Finance Menu
Banking
Bankruptcy
Career/Work
Education
Family/Home
Insurance
Investing
Loans
Real Estate
Retirement
Taxes
Articles
Resources
Reviews
Sitemap
Videos
Examine Your Spending Habits
Most people don't fall into a pile of debt overnight. It takes time to rack up credit card bills and get behind in house payments. The key is managing your spending habits before things get out of control in the first place.
Take a look at your spending habits. Each of us is either a spender or a saver. There are distinct characteristics for both types of people.
Spenders love to buy things. They go with their first impressions. Impulse buying is their specialty. Not allowing time to think about a purchase before making it leaves them with stuff that they could have done without. Spenders live for today with little thought to the future. Why save when you can be happy now?
Savers are on the opposite end of the spectrum. They think about the future all the time. In fact, they give more thought to the future than they do to the present. They sacrifice to the point of piety. Enjoyment of life is not in their equation. The sad part is that they may not even enjoy themselves when they reach the point in life that they have been saving for. A penny saved is a penny earned.
Striking a balance between the two polar opposites is the best character trait to possess. While we should think about the future, we mustn't obsess to the point that the present holds no meaning other than to service the future. Money is a means to live life to the fullest, but not the only one.
Start with last month's purchases. Look at bank statements, credit card statements, and ATM receipts. The ATM machine is usually the fastest way to overspend. You put in your card and it spits money out at you. Most people don't even ask for a receipt. At least if you had one, the amount could be recorded later when you returned home.
A budget is the best way to keep an eye on your money. Know what you have allotted to each category and stick to it. After the first few months you will be able to fine tune the line item amounts. Don't cut yourself to the bone, thus making a budget hard to follow. On the other hand, don't give yourself so much leeway that you go over budget every month.
Do you need that new sweater? Check the closet. There may be a clothing item or two that still fits and looks good. Visiting the mall just to "window shop" is too strong a temptation for the big spender. Instead of walking out empty-handed, they'll pick up a few things that were on sale.
If ATM's or debit cards are a problem, carry cash. Make one withdrawal a week for groceries, gas, and other incidentals. When the money is gone, that's it. Writing checks for bills encourages you to track them in a ledger or electronically. Using cash may seem antiquated in today's society, but it is still the best way to keep track of your spending. Receipts can be kept until the end of the month and then reconciled.
Taking the time to see where your money is actually going can help to curb those spending habits. Try to spend a little and save a lot each month. Hold out for those things that you want to see if you still want them a month or two from now when you have saved up the money.
Subscribe to "Your Finances."
Our monthly personal finance newsletter, helping you with your finances.
Don't worry--your email address is totally secure.
I promise to use it only to send you "Your
Finances."