If you have financial goals that you can’t achieve in any way, be patient: you don’t have to have more money to feel rich. The first thing to do is to analyze your spending habits. This was the opinion of Jill Kornfield, professor at Duke University and part-time expert and chief economist of personal finance accounting application.
We have many bad financial habits that we don’t even suspect. For example, you take coffee in a cafe every morning before work, because you are late and do not have time to have breakfast at home. Maybe you should try to get up early, have a quiet meal in your kitchen and still save money? Yes, initially it might seem that one cup of coffee is a penny. But you just need to calculate how much this will cost per month, and the desire to soak longer in the bed will quickly disappear. How to fight for your savings?
How it works?
First of all, it is necessary to explore those areas that cause the most concern. For example, during a lunch break, you go to pass the time to the store. Stock goods beckon and it’s virtually impossible to leave empty-handed from the supermarket. This is where unforeseen expenses appear. And there are a lot of such examples. If you reduce these costs, then over time you can significantly improve your financial condition. Use the following tips to learn about your bad financial habits.
Make a regular spending plan
If in your life there are so-called recurring expenses that take up most of your income, you need to immediately think about how to set aside the right amount. This may be a mortgage, tuition fees for your children and so on. Unfortunately, we do not always follow these payments, and they can "sneak up" to us unnoticed. Therefore, you should plan daily, weekly, monthly and annual expenses immediately. Thus, large payments will never take you by surprise.
The usual view of the balance on the account is usually misleading and does not give a detailed picture of your financial situation. Let’s take two people with approximately equal income and waste, say, for educating a child. The first person pays for studies in the first days of each month, and the second - at the end. Jill Cornfield is confident that the second person will feel richer than he really is, all month, until the day of payments comes. One way to not create the illusion of having money is to pay bills immediately after receiving a salary.
Another option is to create a separate account for these large expenses. Such methods will help you better understand how much money you actually have. So you will be less likely to spend more than you can afford.
Reevaluate your consumables
We have all heard repeatedly that the best way to save is to plan a budget, but this may not be the easiest thing to do. Jill Cornfield advises combining all discretionary expenses together. For example, if you connect areas such as the budget for going to cafes and the budget for traveling, you can track how one goal competes with another. So you will understand that if you eat more outside the home, your vacation will suffer. You should also analyze which purchases you most regret.For example, if after going to an expensive restaurant you find yourself thinking that you couldn’t do this, try to find a better budget place.
Give up meaningless loans
Yes, a mortgage and a student loan may be appropriate. But the uncontrolled use of credit cards - this can already turn into a real illness. The illusory feeling of having money is unlikely to make someone happy when the time comes for reckoning. And he will come, believe me. Of course, many people think that you need not save, but earn more so that an extra cup of coffee does not become a problem. But where would all the millionaires be if they did not monitor their finances, but thoughtlessly spend money on unnecessary things? Money loves an account, so all purchases should be treated rationally and not be made impulsively. Try incorporating these three tips into your life and see how your financial condition changes.