money challenge day 3

Money Challenge Day 3:
Build Your Financial Toolbox
by Noah Clyman, LCSW-R

Now that you have some self-awareness into what you spend and why, the next 2 days will focus on tips to change your spending habits. Telling people how and where to spend their money is a risky undertaking because most people like to spend money and hate to be told what to do. You’ll be glad to hear that I don’t tell you how to cut your spending. Instead, I detail some broad strategies that I have seen work for myself and many of my clients. The final decision for what to change rests solely on you.
 
Live within your means and own your means.

​Spending too much is a relative problem. Two people can each spend $40,000 per year and still have drastically different financial circumstances. How? Suppose that one of them earns $50,000 annually while the other makes $35,000. The $50,000 income earner saves $10,000 each year. The $35,000 earner on the other hand, accumulates $5,000 of new debt. So spend within  your means.
Don’t let the spending habits of others dictate yours. Certain people — and you know who they are — bring out the big spender in you.
 
Homework: Identify the people, or situations, that bring out your unhealthful spending habits. Write them down. Ask yourself, “What can I do with this person besides shopping and spending?” If you can’t find any other activity to share with them, ask yourself, “How can I stand up for myself if they push me to spend money?” and “How can I lessen the damages when I do make a purchase? (for example, shop with limited cash and no credit cards).”