Sunday, August 31, 2014

What Your Wallet Reveals About Your Spending Habits


Many Americans carry a wallet however according to 80% carry less than $50 in cash daily.  Approximately 50% carry $20, and 7% carry more than $100.  Did you know that the type of wallet you carry and how you organize it describes how you manage your money and your life? 

An old worn or torn wallet may show that your wallet is used to serve the purpose of holding your money and don’t believe a lot of money should be spent on wallet.  If your wallet is organized neatly it shows that you organize your money and your finances as well as your life.

If you keep everything in your wallet including receipts from 5 years ago like George from Seinfeld that may show that you are not organized with your money, your finances or your life.  Carrying a designer wallet may show that you value image and appearance.

If you never have cash or never have enough cash that is a red flag that you need to adjust your spending habits quickly to prevent a financial crisis such as filing for bankruptcy, foreclosure, judgment, or tax lien.

If you have money in your wallet but never know how much you have you also don’t know how much you spend.  This is a red flag that you need to create a budget.  I always keep track of how much I spend down to the penny.

If you find money in several places in your home or car that is a red flag that you are not responsible with your money.  If you don’t manage the money you have now when you have the ability to earn more you will not be able to manage it which will result in bigger financial problems.

If you have more than one credit card in your wallet that is too many.  Carrying several credit cards in your wallet is very tempting and will cause you to spend money you don’t have or don’t need to spend.  I only carry my credit card when I know I am going to make a purchase. It is best to carry a debit card or cash. This reduces your chances of identity theft.

Not knowing how much money you have can lead to bad money habits such as frequently using your credit card, bouncing checks or overdrawing on your checking account.  This can also carry over to other financial accounts such as your savings, retirements, college savings account, etc.

It takes 23 days to break a habit.  If you think about how you spend your money every day or how you manage it, you will be able to break the bad financial habits and become a better shopper, spender and will eventually become a role model for your family and friends.

The first step to managing your money is knowing how much you have and keeping it in a safe place such as a bank account.

My wallet is ten years old and I don’t plan on buying a new one anytime soon. It only matches one of my purses but I don’t care.  I will keep carrying it until it can no longer serve the purpose of carrying my money.  Until then, I will continue to be unmatched.

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