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Use Personal Visual Clues to Avoid Overspending

The following post is from Linsey of Wise, Lille Punkin’ and The Freelance Farmer:

personal finance choices
source: bzmillerboy

I really envy those moms who have it together when it comes to using coupons and saving big money. Those super-savvy experts like Deal Seeking Mom, for example, have the clearance prices and stockpiling techniques down to an art. But what about the rest of us?

If you find that tackling large money-saving techniques head on is intimidating, check out these easy visual strategies for cutting your budget down a little at a time:

1. Figure Out What Your Time Is Worth.

For those of us who have jobs outside of the home, or who work from home, we have an hourly rate that we charge our boss or our clients. This hourly wage should be visualized every time you buy something that you’re not certain you need right now, and this should be communicated to your family, as well.

For example, if you earn $12 an hour before taxes, and you want to get your hair cut at your local stylist, it may take you several hours of hard work to pay for the appointment. If you were to head to the cheapo salon inside the big box store, however, you would only have to work one hour to pay for that hair cut. While I’m not suggesting that you forgo the cut because you just can’t stand the thought of working for that particular purchase, it may help you to extend the time between stylings or help justify why you don’t have the next Shear Genius finalist maintaining your ‘do.

Even if you are a stay-at-home mom with no outside job, your time is valuable. Just figure out what it would cost to hire a sitter, house keeper, or cook to step in for you, and that’s the hourly wage you can judge your purchases against. If 2 hours of hard housework seems like a lot, maybe it’s time to start packing lunches for long car rides, instead of stopping off at the Golden Arches for a quick bite.

2. Think of Savings in Terms You Understand (and Care About).

Every time I shop at my local grocer, I get a receipt detailing how much I saved with sale pricing and manufacturer’s coupons. Depending on the day, it can be as much as $15 or as little as $0.60. But what does this mean to me? And how can it motivate me to keep clipping, comparing prices, and shopping sales?

Lately, I’ve started using the goal of 7.5% savings as the “magic number” I strive for when shopping. Why? Because this is the state sales tax rate where I live, and I hate paying sales tax. It becomes very easy for me to cut just enough coupons to reduce my grocery bill by 7.5%, because I think of it like the kind folks at Proctor & Gamble or Tyson are paying my share of the state tax. This makes me smile… and helps me to stick to my coupon clipping. Taxes are my savings term, but you can use your own percentage goals to help you stay on target with your sale shopping.

With so many authors and experts speaking to us in their terms (the “Latte Factor”, for example), it makes me realize that personal finance works only when it is truly personal. (I buy only one latte a year!) Find out how to tie money into things that make you tick: time with family, saving for a vacation, or having enough savings for a medical emergency. Then stick with small steps that mean much and show results!

Linsey Knerl is a homeschooling mom of 5, the Community Manager for Wise, and a freelance blogger and writer. She co-authored the recent 10,001 Ways to Live Large on a Small Budget, and you can read more about her at Lille Punkin’ and The Freelance Farmer.