If you are given $500 to spend, will you be able to handle this transaction effectively without going nuts? If so, this says a lot about your ability to do more with less, which is an important life skill to grasp.
Each of us, at some point in our lives, will have to manage a scaled down version of what we used to have in the past. I believe we are begin forced to manage a smaller amount of money than we’re accustomed to as this is how we will learn how to survive. In handling this small amount this is meant to test our judgment and ability to survive in tough times financially.
Managing $500 is not the main focus, this is just a number to illustrate my point. The actual dollar amount can be $1000, $10,000 or a much larger amount. The pivotal question is, do you know how to stay on budget when the dollars are small figures? Based on the results of how well you handle the $500 if you have access to more funds, there is a comfort level that you will know how to stretch your funds which would be the end goal.
There are typically three approaches people take when managing money. Which one will you follow?
Will you be one of those individuals who says, I can’t do anything with this small dollar amount so I’m going to wait until I get more money before I move? There are a lot of people who fit into this category. They are so used to having a lot of money in life so they can’t imagine trying to shop with this small dollar figure.
Or, are you going to be one of those people who take the $500 and are off to the races, trying to find the best deals for your money. The people in this group are most likely used to doing more with less and they are more equipped to handle these type of financial challenges. To them, finding a solution to stretch the $500 is a challenge that they welcome and embrace. They do so because they enjoy proving they have this skill. Instead of complaining about not having enough money, they take what they have and keep moving, which we must learn to do.
You also can be the third person, who takes the $500 and is so happy that you’ve received this money and treats it as “gold”. In doing so, you will hold onto the funds and use them only when it is an absolute necessity. The end goal for this person is to never spend the entire $500 so that he or she will always have something to fall back on.
Again, these are three approaches of how people will handle the $500 differently. I believe that your background plays a vital role in how you view this situation, and more importantly, how you would spend your $500.
As a person who has been in all three situations during my life, there is no right answer or wrong approach. It depends on where you are in your life and the probability of getting more money down the road. However, I believe that if you can prove to yourself and others that you have the ability to do more with less, than there is a good chance that you will get more funds to do more.
I recall in my youth, my parents gave me and my brothers and sisters this same test. We didn’t know it was a test at that time. We were given money to go food shopping and we were told this is all there was. I took off running to the discount stores so that I could get as much as possible. I also bought what was on sale in an effort to stretch my money. I used store coupons when it was applicable and got rainchecks for the items that had run out. In others, I was trying my best to get as much as possible for my allotment of funds, and the more I did, the more efficient I became at doing it.
In the end, when I got home and realized that I had done so much better than my siblings, in maximizing the $500. Since I did the best, my parents gave me the responsibility of doing all of the shopping going forward. This experience proved to me that if you are able to excel on opportunities where you are given a limited amount of resources, your upside in receiving more money next time is better than the others. This small experience turned out to be the foundation on which I started my career in finance and also helped me learn how to manage figures much larger than $500. Also, thanks to this early training, I haven’t had to use that skill too much in the last few years and that is where the long-term benefit has helped me and it will do the same for you.
If you are looking for ways to stretch your money, but still have a good life, consider the following:
- Instead of taking two weeks of vacation, take one week
- Instead of going to a 5-star restaurant for dinner every week, order-in occasionally
- Instead of keeping 3 cars, trying going down to two
- of buying suits from Brooks Brothers, buy from Department store
- Instead of sending your child to the Nike summer camp, send them to a local camp
- Instead of shopping at the premium stores, shop more at outlets
- Instead of buying lunch at the popular spot, bring your lunch a few days
There more items that I can add to this list but I believe that you get the point. In order for this to work, you have to be willing to live a less pampered lifestyle, and if you can, you will reach your goal.
In closing, if you can prove that you are capable of handling a limited amount of money, you will undoubtingly do much better in life than those who are unable to do so. As the business worlds continue to become more competitive across the board, the people who have this special skill will be our leaders of tomorrow. I hope that after reading this article, you will become one of these individuals because when you do, there is a good chance that you will get more than $500 to work with the next time around, and that is the point of this article.