Despite all the theories about budgeting and saving money, many people find it hard to make any difference from their spending habits. I have spent the past few weeks talking to family and friends about our economy and how it affects their living conditions, none of them seemed to make any positive changes to their finance, although ALL of them felt the pressure to cut spending.
To me that’s no surprise. Unless you’re truly rich, you must have realized it’s harder to get more pay, while the cost of living has steadily increased, from groceries to energy costs. A year ago, getting a new job with better pay seemed like a desirable plan. Yet today with so many people unemployed and companies reported less revenues, it’s almost impossible to get a higher-paid job for the same employment conditions.
So, if getting more money doesn’t seem like an option to you, naturally you should think about spending less and less. But of course, it’s easier said than done. How many times have you tried to cut spending? How many times have you succeeded? Most people find the answers a good laugh. The truth is, few people are self-disciplined enough to really change their spending habits. But it doesn’t mean you can’t do it. Here’re the few tips:
Take it seriously before you’re forced to. It all starts with your attitude. The recession is very real, no longer a rumor! Treat your money-saving plan like a matter of survival, not a choice. With that in mind, try not to buy something and see if you can go without it. For example, last weekend I was baby-sitting my little daughter by walking her around in a clothing store (such a bad idea). I was looking at the belts and remembered that mine was worn out and badly scratched. But then I stopped and thought, since the store is near my home, I could come back any time later. As it turned out, my belt could actually be switched to the other side to hide the scratch marks, so I didn’t really need another one at all. Now I understand why some people have the urge to buy clothes and shoes that they may not even need them. The point is, you must actively suppress the desire to buy things.
Like everything else, savings take action. If you only think about doing it, you’ll never do it. For example, if you want to stop those pizzas and Chinese takeouts, you got to step into the kitchen, wash dishes and start cooking. Give yourself enough time to do so, and forget about the “alternative cost” concept I discussed before. The alternative costs don’t really work, especially in economic downturn. Why? The alternative costs assume that you can use your time and labor to generate alternative income. But most of the time you can’t do so. Think about it, when you order takeouts for dinner, can you turn that extra cooking hour into money, enough to pay for the dinner? If you can, then good, takeouts are a good option. But for most of regular-job holders like myself, turning that extra hour into even just $20 can be extremely unlikely. So self cooking usually save money.
Be happy with what you have. Believe it or not, this is one of the major factors that get people into bankruptcy. Perhaps we all have the innate desire to enjoy life’s luxuries. So we tend to refer to those who are more fortunate than we are. Because of that, we are usually not happy with life in general. Here’s the deal, you’re what you’re, you can’t be Bill Gates (well, if you’re reading this you can’t be him). So if you must live within your means, be happy with it. Once you realize that it’s all about psychology, then it’s no longer hard to do. Specially, you can simply think about those people who are less fortunate than you are, then you’ll be thankful for and happy with what you have.
The economic recession is here, affecting everyone. It’s plain and simple. So now you have a very good reason to be thrifty with your spending. The next time you feel embarrassed that you don’t look good among your peers, know for sure that all people around you are affected by the economic downturn. So if they’re still showing off, they may be heading straight into bankruptcy.