American coach John Wooden had an interesting quote –
“It’s the little details that are vital. Little things make big things happen.”
Stretching the quote out in relation to how to control your spending, have you noticed significant increments on your savings when you set aside money (even a little) for it? Do you think you can get rich by controlling your spending? There may be other reasons why you need or want to control your spending but getting rich?
It sounds ridiculous but you can indeed get rich by controlling your spending. In this article, learn ways how to control spending and figure out later how they can help you get rich.
First – Escape from Potential Money Problems
Most of the time bankruptcy and other money problems arise from a number of reasons:
- Unnecessary spending on things that you do not need
Impulse buying causes lost money. Buying the things on compulsion will make you regret the decision later. Buying the things that you only want but do not need will create a big dent on your savings. Without thinking first and weighing the pros and cons of spending money on unnecessary things, you end up paying money for the not-so-important ones.
- Foolishly neglecting to save money for the future or for emergency
Some people say that we cannot bring our riches to the grave. It sounds like a matter-of-fact way of thinking. These people do not understand that getting rich is a personal thing. It can mean a lot to a lot of people but mostly, it means independence. You may not get rich like Steve Jobs or Bill Gates but it surely feels you are rich if you are financially free, not depending on others for your financial needs.
- Intently postponing paying your financial responsibilities
One of the biggest mistakes to make is to heed the advice of other people not to pay your financial obligations on time. They believe that eventually the bank’s system will erase your credit card balances so you can postpone the payment. Some people also have the same idea for personal loans where the lender will eventually ‘forgive and forget’. The drawback of listening to these ridiculous ideas is you end up paying more because of the interests incurred.
- Unknowingly waste money on interests incurred from minimum payments
If you have a credit card, it would be wise to pay more than the minimum payment that you can make. Other than incurring more interests for the remaining balance, paying the minimum will lengthen the time for full payment. Control this tendency because you will be spending more on interests and other hidden charges.
Second – Find Ways to Cut Your Spending
Then you ask – what expenses do I need to cut or lessen? Taking time to examine your finances, which includes your income and expenses, will let you discover that there are things in the list you really do not need, or can do without, for the meantime or maybe forever.
- Food expenses
If you eat out often with your family four (4) to five (5) times a month, think of how much you can save if you cut it to once a month. Let’s peg the amount to P 2,500 pesos per week, that would amount to P10,000 a month.
With P 2,500, you can buy a lot of food for two weeks already. You just have to do your own cooking which can improve as time goes by. Imagine what financial opportunities a P 5,000 savings can give you. If you will use it for business, it can grow big.
- Transportation expenses
With too much traffic along Philippines’ thoroughfares, owning a car is not a solution, much more owning more than one. Just think of the money you can set aside for the maintenance and insurance of your car.
If you spend P 2,000 a week for gasoline that would be P10,000 a month, too. If you have more than one, let’s say three cars, selling the two will not even cut your spending big time but will add more to your savings. If you do not intend to sell, you can use your other cars for business opportunities.
Another way to save money is to consider public transportation. If you can manage going places using public transportation only or better, your bicycle, you will save a lot.
- Telephone or communication expenses
Control your urge to buy the latest cellular phone if you still have a handy and functional one. You do not need to buy on impulse or because of influences. You will save lots more money and get richer earlier than expected if you do not give in.
One way to cut your spending is to downgrade your cell phone plan. There are a lot easier options in the market.
- Travel expenses
Travelling is an expensive activity. You will definitely disagree to the idea of entirely canceling all your travel plans. Reduce the frequency if you can. If you travel monthly, why not do it per quarter? You still get to travel and at the same time, save money.
There are also cheap travel deals that you can take advantage of. A lot of these deals offer half (and sometimes more than half) of the airfare to a chosen few destinations.
There are a many ways to control your spending. The above are just one of those common ones. Considering other things like insurance plans, subscriptions from many services and memberships, seasonal activities, etc. to cut spending and save more money will help you get rich sooner than expected.
Of course, you do not get rich quick, or you do not become financially independent faster as you would want it happen. You have to work it by managing your financial documents efficiently. As soon as you have accumulated enough, you can consider back the many expenses you have cut. After all, you have probably learned what is or what is not helping your financial goals.
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