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Smart Money Management Requires A Shift In Attitude

21 December 2009 One Comment

Making the transition from a heavy spender to a heavy saver for the sake of financial independence can be a tough change for many people.  There are countless systems, tricks and methods that people implement in the name of changing their financial habits.  Like most people who are trying to lose weight, these systems or plans rarely end up working out.  I believe the reason for this is because something bigger, something deeper is required to change in order to implement lasting change, whether you’re trying to lose weight or you’re trying to stop spending so much money.

You can find a million budgets or spending plans available on the internet for you to implement, and each one is guaranteed to make you rich!  I’m kidding.  Seriously, everyone has an opinion on how much you spend on housing or how much you should spend on food each month.  All that is nonsense.

While putting a budget in place can offer some assistance, it rarely sticks.  You might have a month where you drastically change your spending habits, but in most cases, the next month reverts back to the norm – the norm of over-spending.  In order to have a lasting impact, you need to change the way you view money and the way you view spending completely.

Many people are careless spenders because they don’t assign real value to their money.  They never even take the time to ponder what the value of their money is.  Furthermore, they rarely consider what that money cost them – normally, their time and energy.  If they thought about how much time it took to earn $1500, they probably would be less likely to dump that $1500 (or 2 weeks of work) into a brand new TV.

Tips To Help You Shift Your Attitude

1. Track Your Spending For A Month

This is so crucial.  You need to see a black and white picture of where your money goes each month.  Do you spend $1000 a month on food?  How about shopping?  You will likely be surprised at where your money goes.  You have to understand this before anything else.

2. Plan Your Spending

One of the smartest things you can do is to plan your spending in order to avoid unplanned spending.  You will see a nice drop in spending simply from doing this.  Plan your meals for the week and buy the necessary items for those meals, and only those meals.  Stop buying things on the fly.

3. Stop “Shopping”

Don’t goto the mall (or wherever) anymore just to “shop” – as point #2 says, plan your spending ahead.  Shopping is recreational that turns into spending money on crap you don’t need.  Avoid it completely.

4. Challenge Yourself To Save Every Dollar Possible

It’s amazing how little we actually think about what we’re buying.  We often buy more expensive items out of convenience or emotion and don’t even think twice about it.  For example, buying a Starbucks drink is entirely emotional each day.  There is something that makes you really want that drink even though you definitely don’t need it and many times hardly even want it!

Start looking at each item you buy differently.  Is there a cheaper alternative?  Why am I really buying this?  If I wait 15 minutes, will I be fine without it?

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