Quick snippets from my morning read on Saturday, 21st November 2020
Today’s morning read as taken from an article by Philip Taylor, focuses on spending as an aspect of personal finance.
We all want to be wise with our money, right? Sounds good in theory, but how do you actually put it into practice? Let’s take action today.
These quick, little improvements can have a big impact over time. We share seven of the 10 tips on how to spend money wisely.
Make a list of what you value.
The best way to spend more wisely is to align your spending with your values. Are you even aware of your personal values?
Take a moment to write down the things that are most important to you in life. Is it security for your family? Is it success in business? Is it helping others?
Write these values down and then ask yourself this question: “am I spending my money on things I value?” Then, ask “am I spending my money on things that aren’t in my value system?”
Doing this little exercise will give you some clarity and help to guide you into thinking consciously about your spending.
Make a list of things you really enjoy.
Along the same lines as #1, you should be using your money to bring joy to your life. You define what “joy” is. Go ahead and write that down.
What brings you happiness? Identify those things and then ask yourself if you are spending your money in those areas. More importantly, ask yourself why you are spending on things that aren’t on that list? Avoid spending too much money on things that aren’t at the top of your “joy” list.
Make a list of places, things, or people that cause you to make poor spending choices.
Can you identify the triggers to poor spending in your life? Think about your spending over the past couple of weeks.
When did you make the worst decisions (i.e. spending money you didn’t have, spending on things you don’t value, etc.)?What was the cause of your poor choice?
If you can identify these weak points then you can begin to live your life in a way that helps to avoid some of these spending hot spots.
Review your regular spending for things to eliminate.
When was the last time you wrote down your list of monthly bills? Take a moment to do a thorough spending review now.
List out all of your required spending for the month. This includes rent or mortgage, insurance, debt payments, utilities, services, etc. Is there anything on that list that you don’t need or want?
Odds are you have one or two yourself. If you find something to eliminate, do it.
Create a budget.
On a basic level, a budget is simply a plan for your money. If you know your expected income next month, write that number down. Then start applying that money to different things.
Start with taxes (if it isn’t already taken out), giving, and savings. Then move to basic necessities: housing, food, insurance, utilities, transportation. Finally, apply the rest of your income to other things you need or want.
Start writing down each purchase you make.
Tracking brings awareness to any situation. Use your phone or other device to take spending notes throughout the day. Or simply carry around an old school pad and pen to jot down your spending. Do this for a week and see if your spending improves.
Implement a “sleep on it” rule.
Decide today that for any purchase over X amount you will “sleep on it.” It could be one night, a week, thirty days, whatever.
Just allow some breathing room in between your desire and your decision to buy. Obviously this gives you time to evaluate the purchase against your values and your budget.
Read the full article with all the 10 things on How to Spend Money Wisely by Philip Taylor
And as always, if you enjoyed this, check out the rest of our daily snippets, curated daily, right here on The Red Notebook.
