As a Financial Coach I spend a lot of time working with clients to change their spending habits so that they reach their financial goals. I have found there to be many different tips and tricks to help with this. Some of the tips are practical changes you make and some are mental tricks, but they are all about changing your relationship with money and making sure that you are in charge of your money.
Here are some of my favorite tips:
#1: Making a zero-based budget. You knew this would be first. Making a budget and actually seeing where your money is going each month is such an eye-opening experience. When I was in college I worked at a bank and I would take out money each day for the vending machine. I didn’t realize that this was adding up to working for a few hours a month for free to feed my vending machine habit!
#2: Use cash. When you pay with plastic (even a debit card), you will always spend more, but there seems to be no end to the money. Paying with cash will make you more aware that you are spending the last of your money and evaluate how important what you’re buying may or may not be.
#3: Take care of your four walls first. While the creditors may be nagging you to pay them, you need to make sure your four walls are protected. These are: housing, food, transportation and utilities. These come before debt payments.
#4: Live like no one else so later you can live like no one else. Sacrifice now for the good of later. When you have no debt (even your house) later, you will be able to enjoy your life and your money.
#5: You don’t need a credit score. I get into many arguments about this one, but it’s true (mostly). The other thing with a credit score is that it doesn’t take years to get one. When Nathan and I went to buy our home our credit score was 0. It took 3 months to raise it to “good” so we were able to buy our home.
Which is your favorite tip so far? More tips coming, so stay tuned.