How to Spend Money Wisely

Posted on August 27th, 2009 by aileen

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With the global financial crisis we are currently experiencing, it’s very important to be a wise and responsible buyer. Don’t waste your hard earned money on unnecessary things. Here are some pointers to help you spend your money wisely.

Tips:

Make a list. Knowing the things you should buy will prevent you from buying unnecessary things.
Prioritize.Divide the items on the list into 3 groups,needs, bills and wants. Purchase the items you need first and pay your bills. If you still have extra cash, buy the things on your want list. (Learn how to recession-proof your grocery spending)

spending money

Have a budget and follow it. Allocate your resources properly. Your need list and bills should have higher budget allocations than your want list. Try to stick to your budget. Most people make a list and plan on a budget but don’t follow it.
Have an emergency money. Unforeseen events, like a family member getting sick and a car trouble may ruin your budget. Allot a certain amount of money for these things. You may try to split your salary in half. Use one half for your budget and keep the other half for emergencies. Deposit your emergency money in the bank. This will make your money earn interest while you don’t need it yet. It’ll also keep you from spending your emergency money on unnecessary things because it’s not with you.
Pay your bills on time. Avoid getting penalties becuase you forgot to pay on time. Highlight the due dates on your bills. Write these dates on a piece of paper and put it on a place where you can always see it. You can also just mark your calendar so you don’t forget those deadlines.
Avoid using your credit card. If you don’t have any yet, don’t get one. Unless it’s really an emergency, try to limit the use of your credit card. Credit cards tempt you to shop irresponsibly because you don’t really see how much your spending until your bill arrives. Interests on your credit card may also eat up your budget. (Tips on how to get rid of credit card)
Find a clearance store. Discount stores and mallwide sales will help you save money while being able to buy the things you need and want.
Don’t splurge too much. It’s not wrong to treat yourself once in a while, but try to limit the amount you spend. Watching a movie or going out for a fancy dinner with your family once every 2 weeks is good enough. If you can’t afford that pretty necklace right now, put it on your want list and save up for it. who knows, it might even be on sale a few months from now.

Spending money wisely doesn’t mean you have to let go of all life’s pleasures. The key to spending wisely is having a budget and sticking to it. You may have a well thought out budget and an impressive need and want list, but if you don’t follow it, it’ll just be put to waste. Don’t be impulsive. Think before you act. For more information, read Top 10 effortless ways to save money.