Posted by Allison on 5 April 2009, 10:45
If you feel as though your money disappears on you every month, you are not alone. Lots of people in many different countries around the world struggle to keep their money where it will do them the most good – and that's in their bank and savings accounts. It seems that it doesn't matter what currency your country uses, those coins and banknotes keep slipping through your fingers every day.
If you tend to pay for things using a credit or debit card, it's easy to lose track of the value of your own particular currency. It's easy to go shopping, put things in your basket and simply hand over a card in payment rather than see the actual amount of money it is costing you.
And maybe that is where we are going wrong. If you want to save money every time you go out, you should go back to the idea of using money – actual banknotes and coins – to make your purchases, instead of relying on the plastic.
The great thing about this strategy is that it works just as well on holiday as it does in your own country. In fact, if you are holidaying in a foreign country it can actually be something of a learning experience since you are becoming more familiar with a different currency and learning how much things cost in relation to your own currency.
If you have set a budget to follow – and you should do if you are aiming to save money – then you should have set a budget for your weekly food shopping as well. We'll use this as an example since it is something that everyone needs to buy rather than something only a handful of people can identify with. Incidentally if you are the type of person who doesn't do weekly food shopping and simply goes out whenever you need something then you will certainly be going over your budget. Every time we need to buy something we tend to pick up a few more things we didn't really need as well, so it stands to reason that the more trips you make to the shops or the supermarket the more money you will end up spending as a result.
Here's what you need to try the next time you do your weekly shop. Take the exact amount of money you have allocated for shopping out of your bank account, tuck the notes into your pocket and use these to pay for your bill. The real test is in leaving your credit cards at home! If you only have the maximum amount of cash you can spend in your pocket and nothing else to fall back on, you will start noticing how much everything costs and trying to keep an eye on how much you are spending.
If you go armed with a shopping list your job will be made even easier. Stick to what is on that list and don't get anything else at all. You can save even more money by going later in the day when fresh produce tends to be marked down in price. It's a simple truth that paying in cash makes you look at the price and see what you are paying for something, whereas paying by card takes away that necessity since you know you will be able to stick virtually any amount of money on it without worrying.
Of course the whole idea of paying for something with cash goes back to the days when plastic didn't exist. Our ancestors would have frowned at the idea of using anything other than coins and later on, notes, to pay for what they wanted.
That is why lots of people in our modern society find it difficult to manage their money, whatever currency they might be using. They find it tricky to work out how far their holiday currency will go when they visit another country, and they find it difficult at home as well. So long as there is enough of a credit limit on a particular credit card for the weekly shopping to be paid for, that's all that matters.
But of course that's not true, which is why re-learning good budgeting skills and looking at ways to save money each and every day will result in a better understanding of money as a whole. Once you start going shopping with cash in your pocket instead of cards, you will notice that you come in under your budget every single time. This is purely because you won't want the embarrassment of not having enough money when you reach the checkout!
Over time this method of saving money will give you the feeling of control that you need to have over your finances. If you currently have debts then your money saving habits will start to extend to getting rid of some of these, as the money you save can be put towards increasing your monthly payments.
Everyone likes a bargain but some people take this to the extent that they end up not saving any money at all. Before you put any kind of bargain item into your basket, ask yourself if you really need it. The question is whether you would have bought it anyway, regardless of whether it was on offer or not. If the answer is no then it should go back on the shelf.
It's a sad fact that people in the majority of countries around the world are not taught anything about their currency or how to use it to make their lives better. They are not taught how to effectively manage money – instead they have to learn it from the people around them, and when everyone is so eager to 'pay for it later' how can we expect this pattern to change?
The secret is to be pro-active and make changes yourself instead of following what other people are doing. If you do that you can expect to have a lot more money left at the end of the month – and a lot less debt too.