Money Control

If you are having problems with your finances it may be that have an addiction to spending money. This may seem bizarre given that addiction is commonly linked with alcoholics, drug addicts and gamblers. But addiction is a behaviour that many people use at some time or another to change their mood.

Jim Orford, PhD in the addiction Research Unit of Institute of Psychiatry and author of Excessive Appetites, one of the leading key texts in addiction, writes that “an addiction is an excessive appetite whatever its object and the personal inclinations of appetitive behaviour may be used by peopleto change their emotions.”

It is usually the small shopping excursions that do the most damage to your budget. Those cheap items in the fashion stores can make a huge dent in your wallet over time. A pound here and two pounds there adds up, and if you are needing a pick-me-up this is not the way to do it.

 

 

Justifiying Your Impulsive Shopping Spree

In an impulsive shopping spree reasonable thinking has disappeared. The Collins Pocket Dictionary, (1981) defines impulse as “a sudden inclination to act without thought.” So, if you are not thinking you cannot be in control of your actions, and you leave yourself wide open for anything to happen, which is what happens in addiction.

Being driven by justifications in spending money such as “I gotta have it, it is so cheap, I need it now” is only imploring your behaviour and giving yourself reasons to continue using the behaviour. Your actions are already out of control.

Know what is Driving Your Adictive Spending Habits

To take control and make sound spending decisions you need to hear the thoughts that drive you to spend impulsively. “Getting to know your enemy is a first step in peace building,” says Stella Cornelius of The Conflict Resolution Network.

Feelings are a good guide. There may be a rush of excitement, adrenaline being pumped through your body as you follow your impulsive thoughts. And each time you let the impulse drive you, you are losing control and becoming addicted.

It is no different than the alchoholic that has allowed alcohol a free reign. “One is never enough and a thousand too many” – Twelve Steps.

Using Mindfulness

Thich Nhat Hanh, author of The Miracle of Mindfulness, says in explaining about meditation, “if you want to know your own mind there is only one way: to observe and recognise everything about it.” This must be done at all times, during day-to-day life no less than during the hour of meditation.

Tips to Empower Your Spending Habits

1. Slow down – learn and practice some relaxation on a daily basis, this will help in self-control
2. Add some positive thoughts to your mind such as: I have plenty of everything for what I need in the here and now
3. Learn to nurture yourself so you are not so needy and wanting for material things
4. Keep a spending diary – write down every penny you spend
5. Seek support from financial cousellors – you don’t have to struggle on your own

In a state of true harmony, on the day that the sun shines from inside and love is abounding there is plenty of everything, life is satisfying and it is not because of how much money there is. If you desire something, and you feel truly deserving, you will find the way toward it without having a debt or settling for less. That is one of the laws of the universe. Trying to control or manipulate life through the means of money is a form of addiction.

Control your Spending

The day Janet came to see me she appeared to have it made: years into retirement, she had a few hundred thousand in various savings accounts, a house that was paid off, and financial freedom. However, what appeared to be built on solid ground in reality had a foundation made of sand, and possessed the ability to become quicksand if immediate financial remedies were not administered.

Janet lived a secret life as a closet shopaholic. Her late husband had kept her on a very short leash. She had no freedom to spend any money on herself while her husband was alive, and after he passed away, she became addicted to spending. It started out harmless enough with a few trips to the department stores, and then she upped the ante by watching the home shopping networks. Before she knew it, she was hooked. She spent hours by the TV, scouring for good deals and spending thousands of dollars a day on purchases she was not even opening when the items were delivered.

She often bought things she already owned from previous episodes. She became a collector, collecting the day’s latest sales. She wanted to stop, but she couldn’t. She was like a heroin addict who kept saying, “Just one more fix, one more. This is it, I promise.” This went on for years. Her daughters were even deceived by their mom’s habits. It wasn’t until Janet and I met that we began to look at the symptoms of her problems and how close she actually was to financial disaster. After “financial” therapy, Janet is back on track. We need to explore what money meant to her and develop new healthier behaviors. She has learned how to get her spending under control, give money to causes she cares deeply about, and still have financial freedom.

