Discipline Yourself to Spend Less

No one wants to go into debt. We try to avoid it if we can, but we fall into the traps of credit cards and delayed payment specials so easily. Curbing our spending requires discipline and an honest effort.

As consumers, we have to learn to live within our means. This is more than having enough money in a paycheck to pay our bills. Financial security is having something in a savings account and money left over from our paychecks to use in an emergency if we need it.

Living paycheck to paycheck can be dangerous, especially if you have a family. Children get sick; cars break down. Taking money from the bills is not a wise decision, but if you are in a bind, you do what you have to do. The way to break this cycle is to spend less money each month.

Setting Financial Priorities During Hard Times

Most of us have experienced times of financial hardship at one time or another. Sometimes it's because of layoffs or reduced working hours. Other times, it's due to large, unexpected expenses. But no matter what the reason, financial difficulties necessitate taking a look at our priorities.

When money is no object, we often spend it on things that we do not really need. We might go out to fancy restaurants every week, buy designer clothes or buy expensive high-tech toys for the kids. But when our disposable income is reduced, we must often give those things up to have enough money to pay the bills and spend on necessities.

How to Plan for Future Expenses and Emergencies

Image via WikipediaIn today's economy, many people are living from one paycheck to the next. They are never quite sure if they will have enough money to cover all their bills. This can make planning for future expense or emergencies extremely difficult. If you are not prepared for these big expenses that pop up from time to time, it can be a very stressful event.

The following tips on how to plan for your future and save money for the little and the big expenses should make your life much less stressful.

Step 1: Create a personal budget.

You can call it a spending plan if you prefer. It gives you control over your spending and cash flow, and helps you know where you can cut back and save money.

Step 2: Create spending goals.

How much you spend on the majority of expenses in your life is up to you. You will begin to control your money in a positive way when you create a spending goal.

Step 3: Create savings goals.

Include both short-term and long-term savings goals. Short-term goals give you more immediate satisfaction, like saving for a new sofa or a vacation. Long-term goals like a new house or retirement are important too. Set up timelines and planned amounts to save each month for every goal. For example, if you’re saving for a family vacation your goal may be to put away "X" amount of dollars every month for "X" amount of months to reach that goal.

Step 4: Create a separate savings account for your each of your goals.

If your savings and your checking are linked, then you run the risk of using your savings to pay for bills or things you want to buy for immediate satisfaction.

Step 5: Put away money for emergencies.

Experts advise to have a minimum of six months salary set aside just in case. This is particularly important in today's economy where people can get laid off from their jobs, or businesses can go under without notice. And if you’re self-employed, an emergency savings account is particularly important.

With the right planning and a good personal budget, saving money can be a very positive and empowering experience. After all, isn't it worth your time and effort to make your future more secure, to provide a good financial role model for your children, and to enjoy the fruits of your labor.


Recommended: Guide to Family Budgeting

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Splurging Every Once in a While as a Reward

How do you reward yourself? Me, I like to buy books. To keep my spending on track and to eliminate binge shopping trips and tears over credit card bills that are too large to pay off, I decided to make myself work for those books. It works like this:

Set short-term and long-term goals for yourself. The goals can be anything that fits your needs and lifestyle. For example if your goal is to lose ten pounds, then establish exactly how you're going to lose those ten pounds and by when. Also establish a reward. Make the goal as specific as possible and the reward as specific as possible.

For example, if you want to lose 10 pounds, then you could say, "I'm going to lose ten pounds in six months by cutting my carbohydrates and exercising for 30 minutes a day three times a week. When I reach my goal I'm going to buy that "whatever your goal is" I've had my eye on for a few days."

I think it's a good idea to define the cost of your reward also so that you can resist going overboard with it. Otherwise, once you're at the store you could end up spending more than you intended and it will no longer feel like a reward when you see your credit card debt. Additionally, by predetermining your reward you will be able to plan for the expense.

Long-term goals work a little differently. Let's say, for example, that your goal is to train for and run a marathon. This is a long-term goal because it can take several months and a lot of determination to reach your goal. In this case you may want to give yourself mini goals to reach, like when your training reaches the 10 mile mark you get a reward.

This goal and reward process works well because the rewards have meaning. They're not just "I'm a great person and I deserve these books" types of rewards. Additionally, this system helps to keep your spending under control because you know you're going to buy the item, you know how much it costs, and you know exactly when you're going to spend the money. If this type of system doesn't work for you, leave a bit of wiggle room in your budget for a monthly splurge.

After all, money is for enjoying!

Recommended: Guide to Family Budgeting

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