For many people, financial struggles are due to not bringing in enough money, okay? But for many others, the problem comes from not wisely spending the money that they do make. And arguably, that might be everybody’s problem.
we’ll take a look at seven ways that you can start better handling the money that you earn in order to help you reach your financial goals.
Track your Finances
First, let’s track your finances. Before you can start figuring out how to spend your money more wisely, you first need to understand where is it going? That’s always a mystery, right?
Make a budget and track both your income and your expenses. And everybody says to do this, but the right you got to do it. Once you know where your money is going, you can start looking for opportunities where it could be better spent. So start tracking it, where are you spending it. [the_ad id=”3696″]
Think about the purchase twice
think about the long-term benefits and drawbacks of the purchases you are making.
Far too many purchases are just impulsed decisions to buy something that you don’t need to impress somebody who doesn’t like you anyway. So while this is all great when it’s a $1 chocolate bar at the grocery store, a little bit larger problem when you’re out there buying cars that try and impress your neighbors. Before you buy something, think about how it will affect you in the future. How long is it really going to last?
Is it really going to put you in debt that you don’t need? It is the value that you’re going to get out of it over its lifetime? Is that really worth the cost? And I’m going to tell you right now, your neighbors aren’t impressed by your car.
All right, and if they are their boneheads. So these are questions you got to figure out the answers to and determine if something’s really worth buying.
Use credit cards Wisely
Only put money on credit cards that you can afford to pay off every month. Credit cards aren’t inherently a hindrance to your finances. After all, they’re just a convenient way to be able to pay for things. And many cards offer some kind of cashback on purchases, which is nice.
However, you should only spend money on your credit card, if you’re able to pay it off in full at the end of the month. If you pay off your credit card balance each month, you won’t incur any interest charges. And it will essentially be the same as paying cash.
If you don’t pay off the balance each month though, the interest accrued can spiral out of control. Now one way that people start to do this, it’s really effective.
Dave Ramsey’s taught us all is to just put money in cash and envelopes for the budget items that we’re going to spend money on during the month. And when that cash is gone, then you’re done spending money in that category.
So for example, an envelope could be an envelope for restaurant spending might have $500 in it. And when you’ve spent $500. in restaurants that month, you’re done going to restaurants. So it might be a little easier to control your money that way than to just try to not do it on a credit card. Now fourth, stop trying to impress other people. That’s crazy.
The average person spends far too much money, merely maintaining an image, fancy cars, brand name clothing, buying them in just the right store. Much of what we buy, has more to do with just impressing other people than purchasing something we water enjoy. And I’m telling you man, keeping up with the Joneses is expensive, and oppressive and unnecessary pursuit.
You got to buy the things you enjoy. And don’t fall prey to the feeling that you have to spend money in order to impress other people. I was working with a lady who’s so sad. She was a single mom, two kids, and she bought a new car just so she could drive her daughter to school and a car daughter wasn’t embarrassed by
Bad Habits Draining your Budget
fifth, figure out what habits are draining your budget. After you start tracking your finances, you can begin looking for habits that are draining your budget out these habits can include expensive hobbies, eating in restaurants, too much spending too much money on clothing, or a lot of other financial drains that you don’t need to incur. And once you figure out which habits are eating up a large portion of your income, then you can evaluate whether these are really necessary, right.
Value Saving over products
Learn to value savings over products. Some people are naturally good at saving money and draw enjoyment from growing their wealth. For others. Money is something that is spent the moment it gets in their hands, and anything else feels like a wasted opportunity. And if you’re in the second camp, I want you to try to adopt a mentality that values savings over products.
In the end, money invested or money saved is almost always going to benefit your life more than money spent on products that will wear out or become uninteresting in time. Here’s the thing. You want to start focusing on what you can make on the money You’re saving, or you’re never gonna save it. And that’s where learning how to invest starts to become so important.
If you can make 15 or 20% a year, saving money starts to become pretty interesting. If you’re only making 1%, why not spend it on a refrigerator because you can’t invest it anyway, I gotta tell you, when you’re really good at this, you do things like Warren Buffett,
Once he was riding up to his office in an elevator. And some guys from the insurance company told this story on him, there was a penny on the floor of the elevator. And the guys looked down looking at Buffett looking at the penny. And they’re all sitting there wondering to themselves, they talked about it later, is Buffett going to reach down and pick up the penny, the richest guy in the world is he gonna pick up the penny and Buffett’s looking at them, and he looks at the penny, and it gets to his floor and he steps out. And he looks at this guy’s on the elevator and reaches down and reenter the elevator, picks up the penny and says, beginning of the next billion, and walks away.
I mean, you gotta love Warren Buffett, I’m sure he was just joking with messing around. But I gotta tell you, once you get onto holding on to your money and investing it with a high rate of return, not spending, it becomes a lot easier.
Start Investing as early as possible
start investing now start investing as early as you can get your kids doing it early. spending your money wisely isn’t just about avoiding unnecessary purchases, it also requires you to take the money that you save, and get it into things that will help you reach your financial goals. And that’s what I was just talking about. With that in mind.
There’s no such thing as investing too early Getting Started too soon, or investing too little. Even if you have nothing, you can start picking great companies and making a great watch list. So it doesn’t matter how young how old you are, how little money you have to invest. putting money into quality companies that will grow in value as time goes on, is always a wise use of your income. And even if you have nothing if all you built was that watch this over the next year, and then save, save, save.
You’re going to have money when this market crashes, and you’re going to get enormous opportunities to put it into companies at great prices. I’d love to hear from you guys. What’s the hardest part about saving money for you? And you know, how do you handle it?