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You Are Money's Master - Financial Fasting and How To Control Your Spending Using the Principle of Kaizen: One Small Step At A Time

One financially-related activity that I like to perform as often as possible - especially when I've gone through a bout of either over-spending or a period of reduced cash flow - is to force myself to not spend at all for at least one day a week, if not the entire week. It's an activity that's similar to fasting, and like that activity, can help you purge pysche of spending guilt, and maybe even help you on the road to financial recovery.

I got the idea from a yearly event where, on a specific day of the year, you are encouraged not to buy anything. Obviously, there are many people who are not going to promote such a day, so you may not have heard of it. In fact, I'll be honest and say that I can't remember what day of the year this unofficial event is on. But that doesn't mean you can't follow its principles on any other day. In addition to this "spending fast", I also apply the Japanese principle of Kaizen (originally part of the Chinese principles of the Tao te Ching). Kaizen is the practice of improvement through slow degrees, or one small step at a time.

Try it yourself. It's not an easy task, and you may only be able to accomplish it for one day a week. Or you may manage to go through it for a few days, but then go through spending withdrawal and end up spending more after this "fasting" period. If so, fight that withdrawal by spending very small amounts. Spending addiction almost always exists due to depression or feelings of low self-esteem. To fight such addiction is not easy without solving the real problem, but I find that my "spending fast" helps me. Applied regularly over a long term, it has helped me not only reduce my "urge" spending but also to live on a smaller budget.

Here's the easiest way to start: pick a day of the week when you typically don't spend very much. For many people who work a regular 9-5 job, this day is Sunday. People tend to stay at home, do laundry, or visit family members. Remember, the idea is to not spend a single cent, including debit cards, credit cards, etc. If this impossible because you need gasoline or a bus ticket, or some other "necessity", then give yourself a very low limit of, say, $3-5. Then next time, try reducing this limit or buy gas or transit tickets on a different day. Or consider a monthly pass.

Curtail all your spending for a single day each week. This means no going out to dinner, nor even buying a packet of chewing gum. The goal is no spending in any form. You can, however, use any coupon that does not require you to spend any extra money, including taxes.

As I said, you'll probably go into withdrwawal at first. So spend only on items that are an absolute necessity. If you are aware of your daily habits - such as coffee or chewing gum or croissant, etc. - then try to abstain one item at a time. Even if it takes you weeks to accomplish a wholly spend-free day, that's better than never getting there if you give up. Go slow.

Perform these "financial fasting" periods properly and without anxiety, and you'll experience a catharsis that actually boosts your feelings of self-worth. This creates a positive feedback loop, which allows you to continue this activity. Similar to the way that food fasting clears your body of toxins, financial fasting helps you slowly clear your mind of negative perceptions about money and yourself. Just make sure, however, that you have some long-term positive purpose selected for the money you save: it'll help you to continue these exercises.

(c) Copyright 2005-present, Raj Kumar Dash, http://smackeroonies.blogspot.com

Technorati : debt control, debts, financial fasting, kaizen, one step at a time, saving money, spending addiction, spending guilt

Penny Stock Investing? Burn Your Money Instead

I could give you my standard metaphysical bent on money, success, and wealth. But not today. Let me get to the point: If you have a choice between investing in penny stocks - i.e., shares are worth less (worthless?) than a dollar - or throwing your money into a bonfire, choose the latter. At least you'll get some warmth as you watch the sparks and pops of your hard-earned cash burning. Having invested $3000 into a mining penny stock, watched it go up several cents (about $600 increase in my holdings) in one day, then thrown in another $2000 of my job bonus money, I yanked out my hair when the stock dived down for the next five market days. At this point, I called up the company and got one of the top dogs, who was chuckling on the phone while eating a peanut, as he told me. Something about his tone of voice, something about the way he evaded my questions suggested that maybe he was chuckling at me.

So, now this is only my opinion, but there are only three reasons to invest in a penny stock:

(1) You own the company.
(2) You know someone that owns the company (but this is dangerously close to insider trading).
(3) You like to throw away money. (Instead, throw some my way, and I'll invest it for you.)

Enough said.

(c) Copyright 2005-present, Raj Kumar Dash, http://smackeroonies.blogspot.com

Technorati : day trading, investing, penny stock, stock market

Poorest People Are Happiest Part II

I can't explain the rationale, but during the time that I was at the poorest in my life was also my most spiritually-fulfilled and happiest - aside from my worries that I should be taking care of my parents sometime soon. It may have been the fact that I was freed from the normal stresses of a career: sitting in traffic during daily commutes, meeting impossible deadlines, reporting to a boss with some twisted agenda, working with colleagues who always seem to think that I'm a threat to them because of my experience. Whatever it is, I found some happiness, despite the struggle to pay my bills. Money might make us happy, but it isn't ever enough by itself.

(c) Copyright 2005-present, Raj Kumar Dash, http://smackeroonies.blogspot.com

Technorati : happiness, poverty, spiritual fulfillment, wealth

Don't Take Cash/Pay Advances - Charge Yourself Interest.

I know this is obvious, but it helps to be reminded: Don't take cash advances if you can help it. Cash loans can turn into evil temptors/temptresses. Having cold hard cash in advance is so alluring. And if you have a spending addiction, it gets very easy to keep going to your local friendly cash-chequing place and get an advance on your next paycheck. Think about how much interest you're paying them. I know from hard experience that, once you start doing this a few times, you start spending the next paycheque sooner - even before you get it. This is the surest way to financial debts as well as personal problems with those that care about you. Use one credit card maximum, and only for emergencies or big ticket items - where you know that you'll be paying it off by the end of the month, before your credit card company charges you interest on the purchase.

Now that said, I know how damn hard all this is to do if you do have an addiction. As a starting point, the next time you're about to spend cash on something you don't absolutely need, turn around, turn away from wherever you were going. Either put the entire amount into some form of savings (piggy bank rather than bank), including the amount of service charge the cheque-cashing place would have docked you.

If you have no discipline, hand your money over to a trusted friend or relative. Or put it in a "one way" piggy bank. Then, every other day, don't spend your money if you don't have to. If you can go one day without spending money, you can go two. Obviously, you can't keep this up forever, but try to never spend money two days in a row for anything other than, say, parking, toll booths, or emergencies. It gives you some structure to work with, something most of us spending addicts have trouble establishing.

(c) Copyright 2005-present, Raj Kumar Dash, http://smackeroonies.blogspot.com

Technorati : check cashing, cheque cashing, finances, interest charges, pay advance, saving