Put your spending under God’s control

Once you recognize that you are a steward of God’s resources, you often will begin to look at spending from the vantage point of whether He will be pleased with the purchase. Also, discover the factors that drive you to spend money. This could be anything from self-esteem to feeling like you just need a pick-me-up. When you go to shop, justify the reason why you are going, set a spending limit, and have a written list of what you need. This will help you avoid the many spending pitfalls.

A great way to control spending is to find a partner to hold you accountable for everything you spend for a specified period of time.

Ecclesiastes 4:9-10 “Two are better than one because they have a good return for their labor. For if either of them falls, the one will lift up his companion. But woe to the one who falls when there is not another to lift him up”

When accountability is in place, your partner is aware of your weak spots and you both can focus on ways to become more cautious with your spending habits. If looking keeps you tempted, don’t look. Window-shopping often leads to purchasing. One great way to maintain accountability is to develop a spending record.

Keep a list of spending and purchases and share these with your accountability partner. This list will include everyday items as well as monthly items. Review this at least twice a month with your partner. Pray for and encourage each other.

Financial Freedom Can Become Your Reality!

Wealth comes to those who spend carefully, use debt wisely, and develop a regular savings program. There are some common threads that run throughout many areas of one’s financial life. When I look at where the typical family in America is financially, I am saddened. I believe that if each family lived with these rules, the world would be a much better place:

1. Live below your means.
2. Allocate time, energy, and money efficiently to build wealth.
3. Turn to God in times of need.
4. Question needs versus wants.
5. Financial freedom is more important than high social status.

Are you working for your money or is your money working for you? Until you learn how to control spending, it doesn’t matter how much you make, it will be difficult to achieve true financial freedom!

 

What is the best way to start a budget?

The first thing that anyone who wants to make a budget must do is to compare their income versus their expenses. The good thing is that it is quite easy to do.To get started you can download this free Excel budgeting spreadsheet (or you can look through 10 other budgeting spreadsheets) which will help you calculate how much you spend each month and compare it to your current income.

It’s too bad most of us never learned this in school and had to figure it out on our own – so here is the lesson that we should have learned in 5th grade:

Expenses > Income = Bad | Expenses < Income = Good

And honestly, as simple as it sounds, that is the key to wealth. Anyone, and I mean anyone, who IS wealthy (I emphasize IS because I am not talking about people who appear to be wealthy, but who are actually in debt up to their eyeballs) spends LESS money than they earn. AKA – their expenses are less than their income.

The great news about this is that anyone can do this – no matter what their income level. If you can do it on a small income, then you can do it on a large income. If you can’t do it on a small income, then you won’t be able to do it on a large one either. Trust me!

If you don’t believe me, just ask all of the lottery winners who went bankrupt within years of winning millions of dollars.

Back to making our budget…

Regardless of how your expenses and income compare right now – get excited, because you can easily change it!! If it is bad you can make it so much better!! If it is good, you can still make it even better!! I will show you how later, but for now…

Let’s make a budget!

Did you calculate what your monthly expenses and income were? Were your expenses less than your income? If so, you are a rare breed who is in great shape, so just sit tight for a minute.

For everyone else, whose expenses exceeded your income – you are not alone. You actually have a lot of company. The problem is that it isn’t good company! Most of our debt-ridden society is in the same boat, but you are one of the bold ones who is jumping out of the debt boat!!

So, if your income is $1000 and your expenses are $1200, that means you spend an extra $200 each month that YOU DON’T HAVE!! What your job is now is to find out what you can get rid of or quit buying each month to save that $200. If you have no idea where to start you can check out these money saving tips or browse othermoney saving ideas.

I know, I know – this is the part that hurts. Just like pruning a bush – cutting back hurts, but ultimately you are going to yield so MUCH more fruit because of it!!

The goal here is to get your expenses and income to AT LEAST be equal. Once that is accomplished we can work on eliminating wasteful spending or cut other costs to bring the expenses below the income.

Now that you have calculated what your monthly income and expenses are we can start designing our budget. We will first discuss the less effective, but easier method for budgeting…

The world’s easiest budget

There are 2 simple rules to do a simple budget:

1. You can’t spend more than you earn – carrying a balance on a credit card is not allowed.
2. Money must go to the budget categories as soon you get paid.

