And it’s the key to so many things.
Mindfully managing your money simply means that you think before you spend. Which means that you are conscious of the impact on your financial bottom line, you think about whether you really need the item you’re considering, you may also be conscious of the impact on the environment, the difference it will make to your life or that of your families. You may just be thinking about how this item would complement other things in your wardrobe, your home. The benefits of the holiday you’re about to pay for, the time that you will gain from paying someone else to do something.
There are so many things that money can buy, but if we think about the impact of those things, then we’re taking responsibility for the expenditure, the purchasing decision and the impact of that decision.
If the pros outweigh the cons, then that’s a good thing.
If the purchase is going to significantly set back your savings campaign, then maybe there are alternatives to consider.
In my experience, the difference to our bottom line (whether personal or business) is hugely impacted by our spending rather than our earning.
No matter how much money we earn, for most of us, without a plan or a budget, we tend to spend it. If we get a $10K pay rise, we don’t end up with an extra $10K (minus tax) in our bank account at the end of the year unless we implement some good management.
We tend to save a lot slower if we’re just saving our leftover cash at the end of every pay period rather than putting the allocated savings aside first. It’s just so easy to tap, click, tap and just like that, your bank account hits empty again.
If you want to get serious about managing your money, saving for a deposit or a holiday or a car – or anything, you need to plan for it and be mindful of every dollar.
Creating a realistic spending plan that incorporates savings is a fabulous place to start. Simply look at your last 3 months of spending, categorise it in a spreadsheet into groceries, entertainment, utilities, etc, and then start figuring out where you can reduce costs and how much you can comfortably save. Set up a direct transfer of that savings straight from your bank account into a savings account as soon as the funds hit your account. Work the plan for a month, adjust and continue.
It’s not rocket science but it does take some time, effort, motivation and discipline, but the results will be worth it when you make it work for you.
