This week’s financial tip from BMO Harris offers helpful steps to control your spending, both personally and in your business.
Wondering why you can’t seem to manage your spending? One reason may be a tendency to confuse what you need with what you want, which can lead to unwise buying decisions.
While there’s nothing wrong with buying things that aren’t exactly life’s necessities, doing this too often could get you into financial trouble.
Here are a few tips that can help you gain control of your spending.
- Before you buy, pose the “want versus need” question. Each time you go shopping, ask yourself whether the item you’re considering is something you really need or something you just want. You’ll be surprised at how often you end up putting something back on the shelf because, let’s face it, did you really need another black sweater or that new set of high-tech golf clubs?
- Learn to delay gratification. All right, so you’ve decided that you need to take that one-week getaway to the Bahamas. Your job is extremely stressful and you’re at the breaking point. But before you book your flight and hotel, sleep on it. You may still feel the same way in the morning, but it’s good practice to take some time to think before you buy instead of constantly making impulse purchases.
- Make a shopping list. Before you head out to the supermarket or shopping mall, make a list of the things you want to buy and the approximate cost of each item. Then add everything up. If the total exceeds what you can afford to spend, go through the list and put each item through the “want versus need” test. Highlight the “want” items and take them off the list one by one until you reach a more mreasonable total.
- Don’t forget to reward yourself. While managing your spending is critical to a sound financial future, it’s also important to enjoy your money. So if your budget allows it this month, go ahead and treat your family to dinner at that ritzy new restaurant. Or buy that mobile phone with all the bells and whistles you’ve been dying to play with. By keeping your indulgences within a reasonable limit, you’ll enjoy them more knowing you’ve got your spending under control.