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With inflation making all our lives increasingly expensive, it’s more important than ever to keep on top of your spending habits. Making a budget is a great start, but following it easier said than done. It’s one thing to abstractly vow to “cut back on pricey coffee;” but how do you stick to that when it’s 8 a.m. and you need caffeine ASAP? Here are our tips to becoming a more conscientious spender, so that you can cut back on spending that isn’t adding true value to your life.
Figure out where your money has been going
In order to undo unconscious spending habits—like the costs of lifestyle creep—you have to confront some tough questions about your finances as honestly as possible.
The most important question to answer: Where does my money go? Don’t settle for estimates here. Go through your bank statements and look your spending habits full in the face. Then, evaluate which expenses are actually valuable to you, and not some subscription service you forgot about long ago. It’s far easier to eliminate unconscious spending once you bring it out into the open.
Get specific about your money goals
The idea of “cutting back on spending” is abstract and hard to achieve. It’s like saying you want to “learn how to cook” without ever picking out a recipe or buying an ingredients. Instead, you need specific, attainable goals to guide your conscientious spending.
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One place to start with your specific spending goals is to physically write down the things you want to buy before you buy them. Use those bank statements to inform what items make your official “to-buy list.” When you read over items on this list, you’ll be able to make a more thoughtful decision as to what you really need.
Remember, you’re still allowed to treat yourself
Cold-turkey restriction is a recipe for an unhealthy relationship with money. As NPR explains, it’s important to indulge thoughtfully. Ask yourself, “How do I expect this purchase will make me feel? What do I want it to make me feel? What feelings am I trying to avoid by buying it?”
Only you can determine what is truly valuable in your life. Personally, I’ve budgeted enough money for my daily coffee indulgence. For you, it might mean treating yourself to a fancy dinner once a month, or perhaps cutting back on restaurant costs in order to go wild on vacation in a few months. Allow yourself to indulge, especially if these indulgences improve your overall relationship with your money.
When you feel confident that you’re spending only on things you love and not wasting money on things you don’t love, you will make much better big financial decisions. For more, here’s how how much small, daily purchases really affect your long-term finances.
from Lifehacker https://ift.tt/UMdE7ct
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