Spending money is easy but saving and making money, on the other hand, is hard. We all know this feeling- walking by and seeing something cute or cool in a store and wanting to buy it. It can go two ways. One, you give in to temptation and purchase this item or two, you walk away knowing full well you need to save.
Which situation do you find yourself mostly in? If you find yourself in the former situation a lot, and end up accumulating debt, then you need to do something about it. Financial management- whether you are a billionaire or a medium-income earner- is crucial.
The more money you have, the harder you will fall if you don’t manage it properly.
The less money you have, the more prudent you need to be when spending.
Either end of the spectrum you are in, you would need to be financially savvy. So what do you do? More often than not, financial prudence needs a mindset shift.
Start with a list
To see where you are spending your money, you need to write it down- whether it is on an Excel sheet or a ledger. You want to list down all the spending habits that you make regularly. Monthly expenditure such as rental or bills aside, you want to list down the daily things you do like purchasing cups of coffee or going online to make a purchase.
Next to these little spendings, create a list of suggestions on how you would go about changing them.
Focus on changing one spending habit at a time and start working on changing that. Once you’re done, move onto the next habit and slowly work your way through the list. More often than not, it’s the small purchases we make that we think ‘Oh, it’s no big deal’ that accumulates and eats into your savings or your credit card debt.
See Your Failures as Lessons Instead
Failures along the way are an inevitable part of financial success. Like a rite of passage. It is something that you must go through to achieve success- victory will be much sweeter and more meaningful. Think of the spending failures you encounter along the way as lessons that are going to make you stronger, build your resolve and make you a more determined person to save more and spend less.
Saying No to Temptation
It is probably going to be the most challenging phase for a lot of people. If temptations were so easy to resist, self-discipline wouldn’t be such a struggle to accomplish. Here is where the power of no comes in again. Each time you say no to something that is tempting you to spend, your self-discipline and financial prudence grow stronger. Each time you don’t give in to your desire, you walk away a little bit stronger and a little more disciplined. So keep at it and keep the momentum going, this is how you’re going to build your resolve over time.
Avoid Last-Minute Decisions
Leaving purchasing decisions to the very last second can often result in you making the wrong choices and spending more. This is why you need to now start making it a point to decide on the items you want to buy the moment you know that there is a purchasing decision to be made. Learning to make prudent financial decisions as you go trains you to have better self-control along the way too.
For bigger purchases, you want to calculate them ahead of time and see how much you can spend and how far you can stretch your budget. Can your credit card handle an upcoming purchase or have you saved enough to afford this purchase? These are the kinds of questions you need to ask yourself ahead of time.
Knowing your financial codes and fees
Part of instilling financial discipline is staying updated on how much you have. You don’t want to run into the situation where your card gets declined. It helps to get an overview of credit card decline codes just so you know if the decline is caused due to your card expiring or if you’ve reached your credit limit. It’s all part of staying informed of your financial capacity. Knowing bank limits on transactions as well as fees incurred for bank accounts and cards can help you manage your affairs by either cutting down on the number of cards you own or moving to a bank that serves your financial needs.
Self-Discipline is Part of Being an Adult
Nobody said being an adult was easy. We have to do things we don’t always necessarily like, but you know what? We survive. Adults don’t wait around for people to tell them what to do and what not to do. The beauty of being an adult is that we have a mind of our own, we take our lives into our own hands and we make choices and financial decisions for ourselves. As adults, self-discipline is the driving force that keeps us going, pushing us through those uncomfortable moments in life. To train your financial discipline and build its strength, you need to push yourself to do the uncomfortable things you would rather not do instead of waiting for someone else to force you to do it. Taking that proactive step, that initiative to do it on your own is how you build your financial prudence over time.
Setting Smaller Financial Goals
This is the key to start building a better mindset for yourself. Not only is this a great way to start cultivating a positive financial balance, but it is also great for helping you overcome temptations. When we set big goals and we fail to accomplish them, they can be a big emotional hit for many. Feeling discouraged, we lose the drive to keep on fighting and moving forward. Eventually, it becomes easier to spend because we simply don’t feel like facing another possible failure yet again and prefer the instant gratification of our purchases.
You need to set small financial goals with smaller, more doable steps to accomplish these goals. It is a much better strategy because each time a goal gets smashed, it will fuel your desire to do better. It will make you want to do more, and eventually, your mind starts to believe you are capable of anything. When that happens, procrastination fades away and becomes a problem of the past.