you honest. Studies show that as much as 60% of supermarket purchases are unplanned. With the average family shelling out $5,000 for groceries each year, that’s $2,000 of unnecessary stuff running across the scanner.
Source: The Motley Fool
Category: Savvy Savers
Subscribe
If you enjoyed this article, subscribe to receive more just like it.
About the Author (Author Profile)
Colethea Jenkins is a Securities Licensed “Financial Coach” with over 15 years of strong Banking, Insurance, and Investment Advisory experience. Colethea specializes in money management, Wealth Accumulation, Tax savings strategies, and Private Equity Investment Advisory. Colethea is also the Chief Financial Officer-Board of Director for Intercede Consultants, LLC., President of “Build Grow and Enjoy Radio” which seeks to promote financial literacy by globally empowering our communities. In addition she is the founder of The Annual Keystone Leadership Awards Ceremony. Colethea is very skilled and talented. She has a well rounded financial background qualifying her to share her expert abilities by educating and teaching everyone. Follow Colethea @ ww.buildgrowandenjoy.com