Wallet Willpower

by | Sep 1, 2016 | Personal Finance 101 | 0 comments

As the old adage goes, “money doesn’t grow on trees.” It’s far easier to spend your hard-earned money than it is to earn. Without a tangible, long-term savings and spending plan, you’ll be struggling to make the monthly bills. Even for the most cost-effective shoppers, a trip to the city or a night out to dine can burn a hole in your pocket. Money goes fast, and it goes even faster when you are surrounded by the allures of modern-day life. The solution does not have to be complete isolation and a shunning of all things novel and fun. Rather, some pre-planning of your expenses and a little bit of wallet willpower goes a long way.

Living within one’s means is a difficult concept for many, and the temptation of credit often gets people into serious financial trouble. Current U.S. unresolved credit debt is over $950 billion. Thus, it’s safe to say that impulse buying and credit overuse is a large, crippling problem for many Americans. Your financial portfolio will be inaccurate if it’s behind thousands of dollars of credit debt. Worse, high APR’s compound the problem, making it more difficult to even resolve the original debt.

First, ask yourself some real questions, and answer them honestly. Before you get to the register, analyze the situation vs. your budget (don’t ignore that little voice in your head). Do you need this item? Is it a quality purchase? Do you actually have something to show for your money? If the answer to any of the above is “no” then you need to seriously reconsider your spending plan. Try walking away from the item and taking some time to think it over. A little clear-headedness will work wonders when the excitement wears off.

When asking yourself these tough questions, keep sacrifices and compromises in mind. Opt for the generic brand instead of the designer. Leave the credit cards at home, and search out online coupons for the best deals at your local outlets. Research shows that 3 of 4 Americans have purchased products out of impulse, and often as a direct result of their emotional state. By knowing the risk of impulse buying, you empower yourself to make the right choices and save yourself financial strain.

Before the next trip out, organize a budget prior to leaving the house. Allot yourself $100 for the day, whether it’s a meal for two or a trip to the mall. Once that $100 runs out-you don’t run to the atm. That way, you control the numbers, they don’t control you. This is precisely where willpower comes into play. This is the concept behind real budgeting, and one that prevents financial disarray like bankruptcy and devastating credit debt. Live within your means and shop smart, it only takes some rational thinking and self-discipline. To learn more about long-term savings, contact us today.