Noreen is the lead of Rava's Editorial Team and has been associated with the world of journalism since 2012. She is quirky with an awkward sense of humour and an advocate for common sense. Her skill is to use sarcasm to survive on daily basis.
Our money flies. Many of us are those who at some time have believed that the bills have a life of their own and escape from our portfolio . Although we are not aware we are spending continuously and often we do it without any need.
The line that separates red numbers from economic slack is very narrow and being on one side or the other depends on those little habits that we are not aware of. An article by Learnvest points out the mistakes that we usually make and how we can solve them so that our economy can breathe easier.
1. You’ve found a bargain
How usual it is to meet those cowboys so low that you do not need anything. Or those discount coupons that work from fifty euros of purchase and expire in two weeks. This savings will only be such when you buy something that is really necessary . If not, it will be a lesser expense than usual but, after all, an expense.
The doctor of psychiatry at the University of California Reef Karim says that falling into this ‘trap’ can lead to a dynamic of addictive euphoria. We must recognize that taking advantage when a product is downgraded is positive , but to avoid falling into temptation we must have several concepts in mind.
The first one is to see how it affects our economy. If we have to pull a credit card, it is very likely that it is not a good idea. It is also desirable to maintain special caution when visiting discount pages that encourage consumption. Finally, the most important step is to take stock of whether the expense we are going to make is really necessary or we are just throwing money away.
2. You need your house to be beautiful
To the prohibitive price of the houses it is necessary to add the high expenses to furnish it . It is very common that when entering a new house, the desire to acquire products that give a personal touch increase considerably. In many occasions you end up wasting money on furniture or accessories that we do not need.
A good method to avoid this impulse is to write down everything we consider essential and create a realistic spending plan for it. So we will not fall into the temptation to buy compulsively and those little whims will be added gradually so as not to damage our economy.
3. Beware of extraordinary income
When we receive more money than usual, expected or unexpectedly (we get a small prize from the lottery, we get an extra pay, we receive an inheritance …), we tend to increase our spending engines.
The reason is that it is this money that has just arrived in our life, in many occasions we have obtained it without our effort and we feel less attached to it . A good plan is to save until you have a minimum mattress of six months. When this happens, we can spend the money on fun things, but always with a head. An activity that can help us improve our economy is to invest 10% of that money in funds that can give us profitability.
4. Compare with the environment
We all have acquaintances, friends, neighbors or relatives with a high life train, and when we are with them we are afraid to look stingy or miserly. Sometimes we fall into the error of believing that to fit into an environment we need to behave in the same way , even if it has a negative impact on our economy.
That someone lives a life full of luxuries does not have to mean that they are managing their money well. Each person has a different economic reality and we should never compare ourselves with the environment or imitate their customs. To avoid these excessive expenses one idea is to operate at two speeds. With the people who share our spending levels we can make the usual plans like going to dinner. Meanwhile, with the most spendthrifts we will propose you to take a cane, a coffee or to make a trip to the countryside, much more affordable activities.
5. Vacation expenses
On vacations we spend more, nothing happens, it’s normal. In these days of rest it is usual to leave aside the worries of our routine , and in economic matters it also happens to us.
Leaving these worries for a few days is good, but we usually make the mistake of budgeting only the hotel or apartment and transportation . The rest of expenses in the vacations, that are very numerous, we forget them and this causes that we lose control of our money and remarkably increase the price of those days.
To avoid this, we can make a sketch of the expenses before starting our days off. In it should appear the expense in accommodation, transportation, meals, purchases … We do not have to follow it to the letter, but it will help us to have more controlled our finances and be aware of what we can squander and what not.
6. Special occasions
Birthdays, anniversaries, promotions, Christmas parties … If we stopped to think for a moment about all the parties and dates we could spend money on, we would get a nervous breakdown.
Normally this type of celebrations do not take them into account in our regular accounting , they are characterized by being impulsive and we believe that spending a lot of money is necessary to demonstrate appreciation towards a person.
Many of these events are known in advance, so we can dedicate a dedicated fund to it and thus have it much more planned. On the other hand, the ‘hypercapitalist’ mentality of having to spend a lot on someone important is ridiculous. A personal gift does not have to be expensive and will do the same or more than another with an exorbitant price.