5 simple financial restraints to change your spending habits

What the heck is a financial restraint? Well it maybe a term I just coined. When googled there's not a lot that comes up! So, my thoughts on what financial restraints are this; it's anything that keeps you disciplined in your spending. Basically, it's your sheer determination or habits that prevent you from spending money.

1.The 24 hour rule – One easy way to practice financial restraint is to impose a 24 hour rule. Basically, if you're buying anything that wasn't a budgeted purchase needs to be put on hold for 24 hours. This limits any impulse shopping and gives you time to think whether you really need or want it. It also would give you time to spend on financial restraint #2

2. Shop around for multiple prices – You should ALWAYS shop around for better pricing. If you're planning on purchasing something and know you can wait. Call around to get different quotes. Go to different stores or better yet check it out online. Amazon is always a good source to give you multiple price points. There's also lots of comparison sites for big purchases like insurance, mortgages or cars.

3. Spending limits – If you're budgeting you're probably going to break that budget every period if you don't put in some room for miscellaneous spending. Whether it's $5/week or $100, you need to define your miscellaneous budget. This can be for anything that you're not budgeting for, maybe a video game or snacks. Basically it's for those impulse buys or when you want to... treat yo self!

4. Hourly worth – If you're employed you're paid a set rate per hour. Salary people can just divide their yearly total by 2080 which is 52 weeks at 40 hours per week to get their hourly rate. Now take away your marginal tax rate off of that hourly rate. This is your NET pay per hour. Every time you think about buying something, think about how many hours it would take to pay it off. Is it worth it now? Do you want to spend all that extra time at work just to pay for that item?

5. The cash/envelope rule – I've never done this financial restraint myself. It's one I hear/read a lot about other people doing it. Some people like to put a certain amount of money in their wallet each pay period or in an envelope. That's their spending money for that period. Any purchase that doesn't fit in that budget doesn't get bought.

Hopefully at least one of these financial restraints will stick with you and help curb your spending so you can achieve your goals. What are some of your favorite financial restraints that I may have missed? Do you currently implement any of these in your day to day lives?

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Making your budget work for your lifestyle

"Are you on a laptop all day? Would keeping an excel file or Google doc file help you track your expenses easier? Would it be more convenient to keep an old fashioned pen and paper type of budget? How about keeping a running tab on the fridge so that you are tracking all expenses?

The bottom line is do whatever works for you! Make it as easy as possible for you to stick to your budget by fitting your budget-keeping into your lifestyle." -Everything Finance

Revisiting your goals

"For the few that actually look at their goals again, it’s common to revisit them only at the end of the year. This is a crucial error.  As our circumstances may change day to day and month to month, so will our goals. A lot can change in twelve months, which is why I propose reviewing once a month, or at the very least every three months.

Revisiting also keeps our desires relevant.  It’s helps us remember that we even have them.  Ideas aren’t enough, we must execute.

As the great Thomas Edison said, 'Vision without execution is hallucination.' " -Jiu-Jitsu Finance

Increasing your income

"After you have lowered your expenses, it is time to bring in more income. There are many ways to bring in more income especially during the holiday season. Maybe your full-time gig will let you work extra hours for overtime. In addition, retail stores typically hire for the holiday season. That part time holiday gig could turn into a longer gig...

Retail jobs aren't the only part-time jobs available. There are plenty of other side hustles you can pick up right at home to make extra money like: Freelance Writing, Virtual Assistant, Social Media Management." -Financially Fit & Fab

Turn on your automatic savings

"Another no-hassle way to save is by setting up an automatic transfer to your savings account. By automating your transfer, you're making sure that you don't forget or pay your savings last–and as a bonus–automating your savings means you never "see" that money and subsequently makes it sting a little less.

