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Over the years I have become persuaded that spending money has assumed the status of a hobby for many people. These individuals spend everything they have, in addition to buying things on credit or borrowing to fund their lifestyles. Uncontrolled spending is a recipe to financial ruin and disaster.
The onus is on everyone who desires to build wealth to control their spending habits and not give in to the urge to spend everything they make and more. Here are ten things you can do to keep a tighter rein on your finances:
Pay yourself first
Before you start spending to pay your bills or other expenses please ensure that you take a portion out of your income and keep it aside for investment purposes. This could be anything from ten per cent or more. This should be kept in a separate savings account to be used for investment or to take advantage of opportunities. What most people do is to pay their bills before thinking of paying themselves, thenat the end of the day they have nothing left to invest. Keeping this money aside means you have less to spend.
Embrace Budgeting
A budget is simply defined as a document that tracks the inflows and outflows of your money. The good news about budgets is that it gives you the advantage of planning what you will spend your money on in advance. When you have a plan on what to use your limited income for you are less likely to have any money left to spend on frivolities or unnecessary items. I use a monthly budget and I make sure to write down what I would like to spend money on before the money even comes. There are many budget templates online that one can easily use to track your spend.
Read also:https://businessday.ng/personal-finance/article/mastering-the-art-of-spending-money/
Spend more on your needs and less on your wants
This means that you should only spend money on those things you cannot do without, while postponing to a later date things that you can do without. Building wealth requires discipline and there is no greater challenge than seeing what you want and not been able to purchase it even when you have the money. So before you make that next purchase confirm if it is a need or a want, then go ahead and spend on the former while postponing spend on the latter.
Account for your money and review your expenses
So many people cry at the end of each month that they do not know where their money went. It is quite commonplace to hear people say they had a certain amount and now that it’s finished they don’t know how they spent it. This is why I advocate you keep a journal or a diary and write down at the end of each day the sum total of your spend. Just looking at your expenditure over a period of time will show you your spending patterns and areas where you could make cuts and savings. Stop relying on guesswork when it comes to your money.
Make use of a joint account
Sometimes in order to be able to control your expenditure you will need to keep some funds where you cannot easily gain access to it, with the joint account being the perfect tool for this purpose. Opening a joint account with you and your partner being signatories means that both of you will have to sign approval before withdrawals can be made. This will make it a bit difficult for you to access the money because your partner will have to be convinced of the need for it before they give approval. Joint accounts are not the preserve of married couplesonly, even friends can come together and open one.
Stop carrying ATM cards and unnecessary cash around
Carrying money and your bank cards everywhere you go will derail you from the objective of controlling your expenditure. This is due to the fact that whenever you have them in your possession you always see something you want tempting you to buy it, and before you know it you would have succumbed. But if there was no money on you at that time you could have foregone that purchase. It is best to carry only a small amount and keep the cards at home if there is no prior plan to use them before leaving.
Avoid going to places that trigger your desire to spend
Just like a recovering addict is not allowed to go back to the places he used to frequent if he really wants to break free, so also if you want to control your expenditure then understand what triggers you to spend and try to avoid them. It could be certain friends, or even certain shops where you almost always spend. Do your best to distance yourself.
Curb your taste for the finest things in life
We live in a world where people desire to acquire the most expensive and exotic items they can find even when they can’t afford it. This is the norm even when there are cheaper and more affordable substitutes. Must you own the latest smartphone, drive the latest car, or wear the most expensive apparel? Certainly not. You can still look good at a fraction of the cost of getting the most expensive things and most people wouldn’t know the difference.
Stop using debt to fund your lifestyle
In other words live within your income and earnings. Do not take loans to purchase things that do not produce wealth or additional income. The place of debt is that it is meant to be deployed into activities that will yield even more income for you. Debt is not meant to be used for things that will not produce for you.
Learn from your money mistakes
Nobody is above mistakes. Everyone has made them and will still make them where money is concerned. The importance of writing down your expenses and reviewing them will present useful information on how you spent your funds. Once you detect the areas where you missed it make amends by resolving not to make that same mistake again and take action towards your resolve. Mistakes are huge learning curves we all must go through if we desire to improve or become better at controlling our expenditure.
The current economic situation has made it imperative that we all tighten our belts and take steps to better control our expenditure. You can no longer afford to survive without seeking for ways to save more, spend less, and get more value from your income. Controlling your expenditure successfully gives you a better chance of building wealth and thriving during these economic hard times.
Kenneth Doghudje
