You may feel like there are two types of people in the world: those who are good with money and those who aren’t. Budgeting may be second-nature to people who are more conscientious by nature, but money management and personal financing are not elusive, innate qualities.
Anyone can learn to stop wasting money, save more and become more financially responsible, and you can start your money transformation with these five skills.
Self-Awareness
Rather than focusing outwardly on how much money is out of your bank account, look inward and ask yourself why you’re spending. Aside from essentials, are there areas you could cut back in to save extra money? Many people view saving and spending as trade-offs, and it’s often hard to compromise the small pleasures that make life more enjoyable just to save a few dollars.
You could tell yourself that you’ll save hundreds a year if you stop going to Starbucks every day for a year, but that far-off promise of more cash doesn’t help soothe the craving for your favorite latte.
Focus your attention inward and ask, “What do these purchases bring me?” If most of what you spend extra money on only leaves you with fleeting gratification, it’s time to reassess and find new, more fulfilling pursuits.
Consider the coffee habit. Use the decision to stop buying lattes out as an incentive to learn how to brew your own at home. Saving money can actually open the door to greater opportunities to expand our horizons and develop new interests.
Comparison Shopping
Stores often lure customers in with flashy ads and sales that make it impossible not to buy more than necessary. Make sure you don’t just buy something because it’s discounted. More often than not, you’ll find that another store has what you want for less, so you don’t have to make a bigger purchase to get what you want. Comparison shopping helps improve your research skills and makes you a more effective problem solver.
Conscious Shopping
Pay close attention to what you buy and make sure that you always head to the store with a purpose. If online shopping is your vice, limit yourself and avoid browsing for entertainment. Social media can make it difficult not to buy something impulsively, especially when you’re minding your own business, scrolling through Instagram, when you’re hit with a targeted ad for a to-die-for pair of shoes that even have a discount.
Take inventory of what you own and practice gratitude. When you go out to the store and feel tempted to splurge, walk away for 15 minutes and consider whether the impulse is still as strong.
You don’t need to ask, “Do I need this?” because in most cases, the answer is no. “I want it” is often a justifiable reason to throw something in our shopping cart. Rather than giving in to immediate temptation, challenge yourself to list three uses you have for the purchase you’re considering. If you can’t think of just three good uses in the present, put it back.
Delayed Gratification
If you’ve ever studied psychology, you’ve probably heard of Walter Mischel’s “marshmallow experiment.” While many people mistakenly think the original study indicated a person’s willpower was set in stone by age 5, Mischel’s real message was that delayed gratification is something that can be learned. By developing self-discipline, you can learn to reward yourself incrementally and view your money more as a resource and less as a means to an end.
Learning New Things
After changing your purchasing patterns and saving your income, you might still be interested in improving your finances in other ways. This might come about by learning something completely new. If you can quickly learn things and become skilled at them, you can use these skills to save yourself money or even grow your income. Things like trading stocks or cryptocurrency, car maintenance, and basic repairs can help you either grow your nest egg or cut back on costs.
Methods like these don’t require a side job or becoming a retailer, but they do require some extra time and effort to learn the necessary skills to participate in them properly and effectively. The quicker you learn your desired skill, the more you can save and grow.
The skills you can develop as you learn to manage your personal finances can benefit you in many other areas of life as well. They may even contribute to a more peaceful headspace.
The decision to crack down on your finances and start saving isn’t easy. It often takes a lot of honesty and commitment to change. You may not be able to resist every little purchase right away, but with enough time and diligence, you’ll be amazed at how much more content you are with what you own. Your focus will shift from material satisfaction to living a more meaningful life, and there’s nothing more valuable than that.
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