One of the ways you can improve your finances is by trying to be a smart spender. But in this day and age, what does it mean exactly?
A lot has happened in the past few years like the health crisis that led to the pandemic. It affected not only the health sector but the economy as well. And it was not only here in the US but other countries around the world also felt the impact of the pandemic. There were several businesses that had to scale down and adapt their operations to stay afloat.
This meant letting many workers go or putting their workforce on furlough. Pew Research mentioned that about 9.6 million American workers lost their jobs at the height of the pandemic. It was a tough time for a lot of people. At the same time, it was also a steep learning curve for a lot of families especially when it came to their finances. A lot of people saw the importance of staying on top of their finances and even having an emergency fund.
Being a smart spender was crucial at that time since income was limited. And now that the economy is starting to recover as the pandemic eases up, the lessons from spending wisely still hold true for a lot of people. But what exactly are the ways to help you spend your money better? Even now that the economy is beginning to turn back around.
Here are a few things to help you become a better spender and manage your finances better.
Check the quality of the item
Inexpensive items are great but you also always need to check the quality of the items you are buying. Just because it is cheap does not mean you always have to choose it over the other options. Yes, you need to save money but if you stop to think about it, is it a smart spender move to always go for the lowest price?
At the onset, you get to save money. However, you need to put a premium on quality as well. Say you buy an inexpensive television set but because the quality is not good, you end up buying another one in just a few months. But if you buy a more expensive but high-quality unit, you end up using that unit for a longer time. This actually saves you money in the long run.
Quality normally means paying a higher price for the items you will buy. But you also have a direct hand in making sure the items you buy last for a long time. You need to take care of the things you buy. Using it correctly, maintaining, or even cleaning it. The more you take care of the things you buy, the longer you could use them. In the end, you save money from having to make repeat purchases.
Do not skimp on necessities
Being a smart spender is not always about saving money. Oftentimes, it is about having a firm grasp of our financial priorities. And when it comes to priorities, your needs would always take precedence. This means that you should not skimp or even go and skip over your needs. It could put you in deeper financial trouble.
Your needs are pretty basic like food and shelter. But there are other things you need to keep in mind as well. The recent health crisis underscored the importance of being healthy. At first, this was physical health where you need to make sure your body is in shape. Eating right and exercising are a big part of this. There is also mental health that you need to prioritize to help you with your quality of life.
In all these, it also comes with related expenses. The challenge is to strike a healthy balance between spending for your needs versus going overboard. Take food for example, you need it every day but you do not have to spend too much every day. Explore preparing your food weekly so you can put them in the fridge and heat them as you need them. It will be less expensive and you lower the chance of ordering food to go.
Being a smart spender is looking at what you can invest in now to help you reach your goals in the future. And one of them is investing in your education. It can be for you or even for your children. For you, it could be a matter of going back to finish college or even getting some post-graduate degree to help you climb up in your profession.
Going back to school can be expensive simply because of the cost of attendance. That cost has been going up over time. But the thing is that getting a college education and even a post-graduate certificate can help you land better and higher-paying jobs. So spending on education is actually an investment that can pay off in the future.
How to save money
Being a smart spender can help you get to your goals but the reality is that it falls under expenses. That being said, it helps if you can grow and increase your savings as well. This can give you the money you need to spend on your needs. Here are a few quick tips to increase your income in the coming months.
Before you go look for a way to earn more, check if it is possible to spend less than what you have in your budget. This is when you take on a frugal lifestyle where you need to be creative and find ingenious ways to spend less than what you have already budgeted for. This can help free up some income in your budget you can use to invest or save.
Take your food costs for example where you can save money if you plan your meals ahead of time rather than buying takeout every single day. You can buy bulk in advance and prepare your meals one weekend. Then separate them into containers and put them in the fridge. This way, you have the food when you need them, and it’s just simply heating it up or cooking an already-prepared meal.
Save for wants
One of the biggest challenges, when you are trying to be a smart spender, is spending on your wants. This is challenging especially when you have been trying to suppress spending for wants. You could end up spending more than you have planned and undo months of hard work. This is why it is important to balance and have time for your wants as well.
One way to do it is to save money for the purchase ahead of time. Once you figure out how much it is you want, divide that amount over a few months. Then save for it so you can spend on your wants. It can be a new surfboard, camera, shoes, or anything that makes you happy. This way, you get to buy it but you do not dip into important funds you have been saving up on.
This is one of the many things people learned during the pandemic. It is important to have alternative sources of income apart from your day job. This way, if anything happens and you lose your main job, you have something to fall back on. It might not bring you the same amount every month but at the very least, you have something to work with and are not left with anything.
It is important that you become a smart spender to help you manage your finances and reach your goals faster. Spending money because you simply feel like it or because you are going through an emotional stage can derail you from reaching your goals.