The art of perfecting one’s budget is a process in trial and error. In fact, the perfect budget is probably the product of a few dozen to a few hundred mistakes along the way. The key is to be willing to learn from one’s mistakes and then to move forward, applying what you have learned and eliminating or breaking your bad habits.
One good way to make the most out of the trial-and-error process is to make an effort to be more aware of the patterns in your personal finance habits. This means you should be more vigilant in taking note of where your money goes, especially where your money gets spent most uselessly.
Among the ways that money gets wasted would be in the area of our personal habits: our hobbies and, for those who have it, vices, which can easily become a money pit, if not well addressed.
Yes, it’s your hard-earned money. Yes, you are entitled to enjoy it. However, between wanting to maximize your money and being able to accumulate wealth, versus indulging your desires, which one is a bigger priority for you?
If you prefer to live in the moment and enjoy life, hobbies, habits, vices and all, then stop reading now. But if you would rather do an attitude check and a habit overhaul, then give things a pause. A little thought may well enable you to give your retirement fund and other investments a much-needed boost.
Avoid Overspending On Things You Enjoy
Remember that any pursuit of pleasure has diminishing returns. Because pleasure operates on the body releasing dopamine and other happy chemicals every time you are exposed to that which provides you with pleasure, you typically begin to crave for a stronger and stronger fix. Over time, the amount that used to satisfy you is no longer enough, so you would want to get more and more of it. Thus, before any hobbies cross the line into “vice” territory, or before certain obsessions begin to rule you, think about maintaining a decent balance between how much you’re spending and how much you’re enjoying something.
While hobbies are wonderful activities to take up for the purpose of keeping us happy, relaxed, fulfilled and even-keeled, we need to be a little bit more careful about the more harmful activities that claim a piece of our budget.
Here are our tips on how to minimize or cut spending on bad habits and vices:
1. Think about the benefits you are missing out on whenever you spend a dollar on your unproductive habits. What money you could have put into your retirement fund, a good online stock broker account or top online savings account now goes into something ephemeral. Think about the costs versus its benefits. Is your happy fix really worth what you pay for?
2. Think about the health benefits of kicking a bad habit or a vice. Whether it’s too much food, smoking, or alcohol, cutting back or going cold turkey will bring back the health you lost to the overindulgence or abuse you’ve wreaked on your body. In the long run, kicking a health-killer will buy you more time to spend with your loved ones.
3. Think about the impact a lifestyle change would have on your life and on your loved ones. The first one to feel the difference of a lifestyle change would be you, and the next ones would be the people who love you. So do it for you and for the ones who care about you.
As you prune away vices and habits that either hurt your budget or hurt both your health and budget, you may find that you can actually live without them, after all. Plus, isn’t it liberating to actually use your hard-earned money on something more worthwhile? Yes, enjoy life, shop, travel, indulge, even have hobbies, but make sure that any activity doesn’t become an all-consuming or senseless passion.
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