Just like any other success, financial success does not just happen. Maybe it does, if you win a lottery. But for average people like you and me, it takes small steps over a period of time. Being smart starts with you being intentional about your spending.
With each baby step, you form a new habit that leads you to financial independence. It’s all about being smart.
Avoid being “penny wise but pound foolish”
It’s very easy to save little cents here and there. However, that’s not where the real money is saved. You’re placing your focus on what does not move the needle. You get better results when you’re able to cut down on your bigger bills. For example, using uber always when there are cheaper alternatives. So, evaluate your bills and expenses to make cheaper decisions. It will reflect more rather than trying to pinch pennies here and there on smaller purchases.
When you want something big, wait
Impulsivity can get you in trouble in most aspects of your life. Finances are no different. I think it’s in human nature to see something catchy and want it right there and then. We get ideas of what we want, it’s hard not to get it right then. A good example is wanting a new car or a need to replace a part of your old car. Rather than giving in to the impulse, you will need to take a step back.
Set a time frame for yourself, say three months and see if you still want to change your car.
The feeling might still be there, but most times, the feeling doesn’t last and you realize that it wasn’t even a need at all. The impulse faded away and you just saved yourself a lot of money. Win-win.
Live smaller than you can afford
So you finally got that raise and you want to celebrate. Sure, why not?
You’ve been waiting on this for a long time, and besides, you’ve worked really hard for it.
Have a good time, but don’t make it a habit.
Don’t get caught in the trap that just because you’re making more money, you should spend more.
Once you start making money, you begin to think that you need a bigger house, car and the rest. Resist that urge. At least for the time being.
The trick is that once you’re able to live smaller than you can afford, it is the fastest way to build up savings. If you constantly upgrade as you make more money, then you’ll never get ahead.
Practice Smart Grocery Shopping
Food is one of the largest portions of any budget. If you’re not careful, it can be the greatest drain to your wallet. Most people are guilty of this. You know you have food at home but you’ll rather eat out for no particular reason. And you frequently do this, just sit down right now and make a comprehensive assessment of how much you unnecessarily spend on food. Are you proud of yourself? I’ll leave you to answer that question.
Secure the bag by going home to cook a nice meal. When you’re going grocery shopping, make a list and have a budget. It always helps you to curtail your expenses.
Strictly stick to that budget and watch how much you’re able to save within a short period of time.
Cancel Gym Membership.
Yeah, you heard right. I’ve heard people during conversations say that they had to stop going to the gym because they couldn’t afford it anymore. Now imagine how much you would have saved if you just opted to work out at home. Go jogging, run the stairs, etc. Besides, thanks to technology, there are several apps and short ways to help you achieve your fitness goals.
I know it feels good to go to the gym and wear cute gym clothes but ask yourself if it’s a necessity. You can actually wear your cute gym clothes during your home workouts, might I add.
Read the smart money woman by Arese Ugwu.