Many people in society today tend to have loose spending habits
They see something they want, and they purchase it
While there is nothing wrong with buying the things your desire, the problem comes at the end of the month when you receive a credit card statement that makes you consider committing arson to your home for the insurance claim
Fear not
I have recently been enlightened with a simple method for you to buy the things you love, without breaking the bank
I recently read the book, “I Will Teach You To Be Rich” by Ramit Sethi. In the book, he describes many different meager changes people can make in their lives that will allow them to save astronomical amounts of money in the short and long term
One of the things he discussed that truly intrigued me was the concept of being frugal vs. being cheap
He describes being frugal as buying the things you love, over the things don’t love as much
And he view cheap as people who basically try to cut down costs in all areas of their life, which both Ramit and myself agree is not the best option
In order to be effectively frugal, one must decide what it is above all else that they love
Maybe you are a lover of restaurants and nightclubs and enjoy spending money at nights out on the town
Maybe you love shoes, and you tend to buy more than ten pairs a month and cant live without the new Manolo Blahniks
Or maybe you’re a coinsurer of world traveling, and like to get out of town at least once a month to an exotic location such as Costa Rica or Paris
Wherever your passion for spending lies, everyone has one or two areas that they value above all else
As I stated before, the problem isn’t spending, but rather spending on to much
Sit down and really think about what you love to spend your money on, and make a personal commitment to spending on that type of purchase above all else
The second part of this exercise is to find out where your other spending habits lie, and find ways to trim them effectively
Assume for a moment you are making $70,000 a year, are passionate for traveling, and are spending $1,200 a month on traveling and another $3,000 on eating out, nightlife, clothes, electronics, etc
This spending pattern can get destructive very quickly
Instead limit going out to eat to $100 a week maximum, and maybe only go out and spend $75 on nightlife. Also limit yourself to one electronic purchase a month (and it must be under 300 dollars) and only spend 200$ a month on clothes
If those simple choices are made, you could reduce your $3,000 a month expenditures to under $1,000 with little to no effort
Now that you are saving roughly $2,000 dollars a month, you can increase your traveling budget by $600 to $1,800 or even to $2,000, and save the rest
By doing this you will save more money and effectively be able to spend more money on the things you love
You will be able to go on two trips a month instead of maybe one, or be able to go shopping every other weekend instead of once a month
All guilt free
You will find yourself stressing about credit card bills and online bank statements less, and enjoy more of the things you love right now
Go out and try it now
Gabriel
I love the logic and intuition here. I agree with this approach. I don’t think that I am a cheap person myself, but I do see myself as more frugal than not. I still like to spend money on the finer things in life, however, I always temper every non-essential purchase with the thought about whether or not I have enough savings for rainy days or for long term goals.
Maybe this is because of the line of work that I am in, but in any case…using these useful tips can go a long way.
Enjoyed this post. =)
Thanks for the thoughtful response experienceauire 🙂
Indeed useful. My problem is not even having enough money to spend on the things I love. lol real unfortunate I know. I barely spend money on myself. 80% of all of it goes to bills and food. What little I got left isnt much so I guess its good I like to play disc golf and video games. both not expensive. Since getting my hours cut at work, its been like, I can do all the things I used to like doing like going out and nightlife. All of that gets strip away cause the hours really do add up. but anyways, i can see if you did have that much money as your deposal, this can be very useful to keep your spending habits under control.
@Mike
Spending money the way you want to can be very tricky. I might suggest you develop an envelope system where you accrue a specific amount of money for food, gas, toys, going out, etc each with a budgeted amount of money for each month that you could figure out with some simple math calculations. That way when you want to go out on the weekends you know you can go spend money guilt free because you you have predetermined how much “going out” money you can use in a given month. Ill be posting something more in depth about this in the future