Mismanaging cash can quickly become a vicious cycle that denies you your financial goals and freedom. In a way, misspending your money is no different from stealing from your future self. It may not feel like it at the moment, but each time you squander cash, you take a few steps further away from financial freedom. Below are a few tips to help you break the cycle and become the true master of your wallet.
1. Learn Your Triggers
If you want to learn how to stop spending money, the best place to start is to identify your crucial spending triggers. Time of day, hunger, anger, and influence are just some triggers that get people splashing on things they had not budgeted for. Speaking of budgeting, you should design one if you have not already. A budget is a great starting point for creating financial goals to keep you focused on the bigger picture.
2. Learn to Invest
We all have that moment of weakness when we are tempted to spend money we had saved for a rainy day. It is easy for our minds to play tricks on us, convincing us to spend our savings. Investing is a great way to make money out of your control, so you do not feel tempted to spend it. Learning how to invest is easy with countless resources available online. In addition, making investments saves your money from losing value to inflation.
3. Make Spending Real, Not Virtual
It’s time to go analog. Say goodbye to credit cards and hello to cold, crisp cash. In reality, it is easier to whip out your trusty credit card to pay for a purchase than to take out a wad of cash and count out individual bills. Counting out the cash you spend on different purchases will help you realize what you spend. In addition, spending your money in cash will make it easier to track your spending for accountability. Credit cards make it convenient for us to forget poor spending habits; after all, out of sight, out of mind, and ignorance can be bliss.
4. Set Short-Term Financial Goals
It is easy to lose track of long-term financial goals in the heat of the moment. Why not break down your long-term goals into smaller, quantifiable ones that are easier to achieve? A personal budget plan is vital in creating and sticking to financial goals. A financial plan is a visualization method for remembering your financial goals when tempted to buy something you have no business buying.
5. Assign Every Dollar a Job
Have you been eyeing a managerial position at work? Here is your chance to start practicing. Imagine each dollar in your account is an employee with a job to do in a specified amount of time. Your job is to make sure each dollar does its job and to make suitable adjustments in case of unforeseen events. This strategy will leave you with no money lying around, just waiting for you to misuse it.
The bottom line
Do not forget that these strategies will not work without discipline, dedication, and determination on your part. Your financial freedom is solely in your power. Keep your eye on the ball, or should we say, “eye on your wallet.”