6 Jan 2010

The Actual Value of Spending

I don't know if I am a shopping addict, I presume I am not, but...
Recently I found a spending Weigh-in journal very interesting and indeed an eye opener! It's a simple table that you suppose to fill out the same way as you would fill out a weight-in table if you were on a diet.

It is quite interesting that most books and psy-articles compare spending and personal finance management to eating / overeating and well ... to dieting!

Motivating yourself not to spend on a particular item, for example, seem to work in the same way as motivating yourself not to eat a chocolate bar ...

Anyway, back to the money diet!

The spending weigh-in journal would look as follows:

The necessity score is a what you perceive the buy meant to you. Petrol, if you ran out of it, is a necessity of 1; whereby a coffee on your (read: my) way to work is somewhere between 0 and 0.3. If you’ve honestly kept your daily numbers, the weekly summary will tell you just how much you might have saved had you bought only what was more necessary rather than less. And it’s usually a lot more than you’d have guessed.

April suggests to keep this dairy for at least two to three months to really anderstand your spending pattern.
I have to say - it requires some degree of dedication and quite a lot of pressure for change! I find it very hard to write down everything (as it in itself looks "bad") and than the necessity value assigning business ... that's really tough! I've tried it for a day now and I have to motivate myself over and over again not to abandon it
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