Wherever I travel for work people these days, I’m hearing two common themes from people. One, they want guidance on how to shift their money behavior to match the current reality. Two, they are sharing that it’s much more difficult to change their money habits than they thought.
While it can be challenging to get your expenses in line with the current financial reality, it’s a whole lot easier when you have a good sense for the difference between a need and a want The people I meet who have mastered the art of living within their means have a deep understanding of the difference between a need and a want.
Here are some ideas to help you develop and maintain healthy money habits:
- Write down your definition for a need and a want
- Track all your expenses for 30 days so you can get a clear picture of where you stand
- At the end of 30 days, mark each spending decision as either a need or a want
- Prioritize all the wants categories (from most important to least important)
- Decide which items on the wants list will be modified, deferred or dropped based on your current cash flow