Getting Connected To Your Money
It strikes me that a major reason some if us might struggle with our finances is an increasing distance from the real, tangible nature of money. I was thinking about this as I was having breakfast this morning; how I would quite quickly and without buy a TV series on iTunes and yet umm, ahh and ponder before I bought one in a store. And while I know discipline is a large part of my problem, I’m sure the unreality of how we spend is also a serious issue. So here are some thoughts on how to get back in touch with the feel of cold, hard cash and how it might benefit your finances,
Credit Cards
We all know that it can be easy to lose control of our credit cards because of this distance from the reality of money. To buy something on credit is to gain instant gratification with a delayed pain reaction. And, if we don’t really have the money, delaying the pain reaction is the only way we can continue to spend. We have a different relationship to cash and to credit, and the important thing is to recognise it. While, for me, I think a life without credit card is one step closer to paradise, if you would like to keep your credit card, remind yourself with each purchase that a dollar is a dollar- unchanged, whether it’s with a note in your hand or that slippery bit of plastic from your wallet.
Cash Economy
Take this idea one step further. If you revert to cash only- going to the ATM, taking out a week’s worth of money and stopping your spending for the week once it’s gone. you could stand to save a significant amount of money. Even EFTPOS can feel unreal, and we all need to get back in touch with what actual money feels like. The tangible experience of having it in your hand and passing it over automatically slows your spending patterns. Cold hard cash is right. So try it for a week. No EFTPOS, no credit cards. Maybe even experiment with paying your bills in cash. See if it alters how you feel about your spending patterns. I would be willing to wager we would all spend less. If that proves to be the case, think about moving more of your purchasing to cash.
Don’t Buy Online
Don’t get me wrong- I bought an iPad a couple of months ago, and I love it to pieces. But iTunes and the app store has made quick purchasing so effortless, it can be a nightmare for your finances. I’ve bought TV series and a couple of apps I never use without any thought. It doesn’t represent a huge amount of money, but it shows a spending pattern without any consciousness. As far as I am concerned, online purchasing can often not feel like real money. And though buying online is probable part of our lives we’ll never be able to avoid here on in, make sure you have a cooling off period before you make the purchase. It could also be a good idea to check your bank account once a day, to remind yourself that these purchase represent real money. Seeing the actual effect of your spending will improve your sounding behaviors and probably save your money.
The Envelope Method
Another well-worn method to reconnect you with your money is the envelope method. Divide your weekly income into envelopes- first, necessities. Rent, a grocery budget. Utilities. The repayments- your mortgage, or credit card repayments. Then the savings envelope. What you have left is your discretionary spending. Chances are, it’ll be a whole lot smaller than you expected. The envelope method helps you realise the reality of your income and expenditure, which in turn, improves your approach to discretionary spending. I certainly need to start getting real about my money- the gap between how much money I think I should have at the end of the month and how much I actually have has a lot to do with my disconnection to my finances. So, starting now, it’s back to a nickel and dime approach.
Related Posts
