MICHELLE SMALENBERGER, CFP ®
Do you ever catch yourself thinking about expenses in a sense that, “I’m spending so much”. Or, “This is going to cost me a lot, I’m not keeping much”.
If so, you might categorize your expenses in your mind “Big Versus Little”. I often think with these big decisions we’re really thinking, “How much do I keep?” or “How much do I spend?”
Think about the difference in that perspective. It is savings versus spending. I’m going to list a couple of different types of expenses. And hopefully you’ll start to see that the way we view them, makes a really big difference on how we feel about spending that money.
“How much do I keep?”
Let’s think about your taxes. When you’re doing your tax return every year, you probably have questions like, “Is there more that I can save? Are there more deductions that I can take? More things I can itemize so that I can pay less or I can keep more?”
This is a big expense and that’s where this falls into a category of, “How much do I keep or can I keep?”
“How much do I spend?”
Something like groceries for example. So probably, very often, when you go to the grocery store you think, “How much am I spending on this item, versus if I get this item because I save a dollar or more?” Something like that. Another example could be clothing. Often these are smaller items.
Often times you are thinking, “How much do I spend? How much money is going out?”Another area is like how much of what you’re keeping, could be savings.
It’s really important to have this type of a perspective, this big versus little, or “How much can I keep, or do I keep, versus how much am I spending?”
These big expenses are so important because they’re helping you to keep your finances in order. They’re helping you to protect your finances. Or pay these big chunks of things that you have, like savings for something down the road. And so this change in mindset, may help you to see how you’re spending versus how much you’re keeping.
Here’s another example of how stores trick us into thinking we are savings: you see a “sale”, but really you have to spend more than you were originally comfortable with to get the savings. It’s that kind of a mindset. “How much am I keeping, by what I’m spending?”
Hopefully this helps you change your perspective. Because in the end it could really help your overall plan to save more money!
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