It’s no secret that as a society, we are addicted to spending money. It doesn’t matter if it’s a product or service, with our busy lives and overflowing inboxes we will find the time to spend. What may be less obvious is how hard it can be to prioritize what matters most in our daily expenditures. We are all on a budget, but we don’t always know where our priorities lie.
According to a recent study by Bankrate, Americans have on average $100,000 in consumer debt. It’s important to keep in mind that this number consists of mortgages, credit card debt, student loans and car loans. The number is essentially the total amount of personal debt Americans carry; from big purchases to regular everyday spending habits.
That said, though, there are many ways in which you can cut back on excess costs without limiting your ability to live a happy and fulfilling life. Below are some options to consider.
Why It Makes Sense
The key to getting more out of your money in any situation is to make sure it’s being spent wisely. You can start by taking steps now that will allow you to make better decisions later, and, ultimately, spend less money. The best way to start? Make a budget! A budget helps you decide which expenses are important enough to spend on and which aren’t. You can get more out of living a full life if you use this tool when planning for the future.
The next step? Start budgeting and spending wisely, so that you can put more money in your pocket over time.
How to make a budget
It’s not as difficult as you may think. You can figure out how much your family needs to live on each month, and determine what you can afford. You will need to estimate your living expenses, including groceries, utilities and transportation costs. Then take a look at what you spend each month and keep track of how much is being set aside for important things like housing, education, retirement and a savings account to help with emergencies.
How To Get More Out Of Your Money
In order to get more out of your money, it’s important to decide what you spend it on. You may think that the occasional cup of coffee is a reasonable expenditure, but it’s not. The same goes for that sandwich at lunchtime. Look at how much you spend each day on food and drink (including water and soda), and then take a look at your other expenses. You may be surprised to find that some of your other spending. This is especially true when it comes to clothing and footwear; let’s face it, we all spend too much on shoes!
As well as limiting your spending in these areas. You must be mindful of what you are spending your money on. Cut back spending on unnecessary item. That will ensure that you start saving money every month. In the long run, you will feel better about your budget and see that money going further in your life.
Review your credit card expenses
Take your credit card statement for last month. Think about what brings you joy and what doesn’t. Take a moment to mark down the items that bring you joy and the ones that don’t. These are the things you need to avoid spending money on. Look at your credit card statement again and highlight all the items that bring you joy. Spend money on them. Same goes for the items that don’t bring you joy. These are the things that you should spend less money on. You may think it’s hard to cut back on things such as lunches out, but remember buying just one lunch at a place that serves bad food is more expensive than eating in at home! Don’t spend money on small things that don’t bring you joy. For example: get rid of those shoes that you don’t wear anymore or cancel that magazine subscription that doesn’t bring anything good into your life.
Write down the item before you purchase it
Imagine yourself purchasing it, especially big items. Now, write it down on a piece of paper. Come back to the paper two days later. Do you really want it? Did you forget about it? If yes, then you should buy it. If not, then you shouldn’t spend money on it.
What do you value
It’s important to make sure what you spend money on is worth it. Maybe you love getting manicures and pedicures, but are they really worth the money you spend? You may want to rethink how much time and money you spend on them, and instead invest in a nail clipper that costs less. Sounds silly and it is just an example but nail clippers will save you money in the long run, as well as the stress of having to book an appointment every time your nails grow. Look at what is important to you.
Spend money on experiences with the ones you love
You can have a great time spending money on experiences with the ones you love and these experiences normally cost less than items that just stay in the closet. Getting more out of your money shouldn’t mean buying more for the people in your life, but spending more time with them instead of on them.
Make it a goal to save money
If you’re not saving enough money, you may need to set some financial goals. Maybe you want to buy a new suit for work or save up for a vacation or a new car. If this is the case, smart saving is the best way to go. Set an amount and date for the purchase, and save towards your goal. What are your financial goals? Write them down right now! The next step is more challenging because spending less on your current expenses so you can achieve that goal.
What is it about money that makes people spend more than they should? If you ever find yourself in such a situation, take some time to reflect on what matters most to you.