Two new apps that I am loving lately are Digit (which has a cult following). It automatically transfers money from your checking account you won't miss. I also love Qapital, which has rules you can set to "save the change" from your purchases. I saved over $75 my first month of Qapital, which was really astonishing to me. Click here to give it a try." -Financial Best Life

Develop the habit to spend with cash than card

"To spend with cash is also an actionable way to get out of debt. According to the research on peoples spending with credit cards; it was revealed that those who shop with credit card are impelled to spend more on luxury items because they feel they are paying with “play or fun money”. In other words, people who shop with credit card spends more than required.

Evidently, finance advisors hold a strong stand on this. They strongly advise that people who are working on eliminating their debt should cultivate the habit of spending cash, to avoid being tempted to spend on irrelevant items." -MoneyMiniBlog

Leave your wallet in the car when shopping
"This trick is simple but impactful. When doing any kind of shopping, use cash, and only take the amount of money you want to spend in the store with you. Leave all other cash, credit cards, and debit cards in the car.

This is very powerful, especially when grocery shopping. In addition to the amount you plan to spend, you can consider bringing in a small cushion of a few dollars (in case there are hiccups at the register). You will shop (and spend) completely differently when you only have a hundred dollar bill with you versus a hundred dollar bill and your debit and credit cards.

Don’t give yourself a way to spend more money than you want to — and you won’t." -Hope + Cents

Start and maintain an emergency fund

"There is no fixed formula for how much you should have in an emergency fund. Some school of thoughts say 6 months’ worth is sufficient, some say a year’s worth. Everyone’s situation is different and as such, each strategy should differ. To start however, I would suggest understanding your spending habits, and then implementing a 3-6-9 guideline.

3 Months: If you are single without kids, renting, no car, partially dependent on parents for income or any combination of these factors, start off with a target of 3 months’ worth of expenses for a rainy-day fund.

6 Months: Married, kids under 18, own a house or condo, own at least one car, or any of these combined, the base target should be 6 months’ worth of expenses (if married, base it off the income of the highest earner).

9 months: Self-employed, freelancers, anyone with a volatile job or unpredictable paycheck, 9 months’ worth should be the benchmark." -Investment Conversations

How students should avoid the debt trap
"The easiest way to prevent yourself from falling into the debt-trap is by living within or below your means (that is, not overspending). In addition, it is necessary to do research before getting credit cards (or signing any contract to take on loan/ debt) so that you really understand how it works. As a student, you must learn to treat your credit card with respect.-Investment Conversations
Build a budget and stick to it
"There are many free apps available to help you track expenses, but I always prefer using my own spreadsheets. That enables me to have the most control over what I’m doing. I understand that being able to access your spreadsheet on your phone makes tracking significantly easier, which is why I prefer Google Sheets over Excel. You can download the Google Sheets app and pull up your expense tracker wherever you are to input a transaction or monitor your spending. By combining the expense tracker as separate tabs within the same spreadsheet as the bill tracker, you can have all your finances in one easy-to-access location." -The Budget Boy
Create an automatic savings account for travel.
"Here's how this automated system specifically works for you and your travel fund. Once it's set up, it goes like this:

-Your checking account receives income.

-The next day, your checking account automatically transfers money to a separate (different bank) savings account—aka your travel fund.

-Transfers repeat every month.

-You end up with a big, fat travel fund to see the world." -Take Your Success

Know your interest rates and then lower them
Know Your Interest Rates
If you have anything that you are making payments on every month, you need to know how much interest you're paying. Make sure you know these numbers, too. Ideally, you'll want to pay debts down that have a higher interest rate first. However, there is another school of thought out there that suggests paying the bill with the lowest balance first. I'd say either way is fine as long as you're making progress and as long as the higher interest rate stuff isn't astronomical.

Action: Look at your statements or call the companies to get your current interest rates on all monthly obligations.

Negotiate Lower Interest Rates
If, by chance, you ARE paying astronomical interest rates on any of your liabilities, call and try to negotiate a lower rate. Oftentimes, if you've demonstrated a history of paying on time, the company will work with you to reduce your rate. The only trick is, you have to ask.

Action: Know your numbers and call the companies to negotiate if you're paying high interest rates.
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