Do you fall into a pile of debt due to poor money management? If so, take a look at your spending habits. As it takes time to rack up credit card bills you will need to learn the way you spend your money before things get out of control.
Are You a Spender or a Saver?
Each of us is either a spender or a saver. There are distinct characteristics for both types of people.
Spenders love to buy things. They go with their first impressions. Impulse buying is their specialty. Not allowing time to think about a purchase before making it leaves them with stuff that they could have done without. Spenders live for today with little thought to the future. Why save when you can be happy now?
Savers are on the opposite end of the spectrum. They think about the future all the time. In fact, they give more thought to the future than they do to the present. They sacrifice to the point of piety. Enjoyment of life is not in their equation. The sad part is that they may not even enjoy themselves when they reach the point in life that they have saved for. A penny saved is a penny earned.
Steps to Build Good Spending Habits
Once you understand the way you spend your money you are ready to strike a balance between the two opposites. To build the best character trait you will need to build a self-discipline. It begins with a financial plan — a budget. The followings are steps you can do:
1. Start with last month’s purchases. Look at bank statements, credit card statements and ATM receipts. Remember to ask for a receipt. Keep all receipts until the end of the month.
2. Create a budget using the last month’s purchases information. Know what you have allotted to each group and stick to it. After the first few months you will be able to fine tune the line item amounts. Don’t cut yourself to the bone, thus making a budget hard to follow. On the other hand, don’t give yourself so much leeway that you go over budget every month.
3. If debit cards are a problem, carry cash. Using cash may seem antiquated in today’s society, but it is still the best way to keep track of your spending.
Spending habits don’t change overnight. It takes a conscious effort to start, but once you get the hang of it, it will become second nature.
Get more tips for managing personal debt so you can build new, good spending habits.