If the idea of doing a budget seems too mammoth a task, just pick two categories of expenses that seem to be your weakness. Record how much you spend on these over four weeks and then aim to halve this over the next four weeks. Make sure at least every person in the household is measuring one category each. Remember you can only manage something if you measure it.
What other steps have you taken or lessons have you learned as a result of the Global Financial Crisis / Credit Crunch?
Did you notice I was a week late with this post? Do you realise time is your most valuable resource? You can make money, lose it and make it back again, but you can never buy back yesterday. Don’t waste your time. Invest it wisely.
Right now, work out what time of the week you will sit down and play with your financial numbers. Some people choose Money Mondays or Wealth Wednesdays, others choose Finance Fridays. If you spend only one hour per week on your finances that’s still less than 1% (because you have 168 hrs in a week). Remember, procrastination is expensive!
Don’t you love the advertising that goes on and on? When it comes to purchasing an item with an ongoing cost remember to do your sums over the life of the item. If you’re looking at a more expensive car look at the insurance, fuel and maintenance over the next few years, compared to the savings on a smaller, less expensive car. Chances are you’ll be helping the environment too. Ongoing costs apply to pets, hairstyles and printers, among many other household items. Next time you’re shopping or being told “…but wait, there’s more”, ask yourself what ongoing costs are associated with this purchase?
With 8 weeks until I move, I’m glad I give an item of clothing away every time I buy another. Adopt this habit & not only will you help charity, you’ll think twice about unnecessary purchases. Extrapolating this, you’ll have room in your home for the energy to flow if it’s not overflowing with “stuff” and you’ll have much smoother moves. There’ll be less stuff to pack & unpack. Think of the money this will save you over a lifetime, especially if your children adopt this habit too 🙂
If you remember the tale of the Emperor being tricked into wearing invisible fabric, think about the modern day version. Large organisations employ psychologists for their marketing ploys and we allow ourselves to fall prey to our peers. If the herd you’re moving with doesn’t suit your long term financial goal ask them if they want to change direction (ie have occasional dinners out and more parties at home, don’t use shopping as entertainment, etc). If they don’t (even after you casually mention the frightening figures of what they need to save for a comfortable retirement), find a new herd. That’s how you’ll be able to walk down the street in years to come in designer clothes instead of relying on the old age pension (if indeed it exists then).
When it comes to grooming, we humans can spend a lot to make us look and feel good. And every professional stylist we go to had to start somewhere. Next time you need, make that want a massage, haircut, facial or other beauty treatment, try your local college or beauty school. The cost is considerably less, the students take care and you’re giving someone practice and can help further by giving constructive feedback. This applies for all ages and genders.
From the book The Present by Spencer Johnson, start a negative jar. Put a dollar into the jar every time you have a negative thought and see how much your thoughts are costing financially, as well as emotionally. Alternatively start a Mental Orga*m jar (the Mental O is that brilliant feeling where you think your body’s going to burst at the seams because life is just sooo fantastic!). The last option is to start a jar for each and see which grows faster. Of course the aim is to have the Mental O jar growing your savings and strengthening your mental health much faster than the negative jar, and hopefully doing away with the latter totally as it never gets used!
Here I’m talking about the old lay-by method. More people are seeing the value in putting a deposit on an item and then paying it off in instalments. This way you can build a good reputation with the store (as one client has) and you value and appreciate the item more once you’ve paid it off and are able to collect it. The other advantage is that if you change your mind you don’t lose all your money. Sometimes you won’t even lose the deposit because you can put it towards something else. Indeed, instant gratification doesn’t have the benefits mentioned above. In fact “I have to have it now” is one habit that will push you further along the path to poverty.
It’s still New year”ish” so get yourself a new wallet or clean the current one out. It’s an indication of how you value your money if you keep it in a nice “container”. Just like you take care of what you value (be it loved ones, a sentimental object or the latest gadget), start to take care of your money and your wallet. Tidy it up and treat its contents with respect, because money does allow you to have more choices. Money, if used properly, has the power to make your life much more easier and much more enjoyable. Money doesn’t care who controls it so if you manage your money well, at least it won’t be controlling you.
Last week I was playing Aunty Lissy. I taught primary (or elementary) school children how mathematics appears in Mother Nature and was talking with other teachers and parents. While there is no official method or time to start teaching children about money, it is recommended that you introduce them early to the concept of being able to earn money and pay for items. Show them the different coins and allow them to purchase small items when out shopping, recognising the price. As they show understanding of the information, continue to feed them more. Children are sponges and of course the more they learn, the better.