I was talking to some people about the notion of needing a budget in order to keep your finances in good health. Basically, each month you should be writing down how much you have and how much you can allocate to certain things such as entertainment or essentials. The funny thing for myself is I personally don’t use a budget in that sense. Instead, I keep myself constantly in tune with how much I have and how much I am spending. With that it becomes like a challenge of sort where if I am going to take money out of an account then I always ask myself how fast can I replenish it without it harming the ability for the funds to grow. It really makes me think of my purchases and the future.
For example, I know a lot of people would think having zero dollars and no debt is the safe zone. However, to me for example $10,000 would be like a safe zone and it makes me want to at least maintain that number and make it go up. I guess another way to think about it is it’s kind of like food and your health. Some people would say you have to follow a strict diet plan if you want to keep the pounds under control and others would say you just need to be constantly knowledgeable and aware of what you are putting in your body. For me, being aware is more of my preference personally as with that it’s a lifestyle habit and not say a one time thing.
I have often heard the argument that going with being more aware route must be stressing as each day you are worrying about what to buy. It’s really not the case, for me anyways. It’s almost like my mind is accustomed to quickly going through an algorithm where I look at the product, the price, I start thinking about value such as if the item has ever gone cheaper, think about any goals I have in the future and whether or not this item will help me, etc. If it passes all these quick flash tests then I can start seriously thinking if I should spend the money.
To me it is no real difference than say people who wouldn’t eat a piece of fruit because it smells bad or has bruises all over. Basically, it’s not like you stand there for hours debating if you think it will be good for you or not. Instead, you have naturally learned that those are potential signs that the product isn’t that good and that putting it in your body can mean bad things later. In my opinion, having this same approach with money is the way to go in my view.