Money Mistakes That Cost You More Than You Think

By: kjmena

When it comes to money, there can always be problems. Money management is a difficult process but with dedication, you can end up using your money wisely.

However, in order to make the most out of your funds, there are some things you will need to change about your spending habits. Most people think that in order to be good with money they have to either make drastic changes in their lives or be cheap. Well neither is true.

Money management is all about planning; planning on where to spend, how to spend and when not to spend. When you start becoming more aware of your spending habits and making small habits, you will be able to be a savvy money person.

Not Budgeting Your Money

Most people start out with a money management plan but after a while they think they can go it alone and discard their budget. This is never a good idea.

A budget is not meant to limit you but to outline your fiscal needs, objectives and goals. The more detailed your plan, the easier it is to stick to. Also don’t be afraid to change your budget every once in awhile to suit your needs. Every month, you might have different priorities or bills to tackle and won’t the next month so you need to be flexible when it comes to your plan.

In fact, changing your budget periodically can make it more fun to plan your spending habits and make you avoid ditching your budget completely.

Not Limiting Yourself

When you go out shopping, have some goals in mind. First aim for those things and then branch out if necessary. For instance, if you are going grocery shopping, get the items on your list first and then if you aren’t able to find an item, that is when you can get an alternative.

Also if you can’t find anything you are looking for when you do go shopping, think about other options. But make sure they are still within your budget range and item limit. You shouldn’t splurge just because you are desperate, be smart but efficient with your money, no matter the situation.

Not Using Cash

A lot of people think that using cash is too much work, but it’s actually better on your budget to use cash rather than a card.

First of all, you will be able to physically see how much you spend and start to realize your actual spending habits. This will get you to spend less and more frugal with your funds.

Try to start with a small amount of cash and see how far you can stretch each dollar in a day or week. Then try to implement cash as your main form of spending. After awhile you will begin to see the changes in your purchases and how you spend your money.

Making a List

Lists are one of the best habits when it comes to money management because it keeps your goals focused and on track. Not to mention, you will easily be able to see the positive progress you made by changing your spending habits.

A good list, takes note of all the items, even possible alternatives that you might want to buy. Also for even better use, put amounts by each, so that you are able to picture the amount of funds you will need to spend for that event.

List are best, when you don’t want to forget anything and ensure that you are spending your money wisely and not wasting a single dollar.

Being Cheap

Many people think that being cheap is the best way to save money, but it actually can end up costing you more than in the end.

Being cheap doesn’t take quality into account and instead only worries about saving the most money possible. However, there are times that being “extremely frugal” can be useful but only in certain instances.

For example, when it comes to food and clothes, you can be a little on the cheap side as long as you aren’t sacrificing quality because then you will have to buy more or end up not using the item at all. You will end up spending double and not saving any money.

 

With the start of the new year, this is the perfect time to revamp your money management plan and make the best of your funds in 2016. Set out clear goals and commit to them and you will be successful.