海角大神

In 2006, my life was a financial mess. I had credit card debt, student loan debt, and a car loan, and Sarah was in the same exact boat. We lived in a tiny apartment with no real hope of moving elsewhere.

By the end of 2011, we owned our own home and were completely debt free.

Naturally, such a turnaround took a聽lot聽of work and a聽lot聽of hard choices, but I鈥檝e found that the biggest difference came from lots of little skills and decisions that, over time, made a huge difference in my life.

These skills didn鈥檛 appear overnight. Instead, they were grown over a period of months 鈥� even years. Eventually, they led to what I would call a 鈥渘ew normal鈥� 鈥� a new 鈥渄efault鈥� way of doing things in my life that relied on these skills.

I could write about lots of these little skills or habits. Here are four of the most powerful ones.

I can estimate my grocery spending with frightening accuracy
When I first started paying attention to our food budget, I quickly realized that I had little sense abut what I was putting into my cart. I was usually completely surprised by the amount I owed at the checkout, but I鈥檇 forget about that bill almost as soon as I left the store.

This approach made it extremely difficult to maintain a monthly food budget for our family. I really had no clue what I was spending, so it was all a mystery to me.

The first step for fixing this was to use a grocery list and to keep careful track of all of the prices on items as I picked them out. After a while, I began to get a strong sense of what various items cost and, eventually, I just started to keep a running tally in my head.

That running tally really helps me keep a grip on my grocery spending. I know our total food budget for the month and because I鈥檓 able to keep a running tally, I have a strong sense as to whether my purchases are in line with that budget. That sense keeps me from buying frivolous things, but it also helps me decide whether to buy 鈥減remium鈥� versions of particular items.

How do you learn this technique? For me, it was mostly a matter of paying attention to the price of everything I put into the cart and keeping a running tally of the cost, rounded to the nearest dollar. Almost always, the total I have in my head is pretty close to what my total is at the checkout.

I can convince myself not to buy things, even after I have them in hand (or in the cart)
I鈥檝e talked abut the 鈥渢en second rule鈥� many times in the past. It鈥檚 an incredibly useful technique for keeping yourself from making unnecessary purchases.

Whenever I have an item in hand that鈥檚 not an absolute need, I spend ten seconds asking myself whether or not I need that item. If I can鈥檛 justify it, I put the item back and wait on that purchase.

At first, the 鈥渢en second rule鈥� was something I had to actively remind myself to do, but as the rule became a normal part of my life, unconsciously executing the 鈥渢en second rule鈥� became a normal part of every purchase. It鈥檚 a learned skill, but one that does a great job of keeping you from buying unnecessary stuff.

I find a lot of pleasure in ordinary, free things
Again, this was a learned skill, not something that came naturally to me. I used to spend hundreds of dollars a month on entertainment expenses, but I鈥檝e gradually reduced that down to a pretty small monthly number.

The big difference was that I began to appreciate quite a few low-cost and free activities. For me, the big one was reading 鈥� I started really utilizing the library in our town as well as free and low-cost e-books for my Kindle. I also cultivated interests in cooking and gardening, both of which were either very low cost or actually saved us money. I also became much more involved in community activities.

For me, the big shift happened when I started looking deeply at the financial cost of anything I might be doing in my free time. If I was considering a high-cost activity, I鈥檇 keep searching for something I would enjoy that costs less. Now, this process is completely natural and I often choose free or low-cost activities by default.

I have a very strong 鈥渘eed versus want鈥� filter
In the past, when I thought about a non-required purchase, I wouldn鈥檛 really think about it as a 鈥渘eed鈥� versus a 鈥渨ant.鈥� My focus was mostly on the short-term pleasure boost I would get from buying something.

Today, when I make a purchase, the first thing I ask myself is whether my family聽needs聽this item. If it鈥檚 not aneed, it鈥檚 going to come out of my monthly entertainment allowance.

Over time, I鈥檝e taught myself to be very harsh when it comes to that question. The vast majority of things I would spend my money on in my life are wants, not needs. Television is a want. Internet access would be a want if it were not a business expense for me. A cell phone is a want. Most things in the store that aren鈥檛 on my list are pure wants.

Knowing that so much of what I聽could聽be spending money on is nothing more than wants makes it easier to keep that spending under control. I just keep in mind that incidental expenses are virtually always wants 鈥� and most of the time, that鈥檚 enough to get me to walk away from them.

The post聽Four Little Habits That Have Helped Me Immensely in My Personal Finance Journey聽appeared first on聽The Simple Dollar.