One of the simplest ways to change your financial situation is to change your financial habits. Bad financial routines can be a significant source of anxiety. They limit opportunities for people to move ahead in life. By changing these routines, one at a time, you can start to see changes in your life that will be felt. You can put yourself in a different financial situation and can be more in control of your spending…and of your future.
Whether it’s a notebook or an app, spend a month documenting all of your expenses. What do you spend money on? How much of your spending was unplanned? Physically looking through your spending and where your money is going is an easy way to discover ways to change your financial situation.
Often times, people who do this exercise become aware very quickly of some of the steps they need to take.
This is both literal advice and figurative. There’s something to be said for not being hungry when you head to the supermarket. When you grocery shop hungry, you’re more likely to be impulsive. It will cause you go make on-the-spot decisions that aren’t necessarily under the category of “essential.” This same principle is true beyond the grocery store.
Make sure that the shopping decisions you make aren’t being made because you’re feeling impulsive or bored.
This is where we talk again about impulse. Impulsive decisions are sometimes just what you need to get you out of your routine and live a life of risk and adventure. They are also sometimes - often times - the source of a litany of pain and regret. The brand new truck that you feel you’ve earned. The vacation that you can charge and plan to pay off before you fly out. The 84” TV on sale at Costco. Those things will still be there tomorrow. If you wake up tomorrow morning and still think it’s the right decision, maybe then you can take the leap.
By delaying your decision by a day, you not only practice restraint, but you give yourself time to gain perspective and think clearly about your purchase.
For most people, impulsive or excess spending often goes toward food. Because they haven’t planned their meals ahead of time, they’re caught with limited time and a hungry family. A few spontaneous trips out to eat quickly turn into a significant amount of money spent in a month in dining. These unplanned ventures aren’t in our budgets and often perpetuate financial woes.
By planning ahead, you’re protecting your income and setting yourself up for more opportunities.
Cutting down on impulse and improving your abilities in planning and preparing can make financial management much easier. Take spending seriously, and you’ll find that you’re the one who benefits the most.
