| How to Save Your Money, Part 3 |
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Be honest with yourself about what you really need. After you've paid for food, shelter, clothing, health care, and what's needed to keep your job or other income (work clothes, for example), almost every other purchase is negotiable. You may want to buy a lot of things, but remind yourself that your real needs are usually limited. When you take a second look at what you need versus what you want, you may happily decide against spending for certain extras. Watch out for the phrase "it's only..." Thinking "it's only a few bucks" can be a sign that you're trying to justify a purchase as being small and insignificant. But everything matters. It's often not the big purchases that get in the way of your ability to save, but the small habits that interfere with saving a little bit at a time, day by day. Make a commitment to spend very consciously. Get into the habit of being very suspicious of impulse purchases. Avoid sudden, knee-jerk spending. Take a moment to ask yourself if you really need, or even want, what you're about to buy. Save your raises, bonuses, tax refunds, and other extra income. Whenever you get a windfallthat is, when you receive more money than you usually take in during the pay periodput it into your savings account. If you already know how to live on your current income, you don't need that unexpected income to maintain your lifestyle. Figure out how much working time it takes to purchase those "extras." You may think that new computer will cost you $1,000. But if your take-home pay is $20 an hour, many financial advisors point out that this $1,000 actually costs you 50 hours of working time. Adopting this point of view may help you decide whether or not to make a discretionary purchase. |
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