PERCEPTION: THE KEY TO SAVING MONEY

time vs money


Everyone knows what they’re supposed to do to be more financially stable, but while knowledge is power, putting that knowledge into action is where the real trouble is. It’s the same thing with eating well and exercising. We know what we’re supposed to do, but we don’t always do it.

That’s partially because these things take willpower and science has proven that willpower is finite, much like the gas in your gas tank. When you wake up in the morning, your willpower tank is full. But as you go through the day exercising willpower when you decide to go to work instead of stay in bed, hop on the bus instead of hailing a cab, order a salad over fries, etc., your tank becomes depleted. This is why you often indulge in a bowl of popcorn in front of the TV at night while you have no problem choosing a healthy breakfast every morning. Your willpower is gone by the time you sit at home to watch TV.

You can overcome a lack of willpower by addressing your mindset around the financial behaviors that are in the way of your stated goals. Here are a few tricks to use to keep in line when tempted to raid your emergency savings:

1.) Measure the purchase against the number of hours you have to work to pay for it.

Add up all the time you spend on work, including dressing, commuting, answering emails before bed, and even vacating work. Then divide those hours into your salary. That’s your true hourly wage. Next time you’re thinking of bailing on your budget, calculate how many hours you’ll have to work to pay for the splurge. Suddenly, even just that extra venti coffee equals an extra hour of sitting at your desk (This tip is courtesy of "Your Money Or Your Life").

2.) Calculate the number of days it will take to reach your goal.

A USC study found that when people think of the number of days it will take to reach a goal versus the number of years, they were much more likely to start saving when they knew the number of days. For example, your newborn has 6,570 days until college. If you’re 30 years out from retirement, that’s only 10,950 days. Even 20-somethings only have about 14,600 days to work.

3.) Think of your “Walking Away Fund.”

At the end of the day, financial wellness is truly about having choices. Years ago, a famous radio personality shared a story. He said:

“A couple weeks ago I was visiting the maternity wing at the hospital and someone passed me my newborn baby granddaughter. For just a second I had a flashback to what seemed like just 6 weeks ago, when someone was passing me a joint at Woodstock. Time flies, man. Life is too short to stay in a job you hate, a marriage you hate or anything you hate.”

If there is anything you hate about your life, your “Walking Away” fund can be your ticket out. Think of that when you’re tempted to blow it.

What about you, what are the tricks you use to stick to your budget?

Inspired by Kelly Long’s, 3 Clever Ways to Trick Yourself Into Saving Money