In addition to lowering your monthly bills and expenditures, you need to look at your shopping/spending habits and determine if any changes need to be made.
 
This is extremely important for a number of reasons. Basically, how helpful would it be if you took time to research and implement effective money saving tips, then went out and needlessly spent $200 on stuff you really didn't need? You would have done all that hard work for nothing.
 
This is why it is important to not only lower your monthly expenses, but to also adopt the mind set that before a single dollar is spent on anything, weigh the cost, risk and benefits they will have on your budgeting efforts.
 
Cost - Risks - Benefits
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What does that mean - cost, risks and benefits?
 
Basically, this is a shopping mentality most frugal and conscientious individuals maintain WHENEVER they are faced with the choice to buy, or not to buy (the question every shopper should address before spending their hard earned money).
 
Think of this as a ritual you follow prior to purchasing ANYTHING. From the smallest trinket, to the most expensive gadget, get into the habit of comparing the COST - RISK - BENEFIT, before you spend a single dollar.
 
Regardless of how much it costs, get used to comparing these three important factors. For smaller, inexpensive purchases, you can simply weigh the pros and cons in your head. For larger, more expensive purchases, you should write down the benefits and consequences and discuss it with significant others in your family.
 
COST
 
First of all, the COST of the item/product you are thinking about purchasing. Is it reasonable? Will buying this product put a major dent into your spending allowance? Can you afford to purchase this product without having to change any spending/living habits?
 
Get used to questioning the cost of every purchase. Ask yourself questions such as - would it be better to wait for a sale or markdown? What about buying the item/product used or borrowing from friends?
 
RISK(s)
 
What is the RISK to you and your family if you do decide to purchase a particular product? In other words, how will it affect your lives?
 
For example, if you were to purchase a new $30,000 car, what effect would that have on you, your significant-other, your children, etc? Will you have to work more hours in order to get by? Will you have to cut back in other spending areas to afford this new payment? Will this added expense keep you from paying your other monthly bills with ease?
 
There are always RISKS to consider whenever you purchase something, especially when you purchase something with an expensive price tag. Many times we overlook these RISKS and simply buy without thinking about all the possible consequences. Keep this in mind and you'll avoid putting yourself and your family at RISK!
 
BENEFIT(s)
 
In addition to the risks associated with any new purchase, there are also some benefits to consider. At least there should be some benefits or you shouldn't even be thinking about buying it. In short, how will this product benefit you and your family? Do the benefits outweigh the risks?
 
To put this into perspective, imagine a large scale. The Item/Cost is in the middle of the scale, and on each side are balances. One side has the RISKS, the other side has the BENEFITS.
 
If you find that the BENEFITS outweigh the RISKS, then you know that the purchase is reasonable and will BENEFIT you and your family. On the other hand, if the RISKS outweigh the BENEFITS, then you may want to consider not buying that particular item. Why put you and your family at RISK if it's not going to benefit them?
 
Make it a habit to always compare the RISKS with the BENEFITS before buying. Not only will you find yourself becoming a more wise, careful shopper, you'll find this to be an excellent money-saving opportunity to help you in achieving your goal.
 
Next Issue - Part 6: Implement A "Game" Mentality