Most people have a strange relationship with money; even with good budgeting, there rarely seems to be enough to go around. But what do you do when your money burns holes through your pocket faster than it actually lasts in your wallet? It may be time to reevaluate your spending habits and, more importantly, come to terms with how much you can really afford. Here are a few financial tips to get you started!
Highway To The Danger Zone: How To Avoid Spending Money You Don't Have
1. Don’t let the freebies fool you
Countless people have been convinced to initially sign up for a shiny piece of plastic in exchange for a free t-shirt or a light-up pen; before you know it, you’re tearing through Groupon and Amazon like a demon possessed. You wouldn’t make a large purchase, such as a car or a TV, without researching first. Why would signing up for a credit card be any different? Remember that a credit card is a bigger commitment than you think and shouldn’t be decided on in a whim. Researching which credit cards are compatible with your hobbies can benefit you in the long run, as opposed to blindly signing your name away. This is especially prevalent for financially vulnerable college students, to the point where the U.S. federal government has banned credit card marketers from university campuses. No word on a Canadian equivalent to this regulation -- yet.
2. Cash and debit over Credit
It’s painful for anyone to part with their hard-earned money, even if the expenses are absolutely necessary. That’s part of the appeal of credit; you don’t truly feel the money physically leaving your wallet at any point during your purchase. But don’t be too eager to repress that uneasy feeling of spending! By spending what you have on you at that moment, you’re more likely to avoid spending money that you don’t have - something that you might not otherwise notice building up on your credit bills. Paying with cash and debit will make it seem like you got hit hard today, but it’s better than racking up the dollars on bills that you can always ‘get to’ tomorrow.
3. Stick to a budget
Allot a specific amount for every expense you have for that week or month, and don’t be tempted to dip into that amount for other frivolous things. Budgeting on paper helps, and if you’re not the pen-and-paper kind, there are a multitude of phone apps that can aid you on-the-go. If you have $50.00 to spend on eating out that week, don’t go over that amount on your next dining experience. Have an eye out for a new piece of clothing you’ve wanted? Walk away from that dream jacket if it’ll take breaking the bank to have it. Put down the bucket of sweet, guilty-pleasure ice cream if it’s not on your grocery list. And speaking of lists...
4. Lists are a good idea
This is a good idea for visual learners who can work with written cues. Writing a list -- even if it’s for something simple as picking up your dry cleaning, buying pet food and a new blouse for your job interview -- can serve as a visual reminder on the things you are actually set on purchasing. Not on the list? Don’t buy it. Restrain yourself from buying things that are not on your list, as the things you write down on a piece of paper before you leave your house will be the things that you intended on buying, not the things you convinced yourself were good ideas at the time.
5. Never get yourself a reward with money you don’t have
It’s part of human nature to seek out pleasure and comfort after, say, a long day at work or back-to-back coursework. It’s good to treat yourself to a comforting pricey coffee or that new phone case once in a while, but treating yourself after every single accomplishment you make in your day-to-day life will quickly leave you with empty pockets. If you’re really waiting for a big-ticket item, budget and save up for the purchase. Not to mention, if having beers after a day at work becomes a way of rewarding yourself, it will most likely become the new norm for you. Don’t rely on material rewards to re-energize and motivate you, and let ‘rewards’ remain more sporadic than constant.