Simple Sunday: Money

by Frank Martin

Simple Sunday is a weekly column here on the Mind that focuses on easy ways to simplify different areas of life.

Seems we all need money and few of us actually think we have enough of it. But do we? Here are five ways to simplify our relationship with money and end up with more of it at the end of the day.

1 Carry Cash: Seriously. Withdraw a reasonable amount from the bank, say $40-60, break it into an assortment of twenties, tens, fives, and ones, and, as much as possible, stick to spending that cash until it runs out. That simple act of handing over real cash to pay for something acts as a great trigger to make us really consider the purchases we make.

2 Clear out your wallet: Related to the above point. Take EVERYTHING out. Put back only what you need. For me thats some cash, debit card, library card, and transit card. Those point cards for every grocery store and shop under the sun? With few exceptions you can just give the store your phone number and they can look it up. Credit cards? For a country as in debt as we are, we should really stop spending money we don’t have. The idea here is not to punish yourself, but to make spending more difficult so impulse purchases become less likely.

3 Respect credit cards: Given what I’m saying in this post it may surprise people to know I have a credit card, and I use it. Credit really only gets us in trouble when we treat it like free money. As a young adult with a credit score hobbled by student debt, a credit card can be a great way to build a good credit history, as long as I’m careful. Here’s my solution: I have a single, bank issued credit card with a low limit ($200), and I have a personal spending limit I’ve set for myself thats well below that (in this case $50). This ensures that I don’t get myself in trouble, because I don’t spend more than I make in a month, and I pay off the entire balance EVERY MONTH. That last bit is key. Lenders may LOVE it if you carry a balance month to month, but we’re not doing ourselves any favors taking our sweet time to pay credit card bills.

4 Save before you spend: Open a savings account if you don’t already have one, and set up automatic deposits at the beginning of each month. $25 or $50 is about right. Most of us fail at saving because we try to save whatever is left at the end of the month, and if you’re anything like me, that isn’t always that much. Building up some savings means we can stop living paycheck to paycheck, and stop relying on credit cards if the proverbial cow feces hits the fan. It also creates the possibility of getting out of debt and staying out.

5 Start a 30-day list: Find a non-essential that you want? Put it on a list. Wait thirty days and then buy it, unless you don’t want it anymore. Once again, like sticking to cash, the idea here is not to punish ourselves, but to limit impulse spending.

Do you have any tips or tricks you’ve found useful in simplifying your relationship with money?