From Chaos to Control

How These 7 Habits Transform Your Spending

Hey there Money Saver! Welcome back to another week of How to Save A Buck, where we explore ways of saving money in personal finance, credit cards, and investing! Check out my archive here!

When it comes to personal finance, small habits can make a big difference.

In his book, Atomic Habits, James Clear stated that “habits are the compound interest of self-improvement.”

And you know we are all about compound interest here!

Whether you’re just starting your financial journey or looking to fine-tune your money-saving strategies, these seven habits will transform your ability to save.

No more excuses!

1. Have a Spending Plan

Creating a budget is like having a roadmap for your finances. It helps you allocate your income wisely, prioritize expenses, and avoid overspending. Here’s how to get started:

  • Track Your Income and Expenses: Understand where your money is coming from and where it’s going. Use tools like spreadsheets or budgeting apps to organize your financial data.

  • Categorize Your Expenses: Divide your spending into categories (e.g., housing, groceries, entertainment). This clarity will reveal areas where you can cut back. Most credit card apps allow you to categorize your spending with ease.

  • Set Realistic Goals: Define short-term and long-term financial goals. Whether saving for a vacation or building an emergency fund, having clear objectives keeps you motivated.

2. Pay in Cash

We love using credit cards here - but only for their rewards. We recognize for others, using credit cards can entice you to overspend - and that’s no good. So paying in cash has its advantages:

  • Tangible Spending: When you physically hand over cash, you become more aware of your spending. It’s a psychological nudge to make thoughtful choices.

  • Avoid Debt: Cash transactions prevent you from relying on credit cards or loans. Debt-free spending is a powerful habit.

3. Write Checks

Writing checks is old school. But hey - they can serve a huge purpose. It’s easy to forget you signed up for that silly subscription months ago, until you write that check EACH MONTH.

  • Bill Payments: Use checks for recurring bills like rent, utilities, or subscriptions. It’s a way to remind yourself of these expenses and determine their value to you.

  • Record Keeping: Each check leaves a paper trail, making it easier to track your expenses.

4. Make Lists

Lists are your financial allies. They keep you organized and prevent impulse purchases. We use Apple Notes all the time for grocery and packing lists. Any free notetaking software will propel you to save more and spend less.

  • Grocery Lists: Plan your meals and create a grocery list. Stick to it when you shop to avoid unnecessary items. (Don’t grocery shop hungry either!)

  • Shopping Lists: Before hitting the mall or browsing online, jot down what you need. Stick to the list and resist temptation. And speaking of shopping…

5. Designate a Shopping Time and Place

Online shopping can be convenient but also dangerous for your wallet. Here’s how to stay in control:

  • Scheduled Shopping: Set aside a specific time each week for online browsing. Treat it like an appointment.

  • Create a Shopping Zone: Choose a dedicated spot (like your kitchen table) for online purchases. This physical boundary helps you avoid impulsive buying.

6. Avoid “Auto-Renew” Whenever You Can

Subscription services often come with auto-renewal options. While they’re convenient, they can silently drain your funds:

  • Review Subscriptions: Regularly assess your subscriptions. Cancel those you no longer use or need. DoNotPay and RocketMoney are a couple of resources to help you.

  • Manual Renewal: Opt for manual renewal instead of auto-renew. It forces you to evaluate the value of each service.

7. Be Kind to Yourself

Financial discipline is essential, but it’s okay to slip up occasionally. Here’s how to handle setbacks:

  • Celebrate Progress: Acknowledge your achievements, even small ones. Celebrate reaching milestones. This shows progress!

  • Learn from Mistakes: If you miss a savings goal, don’t beat yourself up. Learn from the experience and adjust your strategy.

Remember, these habits aren’t about deprivation; they’re about empowerment. Incorporating them into your daily routine will help you build a stronger financial foundation and achieve the goal of putting more money in your pocket!

Besides, a habit of saving is way more fun than a habit of spending…

Save On,

Chris