The summer tends to breed optimism among consumers from all parts of the world, from the UK and Europe and the U.S. This has certainly been highlighted by recent statistics, which suggests that consumer spending begun to rise exponentially in June and continued to climb steadily throughout July.
While this may good for the summer economy, it is unlikely to benefit customers who fail to budget and make impulsive spending decision based on emotion. Individuals who spend heavily during times of growth and prosperity often fail to save on a regular basis, leaving them exposed when the economy declines or sentiment begins to fade.
What are the key behaviours that lay the foundation for Wealth?
While this type of behaviour may prevent you from achieving any long-term financial goals or security, however, there are others that are central to the gradual accrual of wealth. With this in mind, here are three key behaviours that will help you to save a greater percentage of your hard-earned cash: –
Make a commitment to Consistent Spending and Budgeting
Consistency is one of the key behavioural traits that wealthy individuals boast, as they spend according to a fixed budget and make that they save a fixed amount of their monthly, disposable income.
This behaviour has been highlighted during numerous studies, including a recent wedding survey that canvassed the opinion of respondents throughout the UK. The report found that individuals in the wealthiest parts of the country spent a comparatively small amount of wedding gifts, while those in less affluent regions spend considerably more.
Clearly, those with greater amounts of disposable income will not be cowed into spending outside of their carefully structured budgets, regardless of the occasion or emotive sentiments such as sentiment.
Consider Frugality as a Lifestyle Choice rather than an Interim State
To some, frugality is associated with a lack of wealth and considered only as a short-term measure to achieve a specific goal. To those with an ability to accrue wealth, however, it is a full-time lifestyle choice that dictates all spending habits and an overriding consumer outlook.
Rather than associating frugality with austerity and a lack of resources, those with wealth consider it in far more positive terms. Wealthier citizens have committed to frugality as a way of living, as they look to save money by minimising the cost of everyday items such as groceries, insurance and commuting. This helps them to optimise the amount that they can save on a regular basis, and creates additional capital for more lavish, bigger ticket items.
While such a commitment requires dedication and takes time to reap rewards, it is the foundation for any long-terms savings plan regardless of the economic climate.
Credit can never be used to sustain an existing Lifestyle
While student debt is considered to be the next big crisis in the U.S. and the Western world, not so long ago it was credit cards and mortgage arrears that were crippling the global economy. The biggest issue with this was the typical consumer’s attitude to short-term credit, which was being used to sustain an existing lifestyle and plug any shortfalls in income.
This behaviour is completely alien to those with savings and wealth, as these individuals find the idea of being in debt abhorrent and strive to keep all spending with their existing means. This means that credit should only ever be undertaken to fund a big ticket purchase such as a car or a home, while the cumulative cost and those of any monthly repayments are carefully calculated to fall within a predetermined budget.
This is a pillar of frugality and saving money, as it helps to avoid needless debt and ensures that you only ever spend capital that is available to you.