Thursday, July 30, 2009

Get a New Attitude

Yahoo! Finance listed 20 ways to save money this week. This is a great collection of tips that everyone should adopt, even if you are flush with funds. Money should not be wasted, when there is so much good it can do either for yourself or those around you.

But if thinking about your personal finances gives you heartburn or makes you a little uncomfortable, you may have to work on your relationship with your money. Rather than ignoring, repressing, or pretending, here are a few ideas of how you can relate to your finances a little more positively:

  • Instead focus on how to best play with your limited pile of of money. Do not focus on making your pile of money bigger. We spend hours generating cash, then blow it in seconds on things we don't need. Focus on how to best use your existing pile.

  • Get your pencil and paper out (or your laptop) and write down an estimate of your extra "play" money -- money left over at then end of the month after the bills are paid. Then plan and control how to best use this play money and pick one or two goals. Like a kid with birthday money -- do you spend it now on a toy or save it for something bigger?

  • When thinking of the best use of your money, consider two things: relationships and happiness in the long run. Investing in a grill means you can invite your friends over, and will add more meaning to your life, while wasting it on expensive junk food at the gas station because you need a pick-me-up will make you feel worse later.

  • If you don't have any extra funds left over after the bills are paid, a detailed, written budget is even more critical. You need to evaluate areas that are a lower priority in order to cut them out. I will write a post soon on why you need to set up a plan for your money, and how to easily create this plan.

  • You also need to challenge yourself to see “how low can you go”. Every time you are about to spend any money, ask yourself if the item is a “need” or a “want”. If it is not absolutely necessary, consider an alternative -- borrow, garage sales, do without, etc. Challenge yourself to be creative.

  • Set aside cash in an envelope or in a separate savings account for infrequent expenses you normally forget throughout the year. Even if it's a small amount, it will add comfort to know its there so you are not depressed when the annual insurance bill comes in the mail.

  • Remember to recognize and appreciate the non-cash wealth you have. The wealth you enjoy while millions are denied: a roof, food, limbs, eyes, medicine, safety, freedom, life.

Once you accept you have limited funds, take a second look at how you really want to best spend your pile of money, understand your spending habits after your compare what you spent to what you planned, and appreciate all that you have right now, you might find that money is a good thing.

Your gut will tell you when that happens.

3 comments:

Katie from Bloomington MN said...

Hello-I love your blog; a friend sent it to me as we have been talking a lot about money and that trapped feeling. I am one of those avoider types with my finances, but I recently paid off my credit card, and I'm so much happier! I'm trying really hard to pay cash (use debit card), save for what I want to buy, buy used etc. I only had one credit card, but man I hated that bill! It was an awful feeling to pay later and ongoing for what I already had or used up. I love your book list too, keep the posts coming!

Anonymous said...

What would Colleen Bean do?
I am going to Los Angeles with my two teens and we're planning to go to Universal Studios. Thru my AAA membership, I can purchase tickets ahead of time at my local AAA office for $10 less each. Gate price is $64 so discount tix are $54. There is almost no chance that we wouldn't go, but I almost hate to take the risk. What if I lose the tickets? What would you do? (not going at all is not an option. I really want to go and have planned this as an expense and will be paying cash/debit card during our trip)

Colleen said...

Thanks for your question. I would suggest waiting rather than buying your tickets now, since the discount is not significant and you will probably find several other "deals" to choose from once you get there, given the poor state of the economy.

Have fun on your trip! Sounds like you already know you can be frugal and still have a fun trip ~

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