Good With Money

Most people don’t plan their spending or even think about their money until it runs short or even runs out. As long as there is money there for the essentials they plod along and moan about not having enough for life’s luxuries, e.g. a holiday in Hawaii or a super-car or mansion on the hill etc. but they never really give their spending patterns any thought.

You can be sure that the people who have the luxuries above give a lot of thought to their money and how they spend it. They are unlikely to waste any of their money on things that will drain their bank account and cost them the luxuries we all admire.

So what should you think about when planning your spending and developing a good spending pattern.

Number 1 Sit down and make a list of the most important things that you need to spend your money on. e.g. Mortgage, Food, Insurance, Utilities (Electricity, water etc.), Clothes and transport to and from work. These are the expenses that we all incur in our daily lives and would find it difficult to live without. Make a note of how much each of these cost you and total them up. If the amount exceeds your income, you need help.

In most cases you will find that there is a little left over. That does not mean that you can run into town and buy extra clothes. This is the only money you have a choice about how you spend. That is, you can spend it or save it. If you spend it, spend wisely.

Number 2 Assuming that you have a little left over above, I would reccommend that you take some, maybe half of this money and put it aside. Save it in a bank account or some other account where it can earn interest for you. This is your rainy day fund. All of us encounter unexpected expenses from time to time in our lives. They could be a leaky roof or car repairs or illness or something similar. If you are not prepared for them you may need to borrow to cover these expenses. That is an expensive way of dealing with them. I know that sometimes this is necessary, but borrowing ads interest charges to an already large and unwanted expense. So save a little and do it regularly. You may have to do without something to achieve this but in the long run it will be worth it.

Decide now how much of your weekly wage you can save and save it no matter how tempted you are to spend it on another pink t-shirt.

Number 3 Think before you spend. Do you really need the item you are thinking about spending your hard earned money on. Think about maintenance costs. If you are buying a pet, can you afford to house it, feed it and pay the vet bills? If the answer is no, then you shouldn’t buy the pet or even take a gift of it. Same applies to motor vehicles. They all cost money, but they also cost money to run. A bargain is not always a bargain. If you are buying a car check out this motoring post.

Think before you spend applies particularly if you “come into money”. That is if you get a bonus at work or if you inherit money. Any extra money above and beyond your usual income. This money should be used to the maxa nd not on the latest fashion or power tools unless you really need them.

This money should be saved for a rainy day or invested in something that will give you a worthwhile return. How often have you had an idea for an investment and not been in a position to follow through on it? If you are like me you are always coming up with ideas and are unable to do anything with them. Now is your chance, so don’t blow the money on rubbish that will not help you in the medium or long term. After all, you don’t want to look back in a few years and kick yourself for not even trying to do something constructive with the money.

Number 4 Not sure that this one should be so far down the list, but it’s about changing your attitude. Your attitude to life will make a big difference to how much you enjoy it. I am not just talking about the cup half full and half empty stuff, though that is important too.

I mean when you walk on the street going to work or shopping for groceries etc., do you enjoy the sun on your face and the birds singing or do you walk with your head down frowning at the footpath and hating the hassle of having to do this chore, thinking, “I bet Bill Gates doesn’t have to do this.”. I think he probably doesn’t but so what. You are not Bill Gates. It does not mean that you can’t enjoy the life that you have. Worrying and complaining about the little things will not make you any happier. Will it?

Think positively. That does not mean walking around repeating to yourself, “I will get rich. I will get rich.” etc. That only focuses your mind on what you do not have. You should be glad of what you do have and work towards improving your lot a little at a time. Improvement rarely comes overnight. But, after a few years of gradual improvement and moving towards your goal, you can look back and see just how much improvement there really has been. If you take a negative attitude to your life, it will be difficult for others to take an interest in you and it will also be difficult to motivate yourself to make the effort needed to improve your life.

Number 5 Shop carefully. When you do go to the supermarket for food. Don’t just fill a trolly with everything you meet on your journey through the lanes. Make a list before you go and try hard to stick to it. Also, if the shop you frequent has different sizes in trollies, use a small one. When we go shopping we somehow feel compelled to fill trollies. This is one of the reasons that the supermarkets supply the huge trollies that we see there. Take one of the smaller ones and you will not spend as much and will not have a huge gap in front of you asking to be filled as you walk around. There is often a variety of similar products at different prices. If when eating them you can’t tell the difference between the cheap one and the branded one, then buy the cheap one. They are sometimes made by the same manufacturer.

I used to sell shirts in a mid range mens shop. One of our suppliers’ representatives told us that a line of shirts that we were selling was being sold in a “cheepo shop” nearby for much less. The only difference was the label. They simply changed over to our label during the production process. So it clearly pays to shop carefully. For more of our shopping tips.

Number 6 Treat yourself occasionally. You need to reward yourself for your good efforts from time to time. NOT ALL THE TIME. Life would be quite dull if there was nothing to look forward to in the short term. So give yourself a little pat on the back and tell yourself “Well done” when you deserve it. You can cook yourself a special meal or something small. If you have been sticking to the numbers above, you will deserve it.

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