I pay attention to every dollar. I only buy gas from Costco, I bring my lunch to work, I get books from the library, I cook at home and I drive the wheels off of my vehicles. I contribute the max to my 401k and have an envelope system for vacations and date nights.
Emily, this is a wonderful article. You touched on some incredibly interesting points about the psychology behind some of our money decisions. I, for one, certainly appreciate thoughtful writing.
To some of your points:
For Anchoring, I know I do this when buying something on Amazon, researching a service provider, or looking at items in the grocery store. You get what you think is your baseline or benchmark price, and you use that as a guide for everything going forward. As you said, we don't realize we do this, but when it's pointed out -- wow. I suppose you could say the same thing about paying for gas. I like how explain we should think of it in terms of our pay and time. So, if I make $20 per hour and that trainer charges $120 per hour ($60 for 30 min), then I need to work 6 hours to pay the trainer for 1 hour. Yikes.
For Restraint, I'm going through this right now. I decided give up fried food this year (especially French fries) because I eat way too much of it. However, instead of driving a different route or not even going to my favorite restaurants, I just didn't make it an option. I told myself "NO" before I even leave the house to go out to eat. It's hard at first -- especially when you love "wing night." But, I'm over a month in and it's much easier now.
Again, great article. I'll be sharing it on Twitter and Facebook.
I track every bit I earn and spend. I categorize it, and then, at the end of the month, I write down ways to improve my budget and earning/spending habits. I have found this to be one of the most eye-opening financial habits, as it has led to behavioral changes in many different categories. I have successfully paid off my student loans, while saving 15% of my (rather low income), and I look forward to having my current job pay for me to go back to grad school in the upcoming year. The only debt we currently have is our mortgage. Meanwhile, the four renters we have in our home are helping us pay for our mortgage and most of our utility bills! Reading financial blogs and getting real about my financial situation a couple years ago has been LIFE changing. Thank you!
I track all of my expenditures and every month I try to decrease the amount of money I spend. I also invest at least 50% of my income and try to make my own lunches instead of buying them.
I'm like this a lot. Right now, I'm feeling really bad about a gift my husband gave me that I didn't like. He bought me a new purse because my old one was falling apart and I absolutely hate it. It's really ugly and I can't get my money or cards out of it. Now I'm stuck with something I don't want and I really don't want to hurt his feelings by returning it to the store and getting something else. The worst part is, he knows I hate it despite me saying that I like it.
I keep track of my income and all my spending in an excel spreadsheet. I know there are apps I can link to my bank account, but it keeps me more aware and accountable when I am keeping track of every time I pay a bill, put gas in my van, make a purchase whether it's necessary or frivolous, etc. I did it for the last four months of 2015, all of 2016, and I'm continuing this year. Keeping track all of last year really helped me figure out what I can cut out, what I'm wasting money on, and how much 'little' monthly expenses like the data plan on my cell phone really cost in the long run. It also helped me 'find' extra money and start a Christmas savings account for the first time. Last Christmas I had enough money for gifts, extra holiday food, cards, and decor without touching my regular paychecks.
I monitor my expenditures by getting usage alerts on my credit cards, getting daily balance updates on my bank accounts and monitoring for fraud via LifeLock...all received on my mobile device.
My best new financial habit is to have my bank email me my account balance every day for checking and once a week for savings. It's good for fraud prevention and it's great for making me want to save money.
Does your interview include lunch out? If possible, order a bowl of soup (no, not the onion soup with the cheese, the kind you can eat neatly with a spoon, without slurping). It's hard to be comfortable when they ask a question right after you took a bite of your burger and you are still chewing. Also, less likely to drip ketchup on your suit or shirt. I did this for an interview once. We went to Olive Garden, so the bread sticks helped fill in the corners and I had not overeaten (which makes me sleepy).
Last year, I finally got it together and formed 2 habits that help me out financially - paying off my credit cards and automatically saving for my emergency fund every month. It was a little bit of a challenge because I was paying for a trip to Walt Disney World in November for myself and my niece. It meant September and October were pretty bare but I made it through without breaking my budget or getting into credit card debt.
Tracking our weekly expenses has been the best habit I've developed. It helps me see where every penny is going and make sure it fits our priorities! Also automated savings and investing has been a huge help. I need to make that money disappear before I ever even see it!
ALWAYS paying off my credit card every month, making sure we save for the future and for emergencies (emergency fund is what it's all about.) Have fun with my children while they're living at home, they're going to leave sooner rather than later!
Me and my wife split the bills we each put up the same amount.The problem is my wife makes more then me also I have more expenses coming out of my check.she getting ready to get a promotion and I'm starting to get resentments.she has savings all my money goes towards bills.
Strong list. I'm also a big fan of peer to peer lending and crowdfunding that have been gaining steam in recent years (despite some notable setbacks). Especially with regulations evolving and changing, I think FinTech companies will introduce many more alternative investment opportunities in the near future.
I like to think purchases through for a long time, which usually prevents me from buying anything since I realize quickly I don't need it. Also, I never leave a balance on my credit cards or spend more than I have, which has made me more financially stable and improved my credit score tremendously. That was a hard-learned lesson from when I first got a credit card in college.
I pay attention to every dollar. I only buy gas from Costco, I bring my lunch to work, I get books from the library, I cook at home and I drive the wheels off of my vehicles. I contribute the max to my 401k and have an envelope system for vacations and date nights.
One financial tip I can share is to read as many reviews as possible before purchasing any items. I have saved a lot of money this way.
Great article! Thanks for these suggestions. They'll help me every day.
