According to
a recent research study conducted by Visa USA, Americans are just NOT paying attention to where they are spending their money! There is no question that they are spending it, but things get fuzzy when they start trying to quantify where and how much cash they actually spend. According to the study, the people that "lose" cash each year (almost 1/2 of Americans), manage to lose more than $2000 during the course of a year.
Without a doubt, the move to a more convenient, virtually cashless society is a time saver. Unfortunately, our savings of time may be costing us money and lots of it! Is it possible to find a balance between responsible spending and convenience? Absolutely! A little bit of planning and some regular attention to your finances will help you spend you money more deliberately than ever before. These super secrets will give you a great start...
1. Make a definite distinction between what you need and what you want. In reality, your only absolute necessities are food, shelter, clothing, transportation and medical care. Mind you, you need BASIC food, BASIC shelter, BASIC (yet appropriate for your work situation) clothing, BASIC transportation and BASIC medical care. After you have your finances in order, you will have plenty of time (and money) to upgrade these areas of your life.
2. Use a written budget.This does not have to be an elaborate, complicated document. In fact, the more complicated it is, the less likely you are to follow it. Start by listing all your income for each pay period. Then, list all your expenses for the pay period. If you have never created or used a written budget, there are plenty of budget forms available on the internet. One basic form that is free and easy to understand can be found at the
Better Budgeting web site.
3. Use online banking services. This is an excellent way to track ALL of your expenses. You can check your account balances as well as viewing all transactions that are made with credit and debit cards associated with your accounts. You no longer have to wait for a paper statement to see what your financial situation is and checking your accounts online will help you monitor your accounts on a more regular basis.
4. Make your purchases inconvenient. In other words, if you have to work a little bit to buy something, you will limit your impulse purchases as well as thinking about whether or not you really want something before you get it. For example,
- Take your credit cards out of your wallet.
- Stop your home delivery of your newspapers and go somewhere to buy one on the days you have time to read it.
- Stop all "automatic renewals" on your subscriptions and memberships.
- Carry large bills so that you will be less likely to break them for small purchases
- Don't buy things from the Internet or TV that you can go get. If you have to make a physical effort to go get it, you will be sure that you really want it.
- If you see something you want and you had not planned to buy it, wait at least 24 hours and go back to get it. You'll know you really want it if you are willing to go back and get it.
- Buy things that you cannot return.
5. Stay home. Purely and simply, if you are not out, you are less likely to spend money that you didn't plan to spend. Designate 1 day and/or night per week that you entertain yourself and your family at home without spending any money. This can become a very important time for your family WHILE it helps you to discipline yourself with your spending.
6. Plan your menus and your grocery shopping. More than likely, one of your biggest expenditures in general AND one of your biggest unplanned expenditures is food. This expense can be drastically reduced with some advance planning. Start by limiting the number of times that you will "eat out" during the week. Then, plan your grocery shopping accordingly. Planning your menus does not have to lead to elaborate cooking and cleaning routines. It only has to provide a framework that makes you more aware of what you are spending on your overall food bill.
7. Use an envelope system to pay cash for some things. There are lots of ideas about how to budget but the envelope system is one of the oldest. Also, it is one of the easiest to implement because it is very visible and tangible. Using an envelope system means that you "prepay" certain spending categories with cash from your paycheck. For each category, you label an envelope and put the budgeted amount in the envelope. Between pay periods, when you purchase something from that spending category, you use the cash in that envelope. When the cash is gone, you may not purchase anything else in that category until the cash has been replenished (with another paycheck). This method of budgeting and spending FORCES you to pay attention to what you are spending and where. Also, it forces you to make choices about your spending based on your actual cash in hand. To read more about envelope systems and how they work, visit
http://www.envelopebudgeting.com
8. Plan to lose some money. Give yourself some amount of money that you don't have to keep track of. Make sure that you have it set aside in cash and you have it designated in your written budget. You will appreciate the fact that you can use it for whatever you want - no questions asked!
9. Limit extras and add-ons. Even if it's only $2.95 extra per month and they add it to your bill and you never know the difference, those expenses add up. One of the secrets of spending deliberately is to set your spending up so that you KNOW when and where you are spending money. Maintenance plans, extended warranties and any number of "automatic" add-ons are set up so that you forget you are paying them. If they were not automatic, would you seek out that company to give them $4 or $5 extra each month?
With all the convenience of our plastic and online spending capabilities, there is the tendency to pay less attention to where our money goes. It the long run, that will cost us all!
