Now that you’ve changed your financial mindset — and you’re committed to making it a lasting change — here are a number of other concrete ways you can spend more wisely and value your hard work.
· Make a shopping list — and stick to it! For example, grocery shopping makes up a significant part of your spending. Before you go, make a list of what you need. Plan the week’s meals. Then buy only what you need — don’t bother with the “just in case” stuff or be tempted to pick up a few impulse items. …
A need is something that you have to have in order to survive. What some people say they “need” comes as a huge surprise to others. Your view of a need might be fundamental, like housing and food. Another person’s “needs” may include housing, food… and coffee. Determine your actual “needs” and when you consider a purchase, evaluate if you truly need it or if it would be better to put the money you’ll save towards your investments.
Develop the Optimum Spending Mindset
If you’re just joining us, we are I Love Making Money and this is a “Financial Freedom Success Series” that we started on Medium. You can follow us and start from the beginning here.
Comparison shopping, looking for discounts, and even eliminating some spending is important. But at the core of a lasting behavior change is developing the ability — and habit — of making better overall buying decisions.
Remember, we live in a consumer society that “programs” us all to buy, buy, buy. But you can exercise your own control and make your own decisions. For Christmas this year, I’m giving you 25 Days of Money Tips. …
The process of determining your net worth and listing your possessions hopefully made you question a lot of the spending choices you’ve made in the past.
That’s one of the biggest reasons you went through those steps: Not only do you now understand the nuts and bolts of your personal financial decisions, but you also reacted emotionally to your money and how you spend it.
Remember what we said earlier. It’s not how much you make… if you spend it all.
In the end what matters is how much you have left. Even if you don’t make a lot of money, you can live well if you don’t waste what you do earn. …
No matter how much money people have, most people spend needlessly or without thought.
Most people have gone to the store and bought things they didn’t plan to purchase — or even need — simply because they were on sale. Maybe you bought another package of toothpaste when you already have six or eight hiding in various bathroom closets and cabinets. Or maybe, on the other end of the spending spectrum, you bought a new car when your “old” car was just fine… and maybe even already paid off.
To get control of your finances and to get out of debt, you have to figure out what you spend. …
Your net worth, in simple terms, is the difference in what you own and what you owe. (Assets — liabilities = net worth.)
Let’s start with your assets. Assets are cash or items that can be turned into cash.
Bank accounts, stock investments, etc. are assets. If you don’t have an emergency savings account, then I recommend a high-yield, compound interest rate. Axos offers the highest one I have found here.
Your home is an asset, as long as it has equity, meaning it is worth more — in terms of real market value — than what you owe. If you could sell your house for $200,000, and you only owe $150,000, your equity is $50,000. …
You’ve changed your mindset; now it’s time to change your behaviors and build the foundation of your Financial Freedom. To give you an idea of where we’re going, here’s an overview of the process.
The Basics of Getting Out of Debt & Building Wealth:
If you’re just now following our “financial freedom” series, then start here at the Nine Core Truths About Taking Control of Your Finances. Before we move on, let’s talk about how you can “install” good habits. Old habits can be hard to break and hard to change. Here are some tips for changing yours:
· Make good habits easy to remember and do. If you find a way to automate a task or chore, do it! The easiest habits to keep are the ones that are on auto-pilot.
· Reward yourself (in a non-monetary way).
Create a “To” Reward Goal. When you do something that moves you closer to your goal, reward yourself. Connect with friends, take an hour to yourself, etc. …
Creating saving habits and auto-investing habits is the easiest way to become financially independent. The first step is getting control of your expenses and start developing good spending habits. Here are a few ideas to help you create good financial habits.
_____ Keep Your Bills in ONE PLACE. Create a bill drawer (or folder) and put all your outstanding bills and statements inside. That way you’ll never misplace your bill. And before you put a bill in the drawer, review it to check for mistakes. Companies do make mistakes — and you shouldn’t pay more than you should. Plus, reviewing each bill as it comes in will help you stay on top of your financial situation. Don’t be a financial ostrich: Don’t hide from your bills. …
Convinced that behavior is the key to success? Great! Now let’s take some specific steps to help you permanently change your mindsets and some of your behaviors.
Let’s start, as promised, with where you are today. The goal is to give you concrete reasons why you should commit to making necessary changes.
Knowing the answer to the question “Why?” is an outstanding motivator.
Here’s a form to help you understand your personal reasons why you must change and take control of your finances.
To get you started, here’s a sample form we had an actual person fill out. …