Emily, this is a wonderful article. You touched on some incredibly interesting points about the psychology behind some of our money decisions. I, for one, certainly appreciate thoughtful writing.
To some of your points:
For Anchoring, I know I do this when buying something on Amazon, researching a service provider, or looking at items in the grocery store. You get what you think is your baseline or benchmark price, and you use that as a guide for everything going forward. As you said, we don't realize we do this, but when it's pointed out -- wow. I suppose you could say the same thing about paying for gas. I like how explain we should think of it in terms of our pay and time. So, if I make $20 per hour and that trainer charges $120 per hour ($60 for 30 min), then I need to work 6 hours to pay the trainer for 1 hour. Yikes.
For Restraint, I'm going through this right now. I decided give up fried food this year (especially French fries) because I eat way too much of it. However, instead of driving a different route or not even going to my favorite restaurants, I just didn't make it an option. I told myself "NO" before I even leave the house to go out to eat. It's hard at first -- especially when you love "wing night." But, I'm over a month in and it's much easier now.
Again, great article. I'll be sharing it on Twitter and Facebook.
Thanks,
Dave
I track every bit I earn and spend. I categorize it, and then, at the end of the month, I write down ways to improve my budget and earning/spending habits. I have found this to be one of the most eye-opening financial habits, as it has led to behavioral changes in many different categories. I have successfully paid off my student loans, while saving 15% of my (rather low income), and I look forward to having my current job pay for me to go back to grad school in the upcoming year. The only debt we currently have is our mortgage. Meanwhile, the four renters we have in our home are helping us pay for our mortgage and most of our utility bills! Reading financial blogs and getting real about my financial situation a couple years ago has been LIFE changing. Thank you!
I track all of my expenditures and every month I try to decrease the amount of money I spend. I also invest at least 50% of my income and try to make my own lunches instead of buying them.
Investing my spare change in Acorns and automating my Roth IRA contributions. Also paying myself first l.
I'm like this a lot. Right now, I'm feeling really bad about a gift my husband gave me that I didn't like. He bought me a new purse because my old one was falling apart and I absolutely hate it. It's really ugly and I can't get my money or cards out of it. Now I'm stuck with something I don't want and I really don't want to hurt his feelings by returning it to the store and getting something else. The worst part is, he knows I hate it despite me saying that I like it.
I keep track of my income and all my spending in an excel spreadsheet. I know there are apps I can link to my bank account, but it keeps me more aware and accountable when I am keeping track of every time I pay a bill, put gas in my van, make a purchase whether it's necessary or frivolous, etc. I did it for the last four months of 2015, all of 2016, and I'm continuing this year. Keeping track all of last year really helped me figure out what I can cut out, what I'm wasting money on, and how much 'little' monthly expenses like the data plan on my cell phone really cost in the long run. It also helped me 'find' extra money and start a Christmas savings account for the first time. Last Christmas I had enough money for gifts, extra holiday food, cards, and decor without touching my regular paychecks.
I monitor my expenditures by getting usage alerts on my credit cards, getting daily balance updates on my bank accounts and monitoring for fraud via LifeLock...all received on my mobile device.
My best new financial habit is to have my bank email me my account balance every day for checking and once a week for savings. It's good for fraud prevention and it's great for making me want to save money.
I log every purchase into an app (currently YNAB), so I always have an up-to-date view of my budget and overall spending.
Does your interview include lunch out? If possible, order a bowl of soup (no, not the onion soup with the cheese, the kind you can eat neatly with a spoon, without slurping). It's hard to be comfortable when they ask a question right after you took a bite of your burger and you are still chewing. Also, less likely to drip ketchup on your suit or shirt. I did this for an interview once. We went to Olive Garden, so the bread sticks helped fill in the corners and I had not overeaten (which makes me sleepy).
Last year, I finally got it together and formed 2 habits that help me out financially - paying off my credit cards and automatically saving for my emergency fund every month. It was a little bit of a challenge because I was paying for a trip to Walt Disney World in November for myself and my niece. It meant September and October were pretty bare but I made it through without breaking my budget or getting into credit card debt.
Tracking our weekly expenses has been the best habit I've developed. It helps me see where every penny is going and make sure it fits our priorities! Also automated savings and investing has been a huge help. I need to make that money disappear before I ever even see it!
I need someone or more to come to my home & take the stuff away. I can't do that,I am on Oxygen.
ALWAYS paying off my credit card every month, making sure we save for the future and for emergencies (emergency fund is what it's all about.) Have fun with my children while they're living at home, they're going to leave sooner rather than later!
Me and my wife split the bills we each put up the same amount.The problem is my wife makes more then me also I have more expenses coming out of my check.she getting ready to get a promotion and I'm starting to get resentments.she has savings all my money goes towards bills.
Strong list. I'm also a big fan of peer to peer lending and crowdfunding that have been gaining steam in recent years (despite some notable setbacks). Especially with regulations evolving and changing, I think FinTech companies will introduce many more alternative investment opportunities in the near future.
I stick to a budget. I also shop sales/coupon which saves me a lot and pay cash when possible.
Paying myself first. I make sure to have money transferred to my various accounts as soon as I'm paid.
"Pay yourself first" is the basis of a good financial plan.
A great financial habit is to put some money from each paycheck into a retirement account.
I like to think purchases through for a long time, which usually prevents me from buying anything since I realize quickly I don't need it. Also, I never leave a balance on my credit cards or spend more than I have, which has made me more financially stable and improved my credit score tremendously. That was a hard-learned lesson from when I first got a credit card in college.
I bring my lunch to work almost every day