We are not programmed to withstand temptation consistently, so it’s pretty much okay if you get tempted to spend for yourself once in a while. However, if you are the type of person who always falls prey to splurging wherever you go, then you are in trouble.
Has it ever crossed your mind why chocolates, sweets, and drinks often get placed near the cashier at grocery stores and supermarkets? Technically, they are positioned there for customers to see easily, enticing them to buy while waiting in lines.
No matter how small the amount is, spending a few bucks here and there can drain your finances without you noticing. If you don’t control your spending, it will soon backfire and lead you into financial chaos. Thankfully, there are ways you can fix this dilemma. Here’s are the simple ways you can do:
Learn self-control
Once you learn to have self-control and have the discipline to defer instant gratification, it will be much more uncomplicated for you to manage your finances. Even though you have the means to buy the things you want, you must wait for quite a few days to ponder if it is really worth purchasing the item you have an eye on.
If you regularly use credit cards, keep in mind that although it brings much convenience when making a purchase, it requires so much discipline to be used wisely. Whenever you make a purchase credit, ensure to pay them on time to have a positive credit history, allowing you to have a higher credit limit at a potentially lower interest rate in the coming years.
Visit tempting places without bringing money and credit cards
It is easy to get tempted to buy things, especially when you have money at hand to do so. Bringing money to tempting places increases the chance of spending lavishly on impulse rather than on long-term goals.
Tempting places varies from person to person. It may be a coffee shop, bookstore, boutique, or electronics. Basically, these tempting places are those that are filled with your areas of weaknesses. Of course, you can spend some bucks to make yourself feel good sometimes, but you also need to remember you are spending on a tight budget.
Give thought to your needs versus wants
Before making any purchases, always ask yourself whether what you are buying belongs to the needs or wants category. If the thing you are buying is necessary for your survival, it is a need. On the other hand, if you can live without it, it is a want.
Your “wants” aren’t inherently bad, though. They are pleasant and can assist in accomplishing essential goals in life, having fun, or staying healthy.
Map out where your money goes
Plenty of financial textbooks highlights the importance of not spending beyond what’s coming in every month (monthly income). To achieve this, budgeting is necessary. If you are among those who cannot go on a day without a cup of coffee from a cafe, try calculating the cost of your coffee every month, and you’ll comprehend how small splurges can add up into something big.
Keeping your expenses as minimal as possible will enable you to save more money in the long run. For instance, even when you can afford a good apartment with bells and whistles now, choosing something more affordable than this might give you the luxury of buying a condominium or a house later.
Begin saving for your retirement
Retirement should be planned way ahead, and the best way to do this is to put up a compounding investment as early as possible. Whenever a compounding interest is in play, the time value of money kicks in, offering returns not just on the amount you deposited but also in the interest earned on the initial deposit. Hence, the longer the time you invest, the more benefits you will reap.
Pay yourself first
The best way to pay yourself for all the hassle and backbreaking work you’ve done to earn money is to create an emergency fund that can support you on the chances that an unforeseen event suddenly takes place in your life.
Regardless of your monthly expenses in utility bills, groceries, and loan repayment, do not neglect setting aside some of your cash for an emergency fund. Having reserved money can keep you away from financial distress and help you be worry-free in case situations that may require a significant amount of cash emerge.
Get a grip on taxes
Understanding how taxes work is necessary since you will be paying them for the rest of your life. In order to calculate whether your salary would be able to support all your needs and ambitions, you need to know how much you will be making each month after taxes. There are tax calculators online, which you can use to know your gross income, how much it is taxed, and the amount that will be left.
Protect your wealth
Taking a precaution isn’t just an option, but a necessity you need to take in order to protect your hard-earned money. There are some actions you need to consider if you have the means to protect your wealth:
- Buy renter’s insurance to cover your belongings on chances a break-in occurs, or a fire breaks out.
- Look for a financial planner who will guide you in your financial undertakings, ensuring that you won’t lose a pretty large amount of money on wrong investments.
- Shield your money from taxes and inflation by ensuring that your money is earning interest. Embark your journey to investing.
Strictly choose your social engagements
Social gatherings or meetups aggressively encourage splurging money on restaurants, clubs, stores, and other businesses. This is how socialization works nowadays. However, spending a lot of money with your homies isn’t necessary to have fun.
You could look for activities that you can do at one of your houses, where splurging isn’t part of the experience.
Don’t lose heart when you make a misstep
There would surely be rough roads in building self-control in your finances, making you feel as if nothing is working out. But don’t lose heart. Whenever you make one step backward, make sure to take two steps forward.
Rather than beating yourself up for committing a mistake, ponder on the reason why you fall prey to the trick, and come to think of ways to avoid committing it again.
