Impulse spending is a trait that most people have, much to their detriment. A survey done by CreditCards.com shows that five out of every six buyers are impulse spenders showing that most of us fall into this trap without even realizing it. Normalizing this sort of thing is what created credit card debt and allows it to mount up and create a massive wall that seems insurmountable when taken in its entirety. Saving money seems like a gargantuan task, but that’s not just from your perspective. According to iHeartRaves, most of the reasons behind spending is simply because we have encouraged bad habits when it comes to money management. Getting out of this circular logic is difficult, but not impossible. Here’s how to take a one-way trip out of Broke-ville that you definitely need to end up with a happier life.
Step 1: Know What Goes Where
Every single thing you’ve read regarding personal finance management probably mentions budgeting, and from the time you see that you toss it. Budgeting, that is, creating a budget, isn’t the most difficult thing in the world to do, but if you don’t know what you’re doing you’ll get daunted from the start. Investopedia notes that a budget tends to give you a goal to work towards, especially if you’re seeing your savings grow on a month-to-month basis. This short-term rush you get is similar to the kind of rush that clicker-games on phones tap into – the joy of short-term accomplishment. But this short term accomplishment isn’t something intangible like imaginary coins. It’s real-world cash that can be used to buy goods and pay for services. Which brings up the next point.
Step 2: Be Honest about Expenses
Far too often when making a budget we are dishonest about where we spend our money. The result is that our budget doesn’t work because we’re lying to ourselves about where our money goes. being aware of expenses, especially those that are recurring, helps to deal with issues that may arise with paying bills over time. The Federal Bank of St. Louis notes that millennials are among the least likely to have positive wealth accumulation during their lifetime. This comes from having too many obligations and no way to meet them, and all of this stems from being dishonest with yourself on your budget planning. Knowing what you have to pay for based on what volume of incoming funds you have access to helps to make sure you still have something left over at the end of the month to save. But nothing beats having a saving plan.
Step 3: Develop a Saving Plan
A saving plan is simply a calculation of how much you intend to save by what age and the steps you intend to take to get there. Savings plans allow for long-term financial development planning while offering a way to save money that doesn’t heavily impact day-to-day spending. The strain of having to save a large volume over a short amount of time usually leads to people breaking their saving plan in order to splurge, but this isn’t about the short term. We live in a world where short-term gratification is the norm, but that goes against what a long-term savings plan is supposed to accomplish. Giving something up now will ensure that you can afford something even better further down the line. However, if by the time you plan out your savings plan and your expenses are already more than your income, you have a problem, but surprisingly, it’s not a difficult problem to rectify.
Step 4: Side Hustles
Everyone has hobbies or things they do for fun. One of the best ways to ensure that there is always money coming in for savings is to create a side hustle that brings in some extra cash while still being something you find fun to do. Side hustles can be anything from selling items on eBay that you don’t use anymore to creating things like t-shirts and artistic pieces and selling them on Etsy or even Amazon for some spare cash to buy bitcoin. The main catch here is that since the money coming into your account primarily is from your regular job, you find that the stress of a side hustle is almost all but removed once you get into it. Eventually, if you get really good at a side hustle, you can start doing it full time and that’s where things really take off.
A Journey of a Thousand Steps
You’ve got to keep the long game in mind when it comes to saving. Retirement is something most people our age takes for granted because it seems like such a long way away. However, once the years start rolling in on your retirement starts looking bigger and scarier every year. Even if you’re not looking at retirement yet and just want a little extra money to spend at Christmas, this long-term savings plan is the ideal way to do it. Utilizing automatic expense trackers and account management services can add a priceless dimension to your savings as well as show real, tangible results when you do manage to save some stuff. The choice to save money is always yours, and even as an impulse spender, there’s a way to keep your money in your pocket and let it grow for you.