If there is anything the credit crisis over the last few years has taught us is that debt is bad, despite what financial companie’s try to tell you. The other thing is that everyone has to really watch their spending. Part of the monitoring of spending is those little things that you buy, like coffee, latte or a bottle of water here and there.If the economy continues the way it has been for another few years, you will most likely be forced to change your habits, especially if you are in heavy debt, you have no savings or if you are in a job that is at risk of layoffs.
Making small changes in your spending habit does make a difference and can make your finances healthier. Most people get into financial trouble and difficulty mainly because of lack of discipline. If you don’t have discipline you are destined to repeat the same mistakes over and over again, because you can’t control your impulses when it comes to buying things.
You have to force yourself to adhere to a savings plan, and the way to do this is using the automated deposit system to transfer funds to your “savings account”. Money is automatically transferred from your paycheque directly into the savings account or investment. This way you will have to get by what money is leftover after the savings amount have been transferred. And most likely, you will get by and you won’t even really miss that amount. However, you will have the satisfaction of knowing that your saving account is growing.
Another way to control your spending is to not put yourself in situations where you will give in to temptation and impulse. A good example is if you are really into electronics, then try your hardest to stay away from going to Best Buy…if you love fashion (most women) , stay away from the shopping malls with your favorite clothing shops. If you don’t have the self-control and just window shop then it is best to just stay away.
A lot of people spend beyond their means especially around the “Holiday Seasons”, because they want to keep up with the Joneses (this can be detrimental to your financial health) and also they want to be nice to other people and give nice gifts (are you being nice or stupid though). Being “nice” by putting yourself into lots of debt doesn’t make sense if you can’t afford it.  Here’s some financial advise from a financial professional that I know.
“Only spend what you have, not what you don’t have” – Plain and simple isn’t it.
You must recognize your limitations and exercise self control. If you can’t control yourself when it comes to spending, even when you know in the back of your mind that you should be saving or paying off debt, then there is something inherently wrong with your psychology and the advise here is to seek professional help.
If you are not convinced that you should change your behavior, then consider what is going on in the economy today. Over 150,000 people in Canada alone has declared “Bankruptcy” that is tiny when compared to the United States, also jobs are being lost at an alarming rate.
Aside from keeping track and curbing the spending on large items such as a laptop or a $250 T-Shirt, you should be keeping track of the little things as well. A little snack, coffee or lottery tickets add up over time to create financial difficulties for people, however most people don’t even think twice or realize it. Take a moment and calculate how much you spend on a cup of coffee a year, you’ll get the picture, if you are in debt that money could have been used to pay down credit cards or something.
Bottom line is if you are struggling to pay off high-interest debts like credit cards, auto loans or you can’t even make your mortgage payment then you need a serious reality check and change of spending behavior. Before you even think about saving you should first think about paying off debt, because trying to save when you can’t even make your debts payments is like filling a bucket with shot gun holes in it.
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