Remember the last time you took cough syrup. Most likely, you poured it into a special measuring spoon that comes with the medicine. And they certainly didn't use a huge cup, hoping to calculate the dosage correctly. Personal finances should be treated in the same way. This means pouring a certain amount of money into a suitable container (bank account) every month to make sure that you consume (spend) exactly as much as you need. However, often the costs are not equal to how much you need to spend, but how much you can spend.
To find out if you are wasting money, pay attention to several signs:
Even if you don't have any problems with extra spending, spending control will help you increase your savings and start managing money better in accordance with your values.
A separate spending system will help to keep the budget correctly. To switch to it, you need to do the following:
Such a system will allow you to spend a strictly defined amount on entertainment. If you don't set up a separate account for this, you will have to manually monitor how much you spend, for example, record everything in notes or banking application.
The split-account approach will not require you to do tedious accounting, you just need to regularly monitor the balance. Once a week to assess the status of both accounts and each time, before going to the cinema or meeting friends at a restaurant, check how much money can be spent from the account for entertainment.
It is useful in situations when you need to pay several bills at once, and the receipt of funds to the balance is postponed for one reason or another. The ideal amount is all the primary living expenses for a month.
A quick, but not the most pleasant way to raise a reserve fund is to completely abandon entertainment for 1-3 months. If you are not ready for such sacrifices, then gradually replenish both accounts.
When you go to have fun with friends and don't want to spend too much, leave the card tied to the account for current expenses at home, or withdraw the amount planned for entertainment in cash if you have the only card. This will help to refrain from making decisions that seem right only at the moment, for example, paying for everyone in the bar.
Of course, you can still use a smartphone and a banking app to treat your friends. But remember: the quality of your spending can be significantly improved if you avoid situations that provoke rash decisions.
Imagine a young man who grew up in poverty. He dreams of his own home and is sure that this will bring him happiness. He does everything possible to achieve what he wants, and at the age of 25, after graduating from university and working hard for several years in a stable job, finally takes out a mortgage. He's happy. But two years later, his friends move from a rented apartment to their house. And his own living space no longer seems to him as luxurious as it used to be.
Our opinion about what will make us truly happy is constantly changing, and the ways to achieve happiness are becoming more expensive. Of course, there is nothing wrong with setting ambitious goals for yourself. But the constant striving for more can be destructive.
When we associate our well-being and enjoyment of life with external factors, we fall into the trap of hedonistic adaptation. That is, our level of happiness always remains stable, and we quickly return to it even after important positive changes. In other words, no matter how much power and money we have, we always want more.
An alternative to hedonism is eudaemonism. It has six dimensions:
No special technical skills are needed to apply the separate spending system. It only takes time and focused effort. Effort is something you can control and even turn into a habit. So, it all depends on your desire.
