Are Your Financial Habits Just Bad?
I own one of those electric toothbrushes, and I brush my teeth for the full two minutes that the manufacturer suggests. This is easily accomplished, because the unit comes with a timer, which tells you when 60 seconds have elapsed. It even sends me an indication every 30 seconds so I can further divide the time to brush the four areas of my teeth evenly. I love the idea, but I realize that it's got a flaw — a pretty big one actually. You see, I always start with the top left hand corner, and go clockwise. Without knowing, I always exposed the ones in the top left the most toothpaste, and the bottom left the least. Sorry bottom left!
Another example involves cutting cakes. I always start out with huge pieces, and progressively cut smaller and smaller because I continually overestimate how big each slide should be. My engineering friend once told me that a circle has 360 degrees, so if you want to evenly cut any number of pieces, you just divide 360 by the number of pieces...never mind. This is a personal finance article actually. Way off topic!
Do you do this with your finances?
Luckily, this is never a problem with my finances. I don't ever run out of money a few days before my next paycheck, and I never spend more on the Friday that paychecks come. Disclaimer: I am a business owner and don't receive regular paychecks anymore. But I never had this problem even when I was a salaried employee either.
There are a zillion reasons why this situation hasn't happen to my finances, but here are five few major ones worth discussing.
1. I am conservative.
I am generally a careless person and thus take big risks every once in a while without knowing simply because I haven't thought it through and went ahead to take action anyway, but I definitely try to be conservative at most times. I'm definitely a saver, and that helps me build a big enough cash reserve that weathers any emergencies.
2. I live below my means.
It's simple math. If you always live below your means, then you will never run out of money. The excess is saved, which helps give me comfort that even if something were to happen to my business, my family will be okay.
3. I am a simple person.
Simplicity is not only beautiful but inexpensive to maintain. If you like simplicity, you don't like to accumulate stuff. If you like simplicity, you don't need to buy six different machines that does a similar job. If you like simplicity, you will simply spend less.
4. I love my work.
Enjoying my work as much as anyone would a hobby allows me to spend more time on it than anyone could in a 9-5. When you are thinking about your business all the time, you just don't have much time to think about spending, even if you just got the biggest check ever.
5. But most importantly, I am happy.
There was a time when I was buying way more than I do now. Eventually, I realized that I was trying to fill an emotional need by making purchases when the root of the problem was simply because I just wasn't happy. I am now happily married and my wife just gave birth to our beautiful girl named Sara. My life is predictable, in the best possible way.
How about you?
There really is no need for me to spend much and money is not really a concern anymore. But how about you? Do you worry about money? Do you find a need to spend more as soon as your paycheck arrives? Why do you think that's the case?
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