Written by contributing blogger, Tammy Valentine.

Growing up, I learned money is like an admission ticket. If I wanted something bigger, greater, or better, I had to have money. As a farmer’s daughter, money was often the curse of all troubles and our need ratio compared to earning ratio never seemed to align. It’s through these experiences, I’ve learned a few rules that have truly helped with a fresh perspective on money management.

Focus on the Forest, Not just the Trees

According to Fortune.com, the average American debt to income ratio is 370% with the average U.S. household owing $204,992 in mortgages, credit cards, and student loans on a median household income of $55,192. (Sentier Research, 2015).

Some argue most Americans are worse-off than the Greeks because of these statistics. Why? I believe it’s accessibility. It’s easy. I’m a marketer. We feed off consumer emotions and how our message influences buying behavior. It’s no secret purchasing decisions are made from buying personas and how much, “easier, better, happier” we’ll be if we have ____________ blank product/service.

Another factor that drives purchasing behavior is lenders. They’re fantastic sales and marketing professionals because they flood your noisy world with messaging around low interest rates, cash-back incentives, instant approval, consolidating debt with balance transfers, etc. I mean — why not open a new credit card, refinance your house or take out a student-loan with all these perks?

The problem with this is we, as consumers, are too focused on the here and now; the trees, that we can’t see the forest or how long it will take us to get out of it to enjoy the view.

Now, I am not a money magician or a complete tight ass — to be frank, I sit somewhere in the middle with several goals and aspirations to continue to sharpen the saw. However, I’ve learned a few tricks that have helped me button up impulsive-buying habits and get much better at money management.

Four Ways to Button Up Your Spending Habits

1. The first is budget. I know what you’re thinking… “Well, duh, who doesn’t budget?” That’s not what I mean. I mean specifically mapping out with a Excel spreadsheet your income and expenditures by month and by year. com has a fantastic budget spreadsheet and various other tools to monitor spending month-by-month. Here is a free template. You really need to track everything and understand exactly where your money is going. For several years, I was paying stupid amounts of money for a life insurance policy, a retail membership and credit card APR fees out the wazoo, that I didn’t realize it was sucking the life out of my bank accounts. I didn’t know this because I didn’t track where my money was going. Once I began tracking all expenditures, I cancelled, consolidated and saved a ton of cash with that small exercise.
2. The second is goal-setting. You have to set goals for six months, a year, five years and 10 years to really understand how much your finances and management will play out over time. I became fed up with credit card and student loan debt so I made the conscious effort to double my payments each month for two years. I paid off all credit card and student loan debt and got married all within the same month. Holla! This was such a freeing experience that now I am somewhat addicted and more motivated to the cause.
3. The third is make saving and investing a habit. It is never too early to begin either. There are several experts in the field that can help with this. These two concepts truly are an art in the implementation part of the money management process. Sure, it’s easy to talk about it, but actually executing can be much more difficult for those used to spending or purchasing something whenever they want it. It takes real discipline to put away money each month, instead of spend it. Take my advice, save it. You will live much more stress-free knowing if something happens there is a reserve of money set-aside for emergencies.
   
   Anecdote: My grandparents owned a construction company. They did not have a ton of money and they had six kids to support. (Keep in mind, this is one generation removed from The Great Depression. Money was tight.). They provided for all the kids (and several grandkids) and were able to save more than a million dollars based on this basic principle of saving and investing as a habit. It’s because of them and their love for their family that I’ve made this a priority.
   
   One last thing to note in regards to saving and investing, you never know when you or your spouse will lose a job. I am a proponent of the Dave Ramsey program and believe at the very least, you should have enough reserves to survive and pay your bills for at least 6-12 months without a job. I say this because it happened to me and I am so grateful I had enough money put away to continue to make my payments while looking for work.

4. The last point I’d like to make is with technology, apps, advisors and financial resources at our fingertips there really shouldn’t be an excuse behind swimming in consumer debt. Make money management a priority for the sake of your family, your livelihood and your future.

Money is a necessary evil we’re faced to deal with as consumers. The first step begins with you taking control of your finances and not letting debt get the best of you. Like most things in life, it’s relative and can create hardships, stress, and turmoil if not handled properly. Choose financial freedom and make money management a priority.

#radiatedaily

image source: Public Domain | Pixabay