The way it works:

Rather than having 10-20 different categories of items to be budgeted for you only focus on the 1-3 most important ones and let the rest of the chips fall where they will.

So, to do this you take your paycheck of say $1000 and right off the top you put the money to your main priorities. For many people this is tithing to their church, retirement savings, college savings for children, etc…

A sample of this would be:

$1000 (paycheck)

-$100 (tithe)

-$100 (retirement savings)

= $800 (for the rest of the bills and everything else)

It is absolutely critical that the money gets taken out FIRST for these few budgeted items. If not, I can almost guarantee that the full amount will not make it as intended.

I highly recommend making this process automatic by using direct deposit or some other form of automatic withdrawal. There is just something about human nature that has a hard time staying consistent with things like this.

Why do you think the U.S. government takes our taxes directly out of our paycheck, rather than coming to collect the full sum at the end of the year? It is the same principle – use it to your advantage.

Easy budget, but not very efficient

I think this budget is perfect for people who don’t want to budget. It is simple, doesn’t take up much time, and will help you reach some savings goals. That said, it is still inefficient and leaves the door wide open for inefficient and foolish spending.

I think it should be considered the “lazy man’s budget” – and you are not LAZY, you are willing to work to get your finances in order!! I know this because you are still reading. So, since you are NOT lazy and are hungry for more of a challenge, let’s look at how the pros budget.

The money saving budgeting method

Yes, this method takes a little bit more time and energy, but it also will provide you will long-term financial benefits if followed.To do this we are just going to expand on the lazy man’s budget mentioned above. Rather than having just 1-3 categories of items budgeted for, we are going to create as many as we need to put a limit on our spending in all areas.

You can use the mentioned budget spreadsheet as a guide for tracking your progress. Try to account for every possible expense that you could run into. You will never be able to budget for every possible scenario, but the goal is to minimize surprise expenses. Inevitably, there will still be surprises from time to time – so I suggest creating a category for these surprises (or you can just use your emergency fund).

How to stick with your budget

The almost sure-fire way to make a budget that fails is to NOT budget for any fun stuff. I wrote about how budgeting should be fun and it is a necessary ingredient for success. You need to budget for clothing, entertainment, going out to dinner, or whatever else it is you love to do! The key is to do it in moderation and to set limits and abide by them.

The amazing thing is that by budgeting for fun stuff, it actually liberates you to spend money on these items. When you have money budgeted each month to buy clothes, the money is now sitting there waiting to be used for that assigned purpose. Suddenly you can go clothes shopping without feeling guilty!!

This is how budgeting truly becomes fun. When you have money sitting in the bank waiting to be spent. Or, even better: if you start budgeting for vacation and after a little while you have hundreds of dollars begging to be spent on a vacation!! You go on your trip and come back home and don’t owe any money to a credit card company – now that is how a budget becomes fun and what helps you stick with it!!

I also suggest you check out the envelope budgeting method, or the method that I use to budget with ING.

Other budget options

There are many ways to make a budget work. The key is to finding a system that works for you and sticking with it. This article has gone over a basic method of budgeting, but if you need a little more hand-holding, and are willing to pay a little for it, I suggest YNAB budgeting software.

It is arguably the best budgeting software out there (Mvelopes is another great budgeting tool) and makes the whole budgeting process as simple as it can be. But be warned, it isn’t a magic tool that is going to eliminate all the work – it will just make it easier to manage the budgeting process.

As far as paying for budget software I think it depends on the user. It is not a necessity by any means, but investing a few bucks could save you some time and make the process a little easier. It just depends on personal preference really.

Either way, I suggest making sure that you are committed to this whole budgeting thing before buying the software  - no one likes to waste their money!  But if you do decide to go with it, make sure you try it out first with their 7-day free trial.

 

7 steps to put your stuff on eBay

As part of my de-cluttering process, I unload a lot of my stuff and random items by selling it on on Ebay. If you have never done it before, you will probably be surprised at how easy it is and how quick you can make a little money. Last time I de-cluttered, I made over $200 for only a few hours worth of time. This is a perfect follow-up to some major closet simplification. So, if you have a few hours of spare time, this may be a good way to make a few bucks.

