Here’s another great article for curbing your spending habits from Hip Pocket.
If Facebook had a financial status button, most Australians in their 20s and early 30s would have it set to “It’s Complicated.”
That’s because, according to the Australian Bureau of Statistics, at this time in your life you are earning nearly twice the amount you did as a teen … but only half of what you will earn in your mid-40s. Your debt is probably quite high (65% of income) but your financial responsibilities, such as to a mortgage or childcare, are low.
With all of these contradictory influences on your financial situation, I think it’s safe to say that your 20s is not a time when you are going to be raking in the dollars. However, this time is the perfect time to get your attitude right, and set a great foundation for future wealth creation.
Did you know that 70% of lottery winners lose all their money within five years? Shocking, right. But, why? Because they don’t have a healthy relationship with money. Your attitude toward your finances is the most important factor in creating the right riches for you. Without a practical approach to daily spending, and a healthy respect for yourself and your future dreams, it won’t ever matter how much money you earn.
With that in mind, I have listed below three simple steps that can help you build a healthy and prosperous approach to money.
Are you ready to cut back on your spending?
1. Ask yourself “Can I live without this?”
Unless you are buying something vitally important to your existence the honest answer to this question is probably going to be “yes”. I know that it can sometimes feel like you can’t live without a new item, but by truthfully evaluating your need for the object, you empower yourself. You are controlling the purchase – it is no longer controlling you.
2. Understand that “If I can live without it, this is a choice”
If you don’t actually need an item, then the only reason you would spend money on it is because you choose to. As much as your emotions may be calling you to act, the choice of how it will impact your financial situation rests solely with you. If you want to be wealthy, then you have to choose to create wealth.
3. Ask yourself “Is now the time?”
Understanding that the purchase is a choice, places you back in the driver’s seat of your financial well-being. Now, you can take a step back from the emotions of the situation and consciously gauge the consequences of spending money.
Is this the right time to spend money on that kind of purchase? How will the purchase affect your other financial plans? Is the purchase more possible and appropriate at a later time?
Sure, it may take restraint at times, but the ultimate gain is a life free of money worries – a life where your relationship with money is fresh, fun and truly liberating.
By Curry Glassell