Money Saving Habits for Financial Freedom
Money Saving Habits for Financial Freedom
We all hope for a life of financial security and freedom to enjoy some of the luxuries of life. For that to happen, what we spend must be less than the money we earn. What may sound like a simple concept may be hard, especially in a culture of immediate gratification, but not impossible. Over time you can develop new habits that will make it easier to spend less, and you will learn to patiently wait for the extras you want out of life.
Perhaps the biggest mistake when working toward financial freedom is to see a lack of income as the problem. A whole lot of energy is wasted trying to earn more money, when the real issue is financial mismanagement. Of course, there is nothing wrong with making more money, but it won't address the issue of overspending. Here are some ideas to help you begin developing new habits that will bring you financial freedom.
Know Your Wants from Your Needs
The first step in getting spending under control is to know the difference between things you need from things that you want. There is one question to ask that will help you determine the difference. "Does the item fall into one of three categories: food, clothing or shelter?" If it doesn't, it's not an essential for living, and you should consider the wisdom of making the purchase. As much as you may enjoy restaurants, cable television or having two cars in your garage, none are essentials for living. It may help you tell the difference between needs and wants by considering what you would need in an extreme crisis with limited finances.
Setting Your Spending Priorities
The standard of living that we all strive for will include some purchases that don't fall into the food, clothing and shelter categories. After taking care of your life essentials, most people will have a little extra left over for non-essentials like entertainment, nice bottle of wine, etc. Choose wisely how you spend your discretionary funds. If you buy impulsively, you may end up spending more than you would if you take the time to be selective. Acknowledging the things that you want that bring fulfillment and those that are superficial will help you spend less.
Admit to Your Weaknesses
We all have areas of weakness, and when it comes to spending money, identifying and getting a handle on them is important for financial freedom. Your weaknesses could be fast food and shopping. No matter what they are, once you've pinpointed them, you can begin to form new money saving habits by putting rules in place to cut back or eliminate excessive spending.
Every Little Bit Helps
It's not just the habits that you form that will lead you to financial freedom from debt, even small efforts, over time, will have a positive impact. In finance, 'a penny saved is a penny earned' still applies. For example, brewing your morning coffee will save more than $1 a day over buying through the fast food drive-thru window - a respectable $40+ a month in savings.
Your Financial Pitfalls
For many people, credit is one of the sources of their personal woes. Others have medical concerns that tap into their finances. No matter what your personal pitfall is, whenever possible find ways to minimize their impact. Cut up your credit card; pay more than the minimum on your loans. Remove your temptations that allow you to spend impulsively by making a list every time you go to the store.
While we have no control over much of our spending, like our mortgages, a great deal of money can be saved by focusing on those areas that we do have control over. With a bit of discipline and self-control, financial freedom from debt is within your grasp.
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