First things first—-I am no financial guru.
The world have different standards when we speak of richness. To some one million is the benchmark, while for others five thousand. For many though fifty thousand will do.
Many may not realize it but apart from standards, we may also be using different units. Some may consider themselves rich for acquiring monetary wealth. Others measure richness with the number of business ventures they have. Still others consider themselves rich for having many friends.
But what keeps rich people rich? — Saving!
The truth is, saving is very addicting. Eureka! that’s why millionaires keep acquiring more and spending less. This is probably the reason why it is effortless for people who have money to stop themselves from being lured to promotional sales, shopping giveaways, etc. They are hardest people to convince to buy something they do not need at the moment.
Stewarding my own finances made me realized that every individual has a “saving threshold”. A point where one begins and is more motivated to save. In my case that would be ten thousand. It was almost impossible for me to reach this amount for a long time but when I did it was easier to be more thrift in buying anything. But when an unforeseen expense came my way and my savings went lower that my saving threshold I was back to square one. So the trick is pretty simple, never fall beyond your threshold.
How to reach your saving threshold? Here are desirable habits that you may start considering in order to manage your finances better. These are compilations of books I’ve read, movies I’ve seen, seminars I’ve attended to and even lectures I gave.
It was from Sophie Kinsella’s, Confessions of a Shopaholic that I’ve learned to write down my expenses every time I come home. It was an effective way to save because I became conscious of my daily expenses. From there I was able to identify what was the big chunk of my day’s expense (food, taxi etc). But the most surprising revelation was those cheap but repetitive charges or payments I made. It is the unconscious and painless payments that made us ask ourselves “Where did my money go?” at the end of the week.
I personally believe that promotional sales are not for everybody. While buying on sale period makes us “save”, zero spending it still better that 70-80% savings in the form of discounts. SALES don’t look for me, I look for it. I don’t buy a thing because it is on sale, I plan to buy a thing and wait for it to be on sale. Typically the world would tell us that this is going to be harder for women that it would be for men.
We all hate it but we can never get rid of it, even if we are way pass college. If you want to save, get the exact figures. Compute your daily, weekly or monthly target savings. Never miss a centavo when consolidating costs. Know your numbers and it will surely grow. Just this year I enrolled in online banking, so I can keep track of all deposits and withdrawals I make (and do away with keeping atm receipts).
When the dead presidents are within your reach, it is harder to resist spending. So I never withdraw cash until I can no longer pay for a cab. Got scolded for this way back college when my sister knew about this habit 😛 For some of us it may also come handy when we someone else saves for us. My mom used to deposit my paycheck in our joint account which made it hard for me to access my money (because I forgot my pincode and was too lazy to do something about it). And yes she saved for me 🙂 Then after a year, I started saving on my own, using my own bank account. I even invested on treasury bonds from a different bank (and forgot my atm pincode again). And guess what? I am now safe keeping someone else’s money too—paying it forward.
I’m no millionaire but I sure have managed my finances well. Hope you learned a thing or two.