Recently on our forum a user asked, “I find myself on the brink of financial disaster for the second time in my life. I am only thirty years old. I have a decent paying job. I am at a loss. I am wondering if you can give me any tips for saving money and re-establishing financial control before I have to declare bankruptcy a second time.”
Although there are many reasons for filing for bankruptcy protection – divorce, death, serious illness- one of the number one reasons is more simply overspending. Interestingly, most overspending comes down to one simple principle: the inability to delay gratification.
What is delayed gratification?
Delayed gratification is simple. It’s the ability to resist the temptation of immediate reward for a greater reward later. It’s saying no to that morning Starbucks coffee and instead investing that $5.00 per day into a fund to purchase a new home.
Not surprisingly, studies indicate that individuals who can delay gratification have fewer behavioral issues, have higher test scores, complete college at higher rates, earn higher incomes, have lower rates of incarceration, and are less likely to struggle with alcohol and drug addiction.
With these statistics, it’s clear that your ability to control your impulses, can not only help you gain control of your finances, but it can also help you have a more successful and satisfying life. Assuming you can improve your ability to delay gratification to improve your finances, let’s take a look at several other steps you can take to save money.
Steps saving money to improve your finances
- Stop spending money.
If you want to improve your financial status and move from the brink of insolvency, you will have to save more money than you spend. First, you will need to eliminate all impulse purchases. Next, you need to take variety of other cost-cutting steps:
-Buy used whenever possible
-Use coupons and reward programs
-Avoid eating out
-Drink more water
-Cancel unused subscriptions
-Perform regular maintenance on your house and car
-Shop for deals online
- Create a budget and stick to it.
Another way to get your finances back on track and cut spending is to create a budget. Utilize free online tools to track your income and spending. If necessary, cut up your credit cards and only spend cash. Some experts suggest using what they term the “envelop method” which separates spending into categories each month and users are allowed to spend money for each category until the envelop is empty.
Experts also suggest that a list should be generated before every shopping trip. Make a list and stick to it. This will help you avoid impulse purchases.
- Avoid shopping.
It may seem like a simple step, but one of the best ways to avoid spending money is to avoid the mall. It can also help to turn off the television. Not only does this lower your electricity bill, it also helps lower interest in purchasing unnecessary items.
- Don’t spend too much money entertaining your kids.
Every kid loves a trip to Disney World, but they also might like a weekly trip to the park just as much. Do some research and find some inexpensive or free activities you and your children can do around your city.
- Stop eating out.
If most of us are honest, instead of saving money, we spend hundreds of dollars each month eating out when the same food could be prepared and eaten at home for a fraction of the cost. Stop eating out so much and you could save big bucks.
If you are over spending and not saving money there’s a good chance that at the heart of the matter you have difficulty with impulse control. Solve that problem, and there’s a good chance that your finances will improve.
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