I’ve previously identified your spending habits as one of the four money monsters that prevent you from being wealthy.
There are some simple steps you can take to manage your spending for better outcomes.
An important lesson I learned from the many wealthy people that I have studied is that the amount of money you retain is just as important, if not more, than how much you earn.
If you can’t control the money going out you will struggle to build the wealth you want. In fact studies have shown that the more we earn, the more we spend, unless you have a plan.
So let’s have a look at some simple steps you can take to manage your spending habits.
1. Create a Plan
Most people will tell you to have a budget, not me, I hate them. I believe a budget doesn’t work, but that’s a whole other post.
This step is about having a plan for your spending…
You need to prioritize what is important to you.
There are obvious costs that you have to meet each month, such as food, shelter, transportation and other essentials, so they get priority.
But then you need to prioritize according to your goals.
If debt minimisation is your first wealth goal, then plan to allocate some money to reducing debt.
By having a plan you know how much remains for other spending habits, such as eating out or entertainment.
Knowing in advance what you want to do with your money prevents you from over spending in areas that aren’t a priority.
If you want to learn how to get a plan working for you, click here.
2. Know Your Spending Triggers
We all have triggers that cause us to spend when we really don’t need or want to.
Maybe it’s the smell of a certain food, or a favourite shop that you just can’t resist, or worse still, maybe it’s boredom.
How did you feel the last time you had a spendng breakdown?
Start tracking how you feel when you splurge on a specific item that isn’t part of your plan.
For example, if you get the afternoon munchies every day, write down how you were feeling.
Maybe you were bored. Maybe you ran out of things to do.
By identifying the underlying issue and writing it down, you may be able to come up with ways to avoid the expense all together.
Something I have used in the past to avoid the afternoon craving is to get up from what I am doing and go for a walk. Take 5 minutes and just walk. Enjoy the surroundings and the calmness of your thoughts. Before you know it the munchies have passed and you are still on track, and saved $10.
You will be surprised at how such a simple mind shift can be to avoid a spending habit that cruels your health and your wealth.
3. Do Your Research
This is one of the most under rated wealth tips I coach people on.
You will be amazed at how much you can save by doing some simple research before you spend, especially on the bigger ticket items.
Look around, compare prices and make a decision to buy based on your available cash, your plan, and the best outcome for you… not the best outcome for the advertisers that catch you with their fancy commercials.
Have a plan for spending amounts greater than $500, maybe you wait a day or a week before committing. A lot of the time after you have waited the impulse is gone and you realise you never needed the thing in the first place.
4. Get an Accountability Partner
You will know that it is easy to have good intentions with money…
But when your friends or family don’t share your dreams, they can be part of your problem.
So share your goals with someone close to you.
If you are married, then that is obviously your spouse. If you are single, tell a friend and ask them to help you.
It could be as simple as asking them to help you avoid the triggers of your spending habits.
For example, if you tend to spend lots of time at shopping malls, which results in you spending more than your plan allows, share with your accountability partner your desire to spend less time in the malls.
Your accountability partner can remind you of your dreams and help keep you focussed.
Wealth is like anything in life, it’s a lot easier when you have help from others.
5. Develop Spending Patience
Have you ever had a time, or times, when you went on a buying frenzy? I’m sure you have, I know I have.
A buying frenzy is where you get so excited about having some money and wanting everything in sight, with no consideration for your plans or goals for your money.
You don’t even care if you can afford it…
The problem is, you end up with a spending hangover.
Develop patience when it comes to spending, take your time.
If you feel the urge for a spending frenzy, put off going to the shops, even for just 24 hours.
In most cases the urge to spend will pass overnight and you will be in much stronger position to make wise spending decisions the next day.
Patience is not only important for your spending habits, but it is a crucial trait for wealth creation…
Wealth is not something that can be done overnight, it takes time and patience.
So start building your patience muscles and watch the benefits grow in your wealth outcomes.
6. Visualize Your Goals
You created a plan in step one…
And now that you have a plan, it’s a great idea to visualize what it looks like.
Create a vision board or just write your plan out in a list, and put it somewhere that you can see every day.
This will constantly remind you of WHY you are cutting back on expenses or sacrificing some things that are difficult for you.
Seeing what you want and being reminded of it every day is a great way to change your mindset when it comes to your spending habits.
A vision board that contains pictures of the things you want, like a new house, is instant motivation and will help develop better spending habits, without you having to force it.
Increasing your income and saving money aren’t the only ways to make a difference in your wealth outcomes.
How and when you spend can impact how much money you have to work with to achieve all of your money goals.
Try creating some smart spending habits of your own!
Leave me a comment below and let me know how you are going to change your spending habits this week.
And if you want to get some no cost coaching to find your hidden surplus and create a plan to grow a 7 figure financial future. Click here to claim your call with me.