paycash.jpg1. Have I paid all my basic living expenses?
Rent or mortgage payment, utilities, groceries, savings: these come first, prior to any discretionary expenditures.

2. Have I paid off all my credit cards?
Credit card interest rates are some of the highest, rivaling those of your local loan shark. Hedge funds in their heyday would be delighted to MAKE those kinds of returns, why should you be dumb enough to PAY them? Enough said.

3. Can I pay cash?
There is something about the physical aspect of counting out cash that drives home a fuller reality of the act of spending, making it a little harder to part with our hard-earned take-home pay. Also, the less cash we carry, the less “flush” we feel and the less likely we are to succumb to the lure of impulse purchases.

4. Is the price reasonable? Can I get a better price elsewhere?
Why should you pay more than you have to? Winners get the best price (taking transaction cost into account, of course; don’t drive across town to save 50 cents). When you are an intelligent consumer, you help make the entire economic system more efficient.

5. Will I want it tomorrow?
Know yourself well enough to know what impulses are fleeting and which represent deeper desires. When faced with temptation, I often tell myself I can have it…tomorrow. Nine times out of ten, tomorrow comes and life has moved on. This works with food as well: I will frequently tell myself I can have seconds if I still want some in 10 or 20 minutes. Time passes and often I find myself feeling more full than I realized as my stomach catches up.

6. Am I being honest with myself?
Have you ever analyzed what really makes you happy? Content? Satisfied? What do you remember most? What thoughts and experiences linger most in your mind? What brings the greatest smiles to your face? What are the 5 worst expenditures in your life? The 5 best? What factors do they have in common? What did you learn? What lessons have you applied?

7. Is it low maintenance?
Do you really want one more thing to take care of? One more thing to clutter your closet? One more thing that seems to own you more than you own it? Will I really use it? Does it have staying power? Will it stand the test of time?

A key to spending money wisely is to make it fun. Fiscal responsibility is a lot easier when you have an inspirational goal. Financial independence is a major motivator for many people. While an exotic vacation can bring one kind of pleasure, many people have found that a much more economical camping trip to a nearby national park combined with a nice addition to their savings brings both pleasure and a deeper peace of mind. Take a quiet sense of satisfaction in your ability to manage your money and spend intelligently within an overall plan. Feel a deep sense of satisfaction from your ability to build a bulwark of savings.