Friend of mind told me about smart idea of his neighbors. They decided to put their small bills and coins, which they receive as a change during shopping, into a small cash box. The plan is simple, they receive coins every time while they shopping. One year later they opened the box and counted the money. There was a decent amount collected, enough to pay them a nice tourist trip. So the went on the trip.
This story looks as a nice example of saving. But at the end it only another way of the saving the money. It does not matter are you collecting the coins every day or you put a large bill every month. Still that is nothing else but your money, nobody else’s. Nobody else will buy you that trip but yourself. It is all about your spending habits and a way how you decide to save the money.
So why does somebody needs method of saving the money, like the example of coins and cash box, that will make him save the money? Probably the answer lays in the fact that we are not trained about developing healthy spending habits and saving money. We are not educated in the school about personal finance management. Probably we learned facts about geography of Himalayas, about the crop harvests in China, but not about how to manage our personal funds in the most optimal way. This is way somebody need some system ( like cash-box and coins ), because otherwise can not control the spending habits.
Therefore, consider giving yourself a short course of household micromanagement. The course includes simple tips and techniques. They are so simple that you cold make you think that they cannot be that powerful. But if you combine them and place some discipline you can easily "earn" a well deserved trip, or something that you need.
First of all, your income should be higher than cash outflow. In other words – do not spend everything that you earn! If you can live with spending whole salary for a period of time, you can come to situation that you have unexpected expenditure. But when such situation comes you will be in financial unease, since you do not have space in your budget.
Secondly, avoid taking unnecessary loans. There are situations when you need a loan, especially for a bigger assets ( house ), but do you really need a loan for a Saturday shopping. You can easily addict to shopping, but if you get into debts, you will have less and less money. Simply, by taking loan you are borrowing the money from your future incomes. This may not look as a problem, since you are borrowing money from yourself. The problem lay in the fact that bank takes the interest for service of intermediation between "today's you" and "future you".
Do not benchmark directly your lifestyle with your neighbor’s spending habits. The fact that he has a bigger house and more expensive car does not mean that he is financially healthier than you. Even if he is, do not compete unnecessary. Adjust your spending habits with earning and create the lifestyle that will make you happy.
Try to keep the monthly finance journal. You do not need to do some complicated financial work. Simply keep the track of your spending. When you establish a good tracking of your private financial flows, you can apply some expenditure planning, in order to make your financial flows more efficient and effective.
Although there are more tips about private financial management, e.g. investments, try at least to stick to these tips. Remember, one million more in your pocket will not make you automatically happy. From the other side, deep debts may bring you unease and uncertainty in your life. Try to find the optimal recipe for a comfortable financial lifestyle with optimal spending habits.
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