Sunday, May 12, 2013

I have had the opportunity to study sales professionals in all types of industries and in all income categories. No matter what industry and no matter what income category there is one burning question that sales people often ask themselves, "Why do I have no money?" If you are in this category, listen up, I've done the research and I have the answer.

The number one reason why many sales professionals have no money is that shopping has become recreation. Why do you shop? If you are like many people, you go shopping for something to do! If you ever find yourself heading out to a store without really needing anything, you have become a recreational shopper. I can pretty much guarantee you that if you go to a store with stuff you like, you will find something to buy. Of course, shopping can be fun. However, it can and will lead to an empty bank account.

The fastest way to build a savings or retirement account is to stop shopping, except for when you need something. Find ways to build the same thrills of achievement that you get from making a purchase into thrills for reaching monthly or yearly savings goals.

Here are a few simple steps for curbing your spending appetite and putting that money into savings:

1. Don't Go Shopping For Fun: Do not head out to a store if you don't need something. You are simply asking for trouble! Keep your shopping to the bare minimum for items like food and clothing.

2. Pay Cash: The fastest way to dig a hole for yourself is to use credit. You definitely should not be shopping if you do not have the cash to pay for it. The credit card companies will charge you 20% or more above the purchase price for you to use their dime, so do not use it. Hold strong and if you don't have the cash don't buy stuff.

3. Mint: There are some great apps out there for helping you stay within budget. One of my favorites is a free app called Mint. You can set a budget for anything and it encourages you to track all of your spending. By doing this, you quickly see how your little expenditures add up over time. Your $5/day coffee habit is $1820/year. Compound that money over time and you've got a decent start to a retirement plan.

4. Fill Your Time: I've found that recreational shoppers often shop because there's nothing else to do. All I can say is that to break your shopping habit cold turkey you must invest your time in doing other things. Take your family to the park, pack a picnic, go bowling, rent a movie with the family, go to the beach, read a book, you name it. Google "Free Stuff To Do" in your town and I'm pretty sure you'll find a long list of events and programs that you can take advantage of.

5. Get Your Family Involved: Rather than teach your family the importance of buying new things, try teaching them the importance of saving money. There is an awesome new program for parents and kids called www.Tykoon.com that teaches kids the value of money, hard work, and savings. Set up a free account with your kids and show them how to save.

It is all too common that I run into sales professionals that have no money. Often I'll ask a few simple questions to see if I can offer ideas on how to start saving money, but the most important concept of all, is to stop spending. Nothing has a greater effect on your pocketbook as time. This is good and bad. If you get into the habit of saving a little every day, every week, and every paycheck, time will treat your money well. On the other hand, if you get into the habit of spending through recreational shopping, time will not treat you so favorably.