Money can be difficult to manage, especially if you are an impulse buyer. Impulse buyers can relate to the challenge of figuring out what to spend and save. Impulse buying is frequent among individuals looking to satisfy their wants beyond basic needs.
Segregating the two and identifying when to spend on luxuries has become essential to survive in recent times when money is continuously losing value. Here, a few crucial tips will be identified regarding what to spend and what to save as part of your bookkeeping process.
Set Priorities
The first and foremost step is to set your priorities right. Here, priorities refer to choosing what you need over what you’d be interested in buying for luxury spending. For instance, a top priority could be spending money on basic needs like food and clothing. Remember, food and clothing can fall into either basic or luxury categories.
Moreover, paying your bills first and then deciding on your monthly expenditures is always a good idea. Here is a systematic way to do it: pay your bills, spend on basic needs, spend on what you can’t live without, keep some money away for savings, and whatever you are left with can then be used for luxury spending of any sort. Follow this order religiously, and you will not run out of cash as and when required.
Keep an Emergency Fund
It is essential to keep an emergency fund where you can stack up all your savings when you run out of cash. You may fall back on this fund during job loss, when there is insufficient money to fulfill basic needs, or in medical conditions where you need to purchase the necessary medications. It can also be used during the last few days of the month when essentially every one of us is out of cash for that special take-out extra pepperoni pizza on a cheat day.
Don’t Listen to Your Impulse
Conquer the struggle of what to spend and what to save by avoiding impulse buying. We often tend to pick up items that are too fancy and inviting while grocery shopping, or, in other cases, we are just attracted to them purely because of a promotion. The overwhelming excitement of a product wears off eventually, and then you see no point in making such a purchase. Hence, it is better to stick only to the grocery list items and not deviate from them unless necessary. Caution! Necessary here doesn’t equate your impulse.
Be Resourceful
Here, you are being asked to save a little. How so? Let’s identify a few ways to save a few bucks on your routine expenditures.
- Try to use discounts and loyalty cards in avenues that offer similar options.
- Buy your monthly/weekly snacks when you plan your routine grocery visit. Do not buy snacks every day.
- Once every three months, plan a garage sale. You can get rid of those impulse buys this way.
- Try to opt for generic but healthy items rather than overspending on brands.
- If you want books, use the nearest library rather than buying them.
- Use the internet for essentials such as watching movies, listening to music, and binge-watching your favorite series rather than going out and spending a lot on entertainment.
Make a Budget and Follow it
Lastly, another useful tip involves drawing up a realistic budget and sticking to it. A budget will enable you to list your monthly expenses and income. Simultaneously, you may also draw up a list of your needs and wants. Once the allocation is complete on each item, you will have an estimate of how much money you are left with to satisfy your wants. However, this extra money must not be entirely spent on that particular want. A portion of it must go into the emergency fund and savings.
Conclusion
These five tips can help you navigate the struggle of knowing what to spend and save without much hassle. Stick to them, and you’ll be good to go!
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