What makes a person who saves money different from a person who spends whatever they have? The difference doesn’t lie in their budgets, their paychecks, or the cost of living in their area. It all revolves around their way of thinking about money. These three essential attitude adjustments can help anybody to spend less and start saving money.
Contents
Attitude #1: Time is Money
Usually, people approach a potential purchase by asking themselves, “Do I want this item or service?” But people who are successful savers have learned to look at purchases in an entirely different way. They know how much they make per hour, and they look at a purchase in terms of their time.
When they are contemplating a purchase, they ask themselves, “How many hours will I spend working to pay for this item? Is this item worth that amount of my time and effort?” If the answer is yes, then they purchase and feel good about it. If the answer is no, then they put the item down and walk away. A great number of impulse buys can be avoided by just realizing the monetary value of your time.
Attitude #2: Fun Doesn’t Cost Anything
People who save money also know how to have fun without spending money, or at least they know how to spend less. Eating out at a $50-a-plate restaurant can be nice, but couples can have just as much fun on a date getting fast food and taking a walk in the park. Here are some other tips for spending less on entertainment:
- If you have children, arrange a babysitting exchange with other couples instead of hiring sitters.
- Check out the public library for books, magazines, and even movies. Request something if it is checked out, and the library will send notice when they get it.
- Scour the newspaper for free concerts, plays, and other events for family entertainment or date nights.
- Instead of seeing a movie on opening weekend, wait a few months to rent it on video or see it in the dollar theater.
- Set a $5 limit on gifts for birthdays and other holidays. Thoughtful and homemade gifts are more memorable than expensive store bought ones, and the $5 limit may force people to get very creative.
- Thrifty people eliminate “emotional spending.” Not only do they avoid shopping to feel better or fill an emotional need, they also don’t spend because they feel like they “should.” Fun can be free, and smart people go out of their way to find it.
Attitude #3: Don’t Waste Anything
As the old saying goes, “use it up, wear it out, make do, or do without.” People who are incurable money-savers believe in using the last drop of everything they have. They find uses for plastic shopping bags instead of throwing them out, they cut open the tube of toothpaste to get a few more days’ use out of it, and they save paper that’s still got a blank side to reuse. They also eat their leftovers and never let food go bad in the fridge.
Completely using everything is an environmentally responsible choice that reduces the amount of trash sent to the landfill, and it also makes the most sense economically. Items are bought to be used, not thrown away. Smart people get their money’s worth from their purchases and squeeze the last bit of usefulness out of everything they own.
Thrifty people let these three attitudes guide them in their purchasing decisions and in the way they live. They value their time, they like to have fun on less money, and they genuinely dislike wasting anything. Saving money begins with a few simple attitude adjustments about money and lifestyle.
Can a Financial Health Check Help Avoid Debt
It’s quite common to carry some debt nowadays. This can be a significant problem for many but others may feel that they remain in control of their finances. Problem is, debt has a nasty habit of growing into a problem, leaving many with stressful consequences. Avoiding future money problems may be made easier with a regular financial health check.
What is a Financial Health Check
Most people don’t actually spend much time thinking about their finances. Their aim generally is simply to get through each month, ideally paying all essential bills and having some money left over to play with. The way that a salary is allocated often becomes habitual spending. So, unless there is a specific problem, many will not pay that much attention to their finances.
But, those with some existing debt may find that it doesn’t take much to tip them over the edge financially. Taking a long hard look at money coming in and money going out is a simple way of checking how healthy finances are and whether there are areas that could turn into future problems or where savings could be made.
How Does a Financial Health Check Work
This is a simple exercise. All the individual needs to do is to check over how healthy their finances are. This could potentially help them spot areas of weakness where they may need to take action. It could also help them spot opportunities to start or maximise savings. The key factors are:
How much money comes in every month.
How much money needs to be spent on essential bills, living costs and debt repayment.
How much money is left over and what it is generally spent on.
Whether any money changes will be happening in the near future.
This information can tell the individual a lot of useful things.
How Can a Financial Health Check Help Avoid Money Problems
Using this information can help avoid potential money problems happening. Spotting a red flag early can make it a lot easier to deal with. So, what can a check say? Those with healthy finances may find that:
They can comfortably afford to pay their bills and living costs.
They can pay more than minimum balances on debt repayment.
They have enough left over to put towards savings for the future.
In many cases, however, this kind of financial health check could show that the individual needs to take action to avert potential problems. So, for example, this may be the case if they find that:
- They can afford their essential costs but can only service their debts at a minimum level.
- They have months where they need to borrow extra to get by.
- They have been close to/have had to skip an essential payment in the past due to a lack of spare cash.
- There are indicators that their financial commitments may cost them more in the future, making things harder to deal with.
- They have no savings built up and no potential to start any in the foreseeable future.
Knowing what is going on and what might happen in the future is essential for those that want to avoid problems with debt. In some cases the individual may decide that they are OK for the time being.
Others may decide that they need to tighten their belts a little or that they want to work towards saving rather than spending. A budget planner may be helpful with that. Those that worry that their finances are in bad shape or are heading that way may want to look at finding a debt repayment solution or talking to a debt advisor to help them out.
