“Some people do need the security of having money stashed away and others are relatively comfortable living on the financial edge,” says Dena Wise, Ph.D, who is a professor and consumer economics specialist with UT Extension. She says a big factor in whether you spend or save is simply habit. We all fall into spending habits just as we fall into eating habits. It can just as difficult to change spending habits as it can be to change our diet.
In order to decide if you need to change your spending habits, Wise recommends that you ask yourself five simple questions:
1. Sometimes, so I buy things without knowing for sure that I can afford them?
2. Do I make spending decisions without really having a plan?
3. Do I often have less than $1,000 in my checking account?
4. Do I carry a balance on my credit cards from month to month?
5. Did I sometimes not have enough money to pay bills when they are due?
If you answer yes to any of these questions, then you need to focus on change.
Wise says there is also a methodical approach to changing your spending habits, and it is similar to the approach you might use to change your diet. She says the first step toward reining in your spending is to simply track what you spend for a few weeks. Keeping track of what you eat — recording expenditures in a journal or electronic device — can help you understand not only how much you spend and what for what, but also why you spend.
It is a good idea, especially the first week or so, to make notes on each spending or saving decision. The feeling you have before and afterwards can provide clues to understanding why and under what circumstances you spend or save.
A goal is to create or maintain an emergency fund. University of Tennessee Extension educators are encouraging state families to focus on saving during Tennessee Saves Week, Feb. 25 through March 1.
Wise says, “In today’s economy, it is harder than ever to get ahead financially, but we are seeing a new determination on the part of consumers to find ways to stash away a little cash.”
Join Tennessee Saves today at tennesseesaves.org or call the UT Extension office in Bradley County at 728-7001 for more information.