6 ways to manage your spending habits
For Johnnie, who graciously asked.
First of all, please understand that I’m not that good at controlling my spending, in fact, sometimes I act impulsively and buy things that I don’t really need. So this is not one of those holier-than-thou posts.
My current weaknesses are those boda-boda rides. I justify them by telling myself that they get me around faster, but sometimes, truth be told, sometimes, I don’t really need to take a boda-boda.
Anyways, here’s a little advice on how to control spending, some options are simple, some complex, but they are all feasible.
1. Keep a budget.
Keep a budget, written down and in your head, of all the stuff you need or want, and give them priorities. You should always know what’s needed and what’s not. Also, be aware that there’s a big difference between what you want and what you need. You may want a PS3, but you don’t need it. Learn to differentiate the two.
2. Limit the cash you walk around with.
Like TRP commented in the previous post, don’t walk around with too much cash. It makes buying uneccessary things a lot harder, and buy the time you get your hands on the money, hopefully the impulse has died.
3. Open up a savings account.
Again, as TRP suggested, open up a savings account, one that allows you to make constant deposits, but limits your withdrawals to something like twice a year. The good thing is banks can be very strict, so they’ll keep you in check.
As good option would be to have a certain percentage directly deducted from your paycheck. This means you never even get to touch the money.
4. Do not buy what you cannot afford.
There is a huge huge difference between being able to buy something and being able to afford it. For example, right now, I can scrounge around, get some money and buy a car, but I cannot afford to have a car, simply because the monthly expenses on fuel, repairs, service, maintenance, parking, etc would simply break me. So think about what you’re going to buy, then see if you actually need it, and if you can actually afford it. Typical example is DSTV or GTV. (I know people are going to hate me for this).
5. Spend impulsively.
Yes this is contradictory, but let me explain. Say you suddenly get 500,000/= and you’re excited beyond belief. You can choose to throw it in your savings account, or you can choose to spend it. The trick is knowing what to spend it on (see 1 and 4). I prefer to spend impulsively on something that will bring value and long term satisfaction. Like that new computer I’ve always wanted, or that new brilliant book on marketing, or that 42″ LCD TV, or even donating to the local charity. The trick is to avoid regretting it later.
This particular option is the one I use almost all the time, especially if I have my budget on hand.
6. Invest in something.
The most hassle free investment vehicle right now is securities and stock. Hassle free in that it’s not a business you have to go to every day and micromanage. It does have its risks however, since investing in securities is basically high-level gambling.
You can invest also in mutual funds. These are firms that allow you to invest in an extensive portfolio. You give them your cash, and they spread it around various micro investments, thus ensuring a certain level of returns. The good ones give you advice and tips on how to best manage your investment portfolio.
To summarise, there are many ways to control your spending, but spending is a habit, and it’s not something you break overnight. Work on it slowly, but diligently, and you’ll be well on your way to managing your money.
A good good good book I’d recommend is The Richest Man in Babylon by George S. Clason. I think Aristoc sells it for less than 20,000/=. Its approach is a little unusual, but it has some amazing nuggets of gold in there. And you’ll be surprised at how simple and easy it is after you’re done with the book.
Today’s offtopic is taken from the book.
I’m sure there are lots more ways you can control or manage your spending, so I’ll ask the readers to contribute theirs.
How do you manage your spending?
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Audio: P-Square - No One Like You
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Offtopic:
“Money is plentiful for those who understand the simple laws which govern its acquisition”
The simple rules of its acquisition
1. Start thy purse to fattening
2. Control thy expenditures
3. Make thy gold multiply
4. Guard thy treasures from loss
5. Make of thy dwelling a profitable investment
6. Insure a future income
7. Increase thy ability to earn,“Money is governed today by the same laws which controlled it when prosperous men thronged the streets of Babylon, six thousand years ago.”
- The Richest Man in Babylon
13 Responses to “6 ways to manage your spending habits”
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lulu on January 9th, 2009
those bodas
are a weakness, especailly when the taxi stops 10 miles away from the stage and you are running late!
Miss Cheri on January 9th, 2009
Ayeeeeiii Lulu
U forgot to talk aboput piggy banks for the lose coinage u can’t carry to the bank. Very good at surprising u with how much u save (in coins) over the course of a year. I speak from experience….
