Making wise spending decisions goes hand in hand with saving. Budget as
much as you can each month toward a savings account or other reliable,
interest-accumulating investment. The more money you save each month,
the better your overall financial health will be. Which is pretty much
the point of spending money wisely, isn't it? Here are some savings
ideas for you to consider:
- Establish an emergency fund.
- Start a Roth IRA or a 401(k).
- Avoid unnecessary fees.
- Meal plan your meals for the week
Compulsive habits such as smoking, drinking, or gambling can easily
consume any money you save. Eliminating them from your life is both a
boon to your wallet and your health.
3. Don't buy what you don't need.
If you're unsure about
a particular purchase, ask yourself these questions. If you don't
answer "yes" to all of them, that's a strong sign you shouldn't spend
the money.
- Will I use this item regularly? Make sure you'll drink all that milk before it goes bad, or that you have enough summer months left to wear that skirt more than a couple times.
- Do I lack something that serves the same purpose? Beware specialized products whose role can be performed by basic items you already have.[15] You probably don't need ultra-specialized kitchen equipment, or a special workout outfit when sweatpants and a T shirt will work just as well.[16]
- Will this item change my life for the better? This is a tricky question, but purchases that encourage "bad habits" or cause you to neglect important parts of your life should be avoided.
- Will I miss this item if I don't buy it?
- Will this item make me happy?
4. Prune your hobbies.
If you have a gym membership and
don’t use it, don’t renew it. Avid collector turned to lukewarm
possessor? Sell it. Devote your finances and your energy only into areas
you are truly passionate about.
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