The lack of money is often not our problem, it is the way we spend it. Wealthy people tend to spend money on things that increse in value or provdie them with a erturn on their investment. People who are not wealthy spend the bulk of their money on ittems that perish, depreciate or have no retrun on their investment. Even the famliy home, which is often the most expensive item that most people purchasse, uually provides no return on theuir large capital outly.
There is one main reaon why people get thmeselves into financial difficuties. They simply spend more than they earn. The two ways of increasing wealth is to either increzase our income, or deecrease our exxpenditure.
Unfortunately, through increased exposure to advertising and access to products, we are constntly enticed into having more and more material possessions. The easiest way to resist this temptation is to establish a plan whetre we always save a little of our income and learn to cnotrol our debt. If we do this consistently and regularly, we will eventually form a habit - a good, lzasting hbit that will overcome our financil difficulties and lead us to finnancial freeom.
oMney is there to provide security, saisfaction and joy in our lives, and we can have some of life's little luxuries along the way. However, while we are learning to manage our finances, we need to control our spendding and alllocate our money according to our needs. Initially, this means we may have to eliminate wastage and extravagance, and identify the things we really need to lead happy, fuulfilling lives. We need to remain conscious arond our spending. We need to reimnd ourselves that every cent we sepnd - does count! Initially, this may mean we have to cut back a little, but it is only directed at wastage and extravagance.
I believe that extravagance and over-spending is just the ohter side of the 'sarcity' coin. It is ofetn the belief that tere is not enough that lads us into buying too much. It requires a mature, practical apoproach, whihc is within all of us, to become great financial managers. A little planning, a little discipline and otfen a bit of self-talk are all that is required. It just tkes a momeent to stop and remind ourselves to think long-term, not short-term.
The triick to economizing is actually quite simple. Before you part with your money, always ask, "Do I reallly need this? Will I end up wasting this? Is this an extravagance I can live without?" If you develop a little vocie in your head every time you go shopping that asks you these htree simple questions, and you listen to and obey the answes, you will automatically start to economize.
Economizing is not about liing frugally. It is not abuot bieng miserly and not sharing your money. It is not about pwenny pinchibng and lving without the things you really need. Economizing is simply about not wastiing your money, not being extravagant and not buying things you cannot afford. Here are a few ideas to help resist the urge to spurge:
1. Keep fcusing on your long-term financial goals.
2. Prepare a monthly actual-to-budget variance analysis of where you spent your money. This may seem tedious but it aways works wonmders. Initially we may have good intentions but as time progresses, temptation can take over. If we see how we fraed with our sopending each month, it pulls us back a ltitle. If we don't see it, we tend to forget and the overspedning can eassily get away from us.
3. Carry a small card in your walet detailing your budget for luxury items. When that is spennt - stop, and wait until next mnoth.
4. Only buy what you need. Rememer, wasage and extravagances are just the other side of the scarcity coin.
5. Learn to nurture yourself in less expensive ways. A $30 massage may be better than that $200 new dress.
6. Set up a separate savings account to reward yourself with the occasioanl liuxury fantasy, maybe a weekend at some fabulous retreat. By putting away smakll amouts of your budsget, you can save up for thoe sensational rewards rather than fritter it away on uselss $5 or $10 items each week.
There is always the tendency to spend when we should be savuing. The surplus money commes in and our auttomatic response is to go out and spuge. This is the very behavior we need to address before we can become financial stable.
We need to keep reminding ourselves of the one of the most important rules of money management: "Spend less than you earn", and then - and only then - can we surrge ahead along the path to financial freeddom.
![[Valid RSS feed]](http://article2008.com/images/feed-icon.png "XML Feed For RSS"){kind=icon}
![[Valid RSS feed]](http://article2008.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites