You may not think your emotions don’t have anything to do with your shopping habits but you’re wrong. Impulsive buying, addictions and how you were raised also play key roles in your shopping habits. Learning how to get your emotions under control and training yourself to spend wisely will help you take back control of your finances.
How you were raised has a lot to do with how you may spend money today. Different factors come into play here such as if your parents were savers or spenders. Also, the lifestyle you may have had growing up determines how you handle your finances now. Most families at one time or another have had struggles in their household, and some seemingly struggle more than others. Growing up in this manner may cause your shopping habits to be more impulsive. Or, you have trouble saving money. It’s important to be honest with yourself and determine if your family values while growing up are in tune with your family values as an adult. In other words, ask yourself if you are spending on a want or a need and determine if your parents shopping habits are the right fit for you.
Wants vs Needs
Everyone wants things. They want nice cars, big houses, expensive clothes, or immaculate furniture. There’s absolutely nothing wrong with wanting things. The problem is when your wants overshadow your needs. Your needs are things like mortgage or rent, transportation, electricity, water and food. Needs can also be things like business attire, gasoline, toiletries and so forth. Alternatively, your wants are things like a larger-than-life HDTV or buying new truck when your current vehicle is not too shabby! After all, it gets you from A to B, right?
When spending is focused on your wants instead of your needs, then, obviously your needs will not be met. Budgeting plays an important role in spending habits. A budget will help you map out all your expenses or needs for each month. If you don’t have enough to take care of your needs then your wants should wait until another time. A good way to avoid spending unnecessarily is to not shop before all your expenses have been paid. Also try to avoid buying big ticket items on impulse, rather, go home hone and sleep on it. Evaluate if the item is a want or a need and then make your decision.
Paying Yourself First
Paying yourself first means to set money aside for yourself at a later date. Many people set aside monies for savings but may have to “dip into their savings” for one reason or another. It makes good business sense to have a savings, but it makes even better sense to put your savings to good use. Consider online savings accounts that offer high interest rates and set aside a specific amount each month for the future and “forget about it”. This amount can be $20 or $200, whichever is more comfortable for you. Watch your money grow towards use for retirement or business investments.
Personal Spending vs Business Spending
Bad personal spending habits leads to bad business spending. This is especially true with small business owners because they tend to handle all the aspects of spending. Any good business has a budget and tries to stick to it. Overspending or unnecessary purchases can lead to business needs not being met. In the business world, your credit worthiness is just as important as your personal credit. Businesses suffer when their needs aren’t handled. Employees wouldn’t be able to get paid, vendors wouldn’t supply your needs and so on.
The same lies true with business investing. A good, solid investment decision is not handled impulsively. Research is done, all the pros and cons are weighed in and a decision is made. Don’t make the mistake of carrying impulsive spending habits over to your business. Do your homework and ensure that your business investment is a good choice for your business. Improper spending is one way to mismanage a business and it can end badly. Don’t jeopardize your business by making unnecessary purchases or putting off paying the bills.
It’s Like Riding a Bike.
Making changes in your spending habits is a lot like riding a bike. First, it’s a little bit difficult, but then it gets easier to do the more you do it. Sometimes you fall off, but you can get back on and try again. With practice and perseverance, changing your spending habits is easily obtainable. It starts with recognizing your own spending patterns and figuring out where changes need to be made. Do you shop on impulse or do you plan big purchases? Do you spend to change your mood or do you selectively choose your purchases?
Jot down obstacles to spending wisely such as addictions or habits. Determine if your weekly trip to the movie theatre can be replaced by renting a movie. Or, can you drive an economy car instead of an SUV to save money on gas, insurance, and your car note. After you’ve identified where you can make changes, implement them. Keep in mind that your spending habit is just that, a habit. You have to unlearn the way you’ve been spending and teach yourself a new method. Don’t be discouraged if you’re tempted. Just try your best to stick to your guns.
After making these changes in your personal spending, your experience with business ventures will improve as well. You’ll be better prepared to make wise business choices. Your investments will be more solid.
Each experience you’ve had growing up and watching your own parents spend and save money is a tool to be used in your present life to determine if your parents’ spending habits should be your own or not. Remember to take care of your needs first and then your wants. Always pay yourself to have capital down the road for big purchases such as a house or car. Use the changes that you’ve made in your personal life in your business as well and watch how much more successful and stable your business becomes.