Most frugal living blogs out there will give you specific advice for saving money on one or more aspects of life, like how to cut down on your grocery bill, how to pay off your student or credit card debt, or how to avoid spending too much during vacation. While these types of articles can be very helpful for those of us who are financially impaired, I think some more general advice about money can be equally as enlightening. Based on a few articles I've read about the psychology of money, here are a few tips for spending money using your head.
1. Don't spend a lot of money on a new hobby until you've achieved a certain level of mastery.
Although this tip is pretty specific, it can apply to lots of different areas of financial health as well. I've noticed that many people have a tendency to buy all the most expensive gear for new hobbies before even really learning the hobby. For example, you may buy a nice guitar before really knowing how to play it, or you'll buy a pricey treadmill before really dedicating the time to exercising. Invest cheap and reward yourself with better gear once you've really achieved some measure of success.
2. Never go to the grocery store hungry. Or, don't spend money when you've been deprived.
This is an oldie but it's a goodie, and it's generally true in life as well. We human beings have lower reserves of will power than we'd like to think. As such, if you've been depriving yourself of anything for awhile, you'll inevitably go overboard whenever you do finally decide to give in.
3. Saving is not the same as penny-pinching.
Saving money is something that we all reasonably aspire to, and it's definitely a noble and worthwhile goal, as good finances are part and parcel of a good psychological health. At the same time however, penny-pinching is the act of going to an extreme, which can be devastating to your emotional well-being, too. If you plan your budget well, leaving room for the occasional slip up, and you enjoy your spending your money when you do spend it, then you are on your way to financial success.
4. Avoiding a financial problem will never make it go away. Trust me, I've tried.
There's something about keeping track of bills and other money matters that makes nearly everyone I know cringe and sometimes engage in avoidant behavior. When I was in college and had problems keeping track of overdraft fees, I'd continue spending money. For some reason, I just avoided checking my balance because part of me simply didn't want to know. As you can probably guess, this was a terrible strategy and I ended up in the red more times than I'd care to admit. Denial never really works in any respect, not least of which with money. So if you find yourself thinking about a bill or anything related to money, stop what you're doing and get it done immediately. You'd be surprised by how mood-lifting tackling money problems right away can be.
