It’s hard to spend less than you earn when you’re used to living large, but doing so will lead to more money in the bank, more security and a greater sense of pride. Training your mind to live within your means is an important part of this transformation, so a change of focus should be your top priority. Other changes include establishing a budget and putting goals in place to keep you on track.
Here are 3 ways to change your spending habits to live on less:
- Change your mindset.
The first step in changing your mindset is identifying benefits to saving money and living within your means. You’ll be more secure in emergencies, have the ability to save money for important things like a home or your kids’ education and you’ll have money on hand in case a really great deal comes up for something you want but can’t afford at full price.Unfortunately, knowing these benefits doesn’t instantly change your habits. People can combat their worst traits by avoiding temptation and encouraging better behaviors. For instance, you can remove your credit card information from your cell phone or online accounts to make purchases less automatic, giving you more time to consider whether you should really spend money or not. You can also place red stickers on your credit card to remind you that overspending can put your account “in the red.” Follow this up with positive activities, such as spending time with friends walking outdoors instead of at the mall.These changes require some deep thinking, and research shows these kinds of activities can wear your brain out so that you don’t make good decisions later. The same day you successfully talk yourself into sticking to your budget in one store, you’re actually more likely to overspend in another, so make shopping trips short and focused when you first start out.
- Establish a Livable Budget
It’s impossible to spend less than you earn if you don’t know how much you spend and earn. It’s an essential part of getting on top of your finances. Thankfully there are many budgeting apps, both online and available for iOS, Android and Windows smart devices, to help make this easier for you. Plenty of these offer a free version that’s perfect for rudimentary budgeting.The following are recommended:
- Budget Ease
- Mint
- Level MoneyDepending upon the program you choose, you can have your bank and credit card data instantly integrated, organizing your charges on your behalf and providing you with a daily recommended spending limit. These programs can really surprise you by highlighting purchases and trends in spending you never realized existed, but they can also be overwhelming. If you’re feeling flooded with information, simply use one of these services to help you establish a reasonable budget you manage away from the phone or computer. It won’t work if you try to cut out all the extras at once, but making room for those that are most important can help you feel better about sacrifices you’re making in other areas.
- Create meaningful short and long-term goals.
We all have regular short and long-term goals that go ignored when our finances are out of balance. We miss special events, forgo vacations and sometimes do without the very basics. This is really the crux of why you should spend less than you earn. All of your hard work will feel like sweet victory when you’re mindfully celebrating your financial successes.Make a list of things you want to do this month, this year and in the next five years. Make sure these are attainable too. Buying a Maserati or moving into Disney World’s Contemporary resort aren’t realistic goals for most budgets. Trading your car in for a more fuel efficient model or taking a Disney vacation, however, are things you can work toward. Keep reminders in prominent places related to your spending, such as in your purse or wallet, in your car and next to your computer.
With time, your habits will be reinforced by your goals and by the security of having money in the bank when you need it. However, if you’re working on learning how to spend less than you earn and need some extra help, an auto pawn could help you get through the holidays. Call your nearest Title Tree location for help now.