1. Open an eBay account

This is a very quick and easy process. Click here to get started.

2. Buy a few items to get some positive feedback

(This step is optional, but it will probably help) -Small items are fine, anything you can find will work. The reason is that your credibility as an Ebay seller is primarily determined by your feedback score. By purchasing a few items and paying for them quickly, you will be able to get some positive feedback, thus giving you at least a little bit of credibility. Think about it, if you are buying an item wouldn’t you rather buy from a seller has feedback proving that he actually delivered his products rather than a seller who has never used eBay before?

3. Decide what to sell

I only sell name brand or easily defined unique items. When selling, you have to think like the seller and ask “how would I search for this item?” If the answer isn’t clear, it may not be a good item to sell. For example, I had a pair of fake leather pants (don’t ask) that weren’t a brand that anyone would care about, but I knew that people would be searching for leather pants, because it is such a unique item. Often times buyers will search for a brand name and a size, and this is why brand name items are good to sell.

Oh, and I also don’t sell items that aren’t in great condition – you can, but one person’s definition of “small hole in sleeve” can be completely different from another’s. I consider it to be dangerous territory, so proceed with caution.

Just FYI, about the fake leather pants, I had gotten them for about $3.00 on a clearance rack and ended up selling them for about $15.00. So, the $12.00 profit helps offset all the harassment I received for owning them in the first place.

4. Get Pictures of your items

Grab your point and shoot digital camera (if you are still taking Polaroid pictures, then see step #2 and make a digital camera one of your purchases) and start shooting. Use a well lit room, with the simplest, nicest looking background you can find; e.g. a hardwood floor or a plain wall. Take a few pictures of each item and get close ups if needed. Check out this article for more tips about Ebay pictures.

5. List your item

Now you are ready to list your items. I suggest doing all of your listings on the same day. This will enable you to do the shipping all on the same day, eliminating wasted trips to the Post Office.

Be as detailed as possible in the listing title. Include as many that apply to your item:

1. item names and similar names
2. Brand names
3. Model names or numbers
4. Sizes
5. Colors
6. Men’s, women’s, or kids
7. material
8. any other details that stand out about your item

At the time of this writing, if you search for “dress shirt” on eBay it will yield over 12,000 listings. However, if you search for “M banana republic dress shirt blue” we only get 5 results. As sellers, this is what we want – limited competition when people search for our item. If your listing title just said “dress shirt,” then your shirt would now be thrown in the world’s largest bargain bin with 12,000 other shirts for people to dig through. The more detail you put in the title, the easier it is for your buyers to find it.

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The first picture is free, but Ebay does charge to add additional pictures. I suggest adding at least one additional picture, unless you are convinced that the item doesn’t need it. Buyers like to see products from different angles and with detail.

Use the description field to fill in any and all detail that you couldn’t squeeze into the title section. The more detail the better. I learned the hard way when selling my wife’s clothes that a lot of the eBaying women like to know the measurements of each item before bidding on it.

A few more things to keep in mind:

• open a paypal account (free, simple, and will make it easier for buyers)
• Check for misspellings in your title (this could dramatically affect sales)
• International shipping can be expensive and time consuming, so you may want to limit your shipping area

6. Answer buyer’s questions

Buyers may email you with questions about the product, it is in your best interest to respond quickly to them. They are clearly interested in buying the product, otherwise they wouldn’t have spent the time emailing you about it. You can respond to their questions and see what each item is going for from your Ebayaccount.

7. Ship your eBay items

Try to get your items shipped ASAP to get positive feedback from your buyers. Look for old boxes (without writing on them) or for some items you can use brown paper bags to package it in.

I have had the best luck with the good ‘ol U.S. Postal Service. The standard shipping at that Post Office is almost always cheaper than UPS and FedEx. There are some occasions where this is not the case, but from my experience, the USPS is the best way to go.

As with anything, the more you do it, the faster you will get at it. And of course, some items will sell, and some won’t – I just give the unsold items to Goodwill. Good luck!!