A few years ago, I was scraping by in Manhattan, overdrafting left and right on my checking account like it was going out of style.
I was sort of on the way to becoming financially solvent— Wasn’t paying rent on time the first step? I certainly thought so.
Back then, money matters were a haze to me, as they seem to be to the millions of people who get by day-to-day with nary a thought about their future.
Today’s news that low-income people are fleeing the big banks in droves due to onerous fees is not surprising, given that everything counts in small amounts when you’re struggling.
But while so much needs to be done on the banking and jobs front, there are still some ways to make the most of your shoddy finances. What I’ve learned over the years, and what one of my favourite bloggers, J.D. Roth, often discusses on his blog, is that one of the first steps to getting a positive cash flow is eliminating the things that don’t matter from your budget so you can spend on the things that do matter.
This means cancelling cable (or Netflix) if you don’t watch it, saying no to the booze-soaked brunches when you’re too tired to attend, and trading a night on the town for a walk in the park.
Personally, ditching my Netflix subscription and cutting out those $40-a-pop brunches freed up a lot of cash I was frittering away. It helped me put more towards my emergency fund for Ringo, my wayward cat, and prioritise bills without having to scrounge up the cash last-minute, millennial style.
Ultimately, it’s all about prioritizing and values. I value Ringo’s health over unlimited bellinis. And travelling home to Texas, goofy as that state may be, means more to me than a night in with “30 Rock.”
Here are some ways to make conscious spending work for you:
Ask yourself if it can wait. Do you really need that chai latte/silk blouse/$10 falafel lunch right now? Especially when shopping, I like to put something on hold and wait a day. If I’m still thinking about it tomorrow, then I’ll go ahead and buy it.
Be honest about what’s driving the purchase. Is this really about craving falafels or … the clown who dumped you on Valentine’s day? (True story, not mine.) Emotional spending will not fill your needs.
Finally, here’s a great tip from Roth: “Is there something else I’d rather spend the money on?” Nothing motivates like realising you want something more! Whenever I’m about to get suckered to spend on crap, I try to ask myself what I’ll sacrifice down the line.
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