SPEND WISELY!

Live On Cash For Two Weeks.

When is the last time you only used cash to pay for your purchases? Debit and credit cards help many people develop bad spending habits and result in their inability to differentiate between what they can actually afford to pay for and what are the avoidable unimportant expenses. With cash, it is very easy to tell if you can afford to pay for something or not.

Your first assignment is to put all of your cards away for at least two weeks. When you need to buy something, you are only allowed to use cash. After two weeks, if you have managed to do it, give yourself a passing grade.

Increase Your Spending Awareness.

Consider what you have learned about your spending habits by only using cash. Was it easier or harder to part with cash than card? Did you only buy things you needed, or was there also enough money to buy something that you wanted? How much did you have left at the end?

Some studies have found that people spend as much as fifteen percent more per purchase when they use card instead of cash. Spending more on every purchase adds up over the years, and if you want debt solutions that last for life, be aware of how you spend your money. 

Find Out Where Your Money Goes - Track Your Spending For Two Weeks.

Where does it all go? Every pay day there is money in your bank account, but it never seems to last long enough.

Your second assignment is to track your spending for at least two weeks. In a little notebook, or by using an application or software, make a note of where you are spending your money. You might want to track how much you spend on certain types of expenses, e.g. coffee or drinks out, or maybe track what you spend in certain stores may be easier. Either way, to pass this assignment, you need to have at least two weeks’ worth of spending information jotted down.

Create A Spending Plan To Solve And Prevent Financial Problems.

Creating a monthly plan for your spending is one of the smartest things you can do for your finances, yet it is the most overlooked solution to most people’s financial problems. Having a spending plan makes life so much easier because you have given yourself a guide to decide how you want to spend your money.

Ironically, it is also one of the things that you will likely never learn in a class at the university. Most schools do not teach students how to create a spending plan. So, to help with this lack of training, your third assignment is to outline your spending plan.

A spending plan based on real numbers sets you up for success, so use what you learned when you track your spending.

If there is an expense you want to cut out of your spending plan, start by reducing it by half. This will tell you if you can stick it out for the long term. If you can make having a spending plan a part of your life, you will know that you have passed this assignment successfully!

Find A Replacement For One Large Expense In Your Monthly Expenditure.

Cutting out an expense or changing a habit is easier if you replace it with something else. For instance, if you want to quit buying expensive coffee on your way to work, plan how you can replace this habit with a new one. You might buy yourself a new travel cup and purchase some coffee in sachet that you enjoy drinking and can be made at home!. Then change your routine so that you are not tempted to stop for coffee by taking a different route to work.

Your fourth assignment is to find one expense that is taking a real bite out of your spending and find replacement solutions. Cutting back on coffee is just one example. What about your entertainment costs, quitting smoking or scaling back on what you spend on hobbies and recreational activities? You will know that you have passed this assignment when all of your bills are paid up to date and you have got a little extra left in your bank account. 

Identify Expenses You Can Reduce.

Over the next month, identify areas of your spending plan that need some special attention. Look for ways to decrease your spending on your utilities. Do your laundry with cold water instead of hot; turn the heat down and the lights off when you are not home. If you have a home phone as well as a cell phone, decide if you need both. Routines can be hard habits to break.

Also identify products or services you no longer need but which you are still paying for. Many people simply let their bundled services renew from month to month, even when their needs have changed. This might be because they are too busy to look at their bills carefully, but taking the time to go through your bills line by line and calling the companies to make changes to service plans, or cancel services altogether, can find a lot of hidden cash.

If you have not guessed it yet, your fifth assignment is to identify what expenses you can reduce and then create the plan to follow through with your changes. You will know you have passed this assignment when your bills get a little smaller.

Create A Plan To Pay Off Your Debt.

Everybody has some debt, so is it really that big a deal? Yes, it can be. If you have debt that has slowly accumulated over a number of years, you need realistic debt solutions that work for your lifestyle, not quick fixes that you cannot live with for the long term. At some point interest rates will start going up and eventually your income will likely decrease when you retire. When either of these things happens, if you have relied on credit to make ends meet, you will find yourself facing some very tough choices.

Dealing with debt sooner than later leaves you with more options. You will only be able to pass this assignment if your plan is realistic and you draw on what you learned in the other five assignments.

Get Help With Your Debts And Your Expenditure.

If you need help dealing with your debts and finances, do not be afraid to ask.

You will know you have passed this assignment when you come away with additional insight about what you can do to deal with your debts more effectively and implement your spending plan realistically. Any good solution takes time to follow through with – your debt did not happen overnight; it will likely take some time to pay it off.

Start Investing Early

Spending your money wisely is not just about avoiding unnecessary purchases – it also requires you to take the money that you save and put it towards things that will help you reach your financial goals. With that in mind, there is no such thing as starting investing too early or investing too little.

No matter how young or old, that you are or how little money you have to invest, putting your money into quality companies that will grow in value as time goes on is always a wise use of your income.

Educate Yourself.

Last but not least, one of the best things any university could instill in its students is the desire to learn more. Any degree of learning from our mistakes is worthwhile, especially when we are educating ourselves about how to manage our money and our debt better.

Your final assignment is to keep learning. Take on more challenges or homework from the school of common sense. Life skills that further develop your new money habits will keep you on track with your spending plan, help you avoid financial problems, and help you plan for your future successfully. And that is a graduation worth celebrating!

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