Does your money simply disappear without you fully knowing what happened to it? It can be really frustrating, when you’re trying to save money, if you never seem to have anything left over at the end of the month.
When you don’t have a recollection of how you spent your money, you are spending it mindlessly. Essentially you have a habit, and when you have a habit you can do something without thinking about it.
It’s like when you drive home from work, but you can’t recall any of the details of your trip. You make all the right turns, avoid obstacles and securely arrive in your driveway without having to engage the decision making part of your brain.
Mindless spending can be a big road block to saving money. It can keep you living paycheck to paycheck even if you have a decent income. You pay your bills, go about your life and at the end of the month there isn’t anything left. You don’t really have anything to show for it. You just don’t have any money.
If this sounds like your life, you can change your spending habits by imposing a few rules on yourself. Rules are low barriers to spending, but they can be very effective. After following your rules consistently, you can change your spending habits.
Only you can decide what rules will work for you. But here are five that have worked well for others.
- Set your savings aside first. Put your savings goal in savings before you pay any bills, buy any groceries, go out to eat or do anything else. Use automatic deposits to savings to take the decision making off your plate.
- Give yourself an allowance. Aside from the bills you must pay, in other words, those you’ve agreed to pay by contract, allow yourself a specific amount of money to pay for everything else. Your groceries, gas, entertainment, essentially everything else must be paid from the allowance. The amount you choose should leave room in your monthly income to meet your savings goals.
- Only carry cash. Studies have shown that you are more conscious of your spending when you physically experience the cash leaving your hand than when you swipe a card to pay for your purchases. If any cash you carry disappears, carry only enough for purchases you plan ahead of time. If you don’t plan to buy something on a given day, don’t carry any cash or your cards. If you need to put gas in your car, only carry enough cash to fill the tank.
- Only go out if it’s an event. Skip the $10 sandwiches scarfed at your desk. Not only will you not remember you spent your money on them, you won’t remember eating them. Save your restaurant trips for experiences you’ll remember, like a date night, a celebration or catching up with a friend.
- Give yourself a cooling off period. If you are tempted to buy something that wasn’t in your plan, give yourself 24 hours to think it over. Chances are it won’t be quite as appealing once you’ve turned your back on it. If the day goes by, and you really think the object of your desire is your priority, you’ll have had time to figure out how to rearrange your spending plan.
Find something that works for you. If you are ready to prioritize saving over spending, giving yourself some rules can help you change your spending patterns. Once you get the hang of it, you won’t be able to stop being conscientious with your money. You will know too much.