The willingness and the ability to save money is the secret of building wealth. So as to save money, you need to spend less than you actually earn. Though it looks very simple when you say it, it is really difficult to implement. There are plenty of ways to help you start saving money even on a very tight budget. Saving money or spending less is all about the personality, belief system, values of a family.
To be smart, spend carefully.
To be wise, save regularly.
To be genius, give extravagantly. – Chip Ingram
Spending less and saving more are lifelong living skills that need time to develop. Unless and otherwise, you have written financial goals , you will lose your focus and go after consumerism and materialism.
Table of Contents
- Spending influencers
- Strategies to overcome these influencers and spend smarter:
1. Emotions
2. Traditional thought
3. Society
4. Habits
5. Commitments
1. Control your emotions
2. Self-talk
3. You are unique
4. Learn and unlearn habits
5. Unwanted Commitments
Spending money has got so many influencing factors. But all these influencers can be classified into five broad spending influencers.
1) Emotions
Your emotions play an important role in your spending pattern. Positive feelings like happiness, fun, joy can influence you to spend more on entertainment and gifts. Negative feelings like envy, jealousy, shame, stress, depression, frustration can influence you to spend more on smoking, drinking, buying things you actually don’t need, relaxation and healthcare.
2) Traditional Thought
This is because of your belief system and your thought process. I need to buy a silk saree every year for my wedding anniversary. I have to burst crackers for Diwali. These are all classic examples of how your traditional thoughts will influence your spending pattern.
3) Society
The society in which you live will have more influence on your spending. You have to buy a car as all your colleagues are coming to the office in their own car. On the occasion of your kid’s birthday, you need to arrange gifts for all the classmates of your kid. You should be watching this movie, on the first-day first show. This influencer is caused by friends, colleagues, neighbours, relatives, and club members. Even at times, advertisements and promotional offers like a discount sale can make you spend more.
4) Habits
Habits formed when you are growing up can make you spend impulsively. Generally, this will be your sensual pleasures. Spending on movies, music, eating out, smoking, drinking are the best examples for this influencer.
5) Commitments
This includes paying off your debts and loans, commitments towards family-like school fees, buying groceries and other provisions, paying rent, paying for medical insurance. You are committed to paying these expenses earlier.
By tracking and analyzing each and every expense, you will be able to identify the influencers which made you spend. Here are some strategies to overcome these influencers and spend smarter:
Control Your Emotions
Instead of spending money, you can control your emotions by doing something else like yoga or meditation, watching comedy shows on TV, going to the temple or beach. You need to solve the root of the emotion. Do introspection and keep a balanced mind always. A balanced mind is key for spending smarter.
Self Talk
You need to consciously change your thought patterns to come out of traditional thinking. “I don’t really need a saree for every wedding anniversary”. “I am not a kid; so I need not bust crackers on Diwali”. These kinds of auto suggestions will change your thought process and you will be able to really prioritize things on which you spend.
You are unique
You were born original. Please don’t die a copy. There is no need to feel bad if you don’t get to spend or buy things like your friends or people around you. You are unique and special in your own way. You need to discuss with your family and friends about “How to live happily by achieving compromised spending patterns?”
Learn and unlearn Habits
The unwanted habits which make you spend more can be unlearned. Good habits which make you spend smarter can be learned. Habits can be learned and unlearned. But you need to know it is not a quick fix. It involves a process and a commitment.
A habit is an intersection of knowledge, skill, and desire. Knowledge is ‘what to do and why’. That is we need to spend less to save more and become richer. Skill is ‘How to do’. That is ‘how we spend less and what are all the strategies to be applied for spending less’. Desire is the motivation, the want to do. What are we trying to achieve by spending less? How that is more important to us than spending more. In order to make something a habit in our lives, we need to have all three.
Now, can you guess what habits you need to learn?
Here they are:
- Saveregularly
- Read finance blogs/books
- Track your spending
- Find ways to cut your spending
- Spend extra or unexpected income wisely
- Have a savings goal
Now, what are the habitsyou need to unlearn?
- overspending
- Emotional spending
- Buying on credit
These are the habits you need to unlearn.
Unwanted Commitments
You can’t avoid certain commitments like groceries, schools fees. But definitely you can discontinue unwanted commitments like the club membership in which you are not actively participating and not getting any actual use out of it; the chits impulsively you have enrolled with a jewellery shop.
Money not spent is saved. The above strategies will only work if you truly have a desire for future financial success. You need to be disciplined and persistent in the course of implementing these strategies. The more you practice smart spending, the wealthier you become.
Not just that, it gives you:
- Financial freedom,
- Independenceand
- Security
You will alsobe able to get out of debt and have money incase of any emergency.
The wealthier group of people started by saving a small sum.
The question for you today is, Have you also started saving?
Don’t worry if it’s a small sum but start today, start immediately, start now,
If you want to be successful in creating more wealth by spending smarter and also take the next steps of financial planning, then I strongly recommend you take advantage of
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