If you want to build a nest egg, there's no better time than the present. First, you must realize your weaknesses in order to stop frivolous spending-and truly begin saving money. Get started with these simple budget boosters from Skinnygirl Solutions by Bethenny Frankel.
Once you've got a handle on saving money, let's talk about the part you probably already know a lot about: spending money. It's addictive, it's fun, and it can suck you dry, but I'm not going to tell you to quit shopping. Instead, let's talk about how to spend smarter:
1. Spend like you eat. I believe that your diet should be like your bank account, but I've also realized that your bank account should be like your diet. If you splurge, then you need to pull back. If you've been saving, you can afford a few extra luxuries. Spending is a balance, even if you never "count your calories," or keep a budget. You have to at least keep an idea in your head of where you are and what you can and can't do.
2. Stop binge-spending. Excessive spending, whether insane shopping sprees or bouts of Internet shopping where you can't stop ordering things, is actually very similar to a food binge. You spend like crazy and you feel high. You think you have to have these things you never even knew existed hours before, like they're the last things you're ever going to be able to buy. It's like an alcoholic going into a bar. Then you come down and you feel guilty. You've got major buyer's remorse, which is like a binge-spending hangover. Now you're broker than ever, or you've maxed out your credit card. I guarantee that the new pair of shoes or dress or necklace or overpriced designer handbag won't look so great tomorrow once the rush of acquiring it is over and the remorse kicks in. Now you're wondering if you even like the stuff that much, and you've overdrawn your bank account.
The truth is that almost everything you think you want right now will still be there tomorrow and will go on sale eventually. You can wait. Not binge-spending is just as important as not binge-eating. It's time to tell yourself you are through with that. And if you do find yourself gravitating toward the mall or the strip or the Internet with your credit card at the ready, at least limit yourself to stores with simple, free returns so you can get the money credited back to your card when you realize you didn't want to buy that thing after all.
When the urge to spend hits, I have a better idea than shopping: reorganize your closet. If you've already done that, then go put new outfits together. Put a pair of shoes you've had for years with an interesting bag you never use and a pair of earrings you forgot you had. Make a list of the new outfit ideas you get. This can get the urge for something new out of your system without costing a dime.
3. Buy with intention. Before you ever pull out that credit card, decide what you want, make sure you don't already have it (you'll know because you're organized now), and then shop around. Never buy the first thing you see. An enforced waiting period will help you head off a spending binge.
4. Pay in cash. If you pay in cash, you know exactly what you are spending and it will feel more like what it really is: you trading your hard-earned money for something you supposedly want. I know this isn't always possible for people who need to track their spending on a credit card, but I know that I would never have allowed myself to buy even half the stuff in cash that I've put on a credit card.
5. Never pay retail. If you've decided you really need something, comparison-shop in stores and on the Internet. I've found deeply discounted designer items I really liked on eBay, at flash-sale sites, and at sample sales, and I've found things I liked just as much at discount stores for a fraction of the price. Almost nothing is actually worth the retail price, so why overpay? Even if you really want the genuine article, it's going to go on sale eventually. Sign up as a member on your favorite shopping sites so you get an alert for twenty-four-hour 80 percent off sales and similar promotions. If that thing you think you need never does go on sale, then maybe you weren't meant to have it. If you make it a rule that you can't have it at full price, then you'll save tons of money.
6. Assess the differential. This is another concept I use with food that also applies to money. If you really care about something, like high-quality shoes or organic, shade-grown, free-trade, locally roasted coffee beans, spend money on those things. However, don't waste money where it doesn't matter. Do you really care if your sheets or toilet paper or nail polish remover came from a discount store? When the difference between an expensive item and an inexpensive version of essentially the same thing doesn't matter very much to you, go for the inexpensive. You will save a lot of money this way, if you're used to just picking up the first thing you see without looking at the price or thinking you have to have the "best" of every single thing you ever buy.
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