Mind Over Money

Get rid of your old habits to make for a healthier relationship with money

“The implication is, if you are trying to save, it makes a lot of sense to try to budget yourself with cash because you feel the full impact of the pain of paying,” she says. Paying in cash makes you think about whether you really want to part with that money.

The Right Balance
Ready to take charge of your spending? Start with a money journal. Donna Rosato, a senior writer at Money magazine, recommends writing down everything you spend for about six weeks in order to get a clearer picture of your spending habits. You don’t need to be a math whiz -- free sites like Mint.com and Quicken.com make it easy to track and budget money. Chances are you’ll see patterns.

Then you can start to figure out your values and what really makes you feel good. What are you willing to go without so you can go to the movies every Friday night? Do you need a daily latte at Starbucks, or are you okay with brewing coffee at home and filling a to-go mug? What about bringing your lunch to work instead or ordering out, or replacing a few dinner dates with dessert and coffee dates?

Once you figure out where you are and where you want go, “start by stopping,” Rosato says. You don’t need to cut your credit cards up, but you can take them out of your wallet or switch to a debit card. “It’s still plastic, but it’s linked directly to a cash account,” says Rosato. “As long as there is a MasterCard or Visa logo, you can use it like a credit card and are protected if it’s stolen.” The built-in safeguard is that you have to be conscious of your spending or you’ll overdraw your checking account.

Money can’t buy you happiness, but understanding the emotional reasons behind your spending, and gaining control over your money by discovering new ways to find joy, just might buy you piece of mind.

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