When it comes to your money, who’s in control of whom? In other words, do you take charge of how you allocate your funds or do you allow your money to nudge you until it’s all spent? If the latter is true, you could be putting roadblocks on your path to financial freedom by allowing your cash to control its flow, while being in cahoots with notions like thinking you deserve expensive things, surrendering to unhinged cravings or succumbing to a need to impress others.
Our attitudes about money and acquiring stuff can shape the way we spend and save, but there is hope for everyone. We’ve identified some specific ways you can positively adjust your money attitude, from the way it’s spent to its role in your life. By adopting these approaches, you can significantly impact your ability to save more while making the most of what you have.
See saving as an opportunity
When you approach a plan to save money, what goes through your mind? Lots of us face the thought of saving with a sense of dread because we believe we are giving something up. But the truth is, saving is not a sacrifice. It’s an opportunity.
Saving is your chance to have a cushion beneath you — should life hurl some unexpected expenses your way. It’s the prospect of achieving your goal of traveling to far-flung lands, buying the home you want or starting a family of your own. It could even be your big break to achieving your dream of retiring early, giving back to your community, traveling or continuing your education.
Turn “should have” into “you could”
We work really hard for our money, so it’s easy to convince ourselves that we should have a luxury car, should have a massive television or should have designer jeans. But the fact that you worked hard for your funds is the exact reason to exhibit more discretion on what you spend it on and how much of it you save.
When you add money to your savings, you’re essentially paying yourself by investing in your future. With your savings you could be financially free, you could send your kids to college and you could make handling the unexpected a breeze.
Next time your inner-dialogue says you should be able to spend your money freely and frivolously, counter those thoughts with imagining what you could do with that money when it accumulates down the road. Will that item you want to buy now continue to improve your life in the same way years from now?
Learn to identify minor expenses as slow leaks
Sure, daily drive-thru runs for breakfast or afternoon snacks may cost just a few dollars. But do it day-in and day-out and that cost can skyrocket to $200 or more a month. Or, do you head to the grocery store on your way home every day to pick up a few things — inflating your grocery bill to twice its size? To identify slow leaks like this, we recommend using a spending analysis app like FAIRWINDS Money Management. It will lay it all out for you, so you know just how much of your paycheck went into that drive-thru window.
Once you’ve identified your leaks, you can use them as an opportunity to make a small adjustment and add a big boost to your savings. A big portion of what you overspent could go into your savings by spending less on breakfast and snacks at home, as well as pre-planned grocery runs one to two times a week.
Save first and spend what’s left over.
Get in the habit of paying yourself first (by contributing toward your savings) before forking over any of your paycheck. Sitting down and calculating your monthly budget will help you determine how much you can reasonably set aside, and still be able to pay your bills and have a little discretionary money left over. It’s important to be realistic about how much you can save, so you don’t set yourself up for failure.
Be patient with yourself and your progress.
Warren Buffett once said, “Someone's sitting in the shade today because someone planted a tree a long time ago.” In other words, your efforts will pay off over time. Saving money and achieving financial freedom is a long game. It takes effort and patience. However, your patience shouldn’t be focused solely on the end result. You should also be patient with yourself. There’s bound to be a bit of a learning curve. Especially if you’ve been a free-spender your entire life. Forgive yourself for slip-ups and keep your eye on the end-result.
Need help putting together your budget or savings plan? Stop by one of our branches and talk to a crewmember today.