Tips To Take Charge Of Your Spending
* Re-posted from March 2013
The pressure to spend is everywhere…and it’s intense! You can hardly have a conversation with your best friend or watch your favourite TV show without feeling you need to spend money on something!
But before you part with your hard earned dollars, I want you to really think about what, where, why, when and how you spend. Here are some quick tips that might make you think twice about buying that new iPhone you’ve always wanted…
Align your spending with your values and goals
This will help you get the most satisfaction out of the money you spend. When you know what’s important to you and what you want to achieve, it becomes clear what to spend your money on. Nobody can or should tell you what to buy…you must make that decision yourself.
Know The Difference Between Your Needs and Wants
Sounds pretty basic…but often, we forget about the distinction. Spending on needs must come first. If your sales job requires you to drive all over to meet your customers, a car becomes a “need”. But if you live and work downtown, maybe a car becomes a luxury you can’t afford. Likewise, you may need to look professional for your office job but do you really need that 4th pair of new shoes to make a great impression?
Make a Spending Plan
I know you are rolling your eyes now! Believe it or not, this helps you feel confident and empowered with your money. You will get lots of benefit by simply going through the thinking process and putting your budget down on paper. It may take you many tries to get to one you are comfortable with but its worth it. You gain a much better understanding of how much things cost, what you spend money on, tradeoffs you must make and what you might want to do differently. It can stop you from making financial decisions that you will regret tomorrow!
Monitor Your Spending In A Way That Works For You
This does not need to be a long, painful exercise or an exact science! Once again, its the effort and thought process that matters. One option is to monitor key areas that you are concerned about like entertainment or dining out. Another option (for the analytical types) is to use an on-line program like Mint.com to track detailed expenses. Yet another idea is to record your spending in a notebook for a few months to get a better understanding of what/how much it is.
I’m sure none of my ideas are new to you, but the challenge is to actually make them happen. Set aside some time in your calendar or do whatever it takes to get clear about your spending. One day, when you’ve saved enough for that dream vacation to Costa Rica, you’ll be glad you did!
Proud founder of this blog Let’s Talk About Money, Patricia Gass, CPA, CA, provides personal finance coaching and education to help improve your money skills