It’s a problem that most people have. By the time we are fully grown adults with real careers, we’ve tried it all: savings accounts, setting aside money ahead of time for priorities, tracking our expenses via checkbooks or online banking, piggy banks, you name it. Sometimes it works, but too many times, it doesn’t. When the money is technically available to you, and there’s something you really want, you make up another excuse for why you deserve it. Or else you just have a hard time looking at the big picture, and a few nights at the bar turns into a major dent in your finances. It happens to the best of us. Nevertheless, there are a few tricks of the trade floating around out there that have helped many people start saving money. Here are a few good ones that might help you:
Limit Your Accounts
When you have multiple accounts, you’ll typically spend more money on a regular basis because you’re not fully aware of the total amount of money you have, and that provides a little subconscious comfort to you because you’re not seeing that total number drop down as you spend more and more, but only a number that represents a fraction of your money. The same concept goes with keeping cash on you all the time.
Think Twice Before Making Big Purchases
Studies show that for most people, the feeling of wanting something brings more happiness to them than actually having it. So before you spend half your paycheck on something you don’t actually need, wait a day or two and then decide if it’s really worth it. Consider the alternate things you could do with that money. Think about the years to come; will you still love it just as much next year? If you still think you should get it after all that, then go for it.
Budget Your Money!
Most people know about this one, but don’t actually do it. Start by thinking about the top five things you spend your money on. Do some math and try to figure out the approximate monthly amount you spend on each of those things. Or better yet, get a detailed bank statement. You’ll probably find that one or two of those things are a bit out of control. What do you want that number to be? Try setting a budget for each of those categories, and then one for miscellaneous purchases.
For the budget that you think will be most difficult for you to stick to, try this: take that money out of your account and put it in a labeled envelope. Keep the envelope in your room and take cash from it very sparingly. Using only cash will make you much more conscious of just how much you are spending, and keeping it at home will give you less of a chance to be impulsive with it. For more tips on staying on budget speak with an accountant or financial adviser
LBS Tax is a local tax accountant service that has begun a series of helpful articles to help the public better handle their financials.