Miss Cheri’s last blog post..Merry Christmas y’all
Mr. B2B... on January 9th, 2009
dope post SoloDawg
and yeah, will co-sign with evrything, but just add what the Mrs told me about paying yourself first…
from then onwards, it’s much easier…
and yeah, how come P-Square is on the playlist dawg???
hmmn
didja get the proposal i sent you, i didn’t recieve any feedback from you??
Mr. B2B…’s last blog post..Informally formal
TRP on January 9th, 2009
((looking sheepish)) Spend impulsively….Never heard of it
About the investing stuff…I find it abit hard to understand, these guys cum to - convince you to try and buy in then the next thing you hear - “Hundreds cheated out of stock/shares”???? Wassup with that? How do i know am not buying air?
TRP’s last blog post..Equipping/Syllabus/The 500
Frank on January 9th, 2009
Cant agree more. esp the part about being able to afford something b4 buying it. I have wanted a PS3 for like 2 years as well as the 42″ LCD but I didn’t abandon my other obligations to get these items. I have taken the same amount of time saving up. The LCD is on the container right now, though the PS3 is already on my media rack .
it feels great to finally get the things you really want.
The Emrys on January 9th, 2009
i have this habit of saving all the crisp looking dimes i get, that is new, fresh looking dimes, be it coins. of course its rare to come across new money but when you do its usually in big denominations, i never touch it.
Solomon King on January 9th, 2009
@Lulu, I know! I once sat on one for 3 hours and racked up a bill of almost 15k.
@Miss Fyne, can you imagine I’ve never owned a piggy bank?
@BDawg, just fired off a reply. And dude, that Sqaure song is dopeness.
@TRP Sheepish indeed. You have to be wise in your choice of mutual funds, of course. And it’s not buying, it’s more like investing in a company that invests in other ventures.
@Frank, 42″ and PS3 eh? Congs man!! Moving up the elitist chain lol. Thanks for dropping by!
chanel on January 9th, 2009
Make a tight budget to take you through the month, deduct it from your earnings and save the rest. Then make sure you live on that TIGHTBUDGET. You know if the money is not there to spend you still get on with life through to the next month. Take all the money out of the bank n put it in a hole. The bank is cheating you big time
chanel’s last blog post..Ask.com
Solomon King on January 9th, 2009
@Emrys, dude… what happens when it’s only old notes in circulation??
@Chanel… the money in a hole thing makes tonnes of sense, lol! I like the budget part though.
Emi's on January 10th, 2009
I also spend Impulsively sometimes…….
When I have plentiful, I always throw away the money to people who might need it and wow you have an account. I kinda look at it as building up my favor account such that in times of need ( or when I sense it coming) I go to my favor bank. Dawg, if I gave you 300k in your time of need, you’d sure be grateful for life and always want to bail me out too.
My favor bank is currently doing well only hope it’s not hit by this credit crunch
Emi’s’s last blog post..End of 2008: The Year Regrets
Sybella on January 10th, 2009
oh my goodness the emrys, i do the same thing!
are we like destined to be friends?!
investing in assets or with one of the financial institutions and a savings account are definitely a good idea… even if you start off with 50k and put 20k a month, it is better than nothing…
Sybella’s last blog post..Aaaaarghhh
val on January 10th, 2009
Hmmmm….I like all these ideas.
Like Cheri I save my coins….and try and save up for the stuff that I want…..live within my strict-ass budget (not much of a choice)…..
Try and not keep up with the Joneses (aka richer pals…life of misery that wud be)
Errrmmmm……credit cards…owwieee….extreme caution with this one…
and I still need lessons…drat!
val’s last blog post..Muzina, Loi, Ultimatum….and other classics
Johnie on January 13th, 2009
Seeing that i asked for this advise and yu responded, am so privilledged.
Imagine ive been away from friday till today just spending like a fool.
My biggest problem is i have never felt any confident without my ATM card in the wallet. I guess ma 1st step is to throw the bloody card away then ill take up yo various steps next.
Otherwise, thanx 4 the advise. i appreciate.