• Posted by:Big Brother

    2019-06-14

    06

    2019

  • How to spend money wisely. 10 tips you need to know

We all want to be wise with our money. But let’s be honest, that’s easier said than done.

For some, financial struggles are due to the fact that they don’t make enough money. For others, it’s because they spend way more than they earn, in other words, they are living beyond their means.

According to an article published on Business Today, African millennials would like to better understand asset financing, entrepreneurship and investment opportunities available in their respective countries. This is proof that young Africans are striving for financial independence, prosperity and believe in their own ability to charter their own course with a strong belief in the adage “Education is the Key”.

Improve your spending today with these ten tips/ quick, little improvements that can have a big impact over time.

Make a list of what you value

There are no “right” or “wrong” answers. This exercise is supposed to help you pinpoint what is important to you so that you can determine what sort of lifestyle you want.

Honestly evaluate what you value. Think about what you like to do now, and what you would like to do in the future. Sometimes, what you are able to do now is different from what you plan to do down the road. If you want to make your dream a reality in the future, you will need to make sure that your money choices now reflect the values that will help you reach your goals, whether they are savings goals or spending goals.

Take some time to think about it, and then alter your habits to reflect your values.

Make a list of things you enjoy

How would you define happiness? Write that down. Now identify the things that bring you this “happiness”.

Now ask yourself why you are spending on things that aren’t on that list. After all, life is short and we need to make the most of our time here and take in as much happiness as we can.

Bottom line- stop spending on things that aren’t at the top of your joy list.

Figure out what habits drain your Budget

Here I’m going to need you to re-evaluate your joy list.

Maybe one of the things you enjoy doing is eating out with friends, clubbing or shopping, just to name a few. That doesn’t mean that you need to eat out/ club daily or buy those 5 pairs of shoes because they’re on sale. Because the truth of the matter is, if chasing happiness leads to you being broke the second week after pay day, there’s a problem.

Think about your spending over the past couple of weeks.  When did you make the worst decisions (i.e. spending too much money or money you didn’t have, or spending on things you don’t value, etc.)? What was the cause of your poor choice?

If you can identify these weak points then you can begin to live your life in a way that helps to avoid some of these spending hot spots.

Implement a “sleep on it” rule

One of the tips that people with a shopping addiction are given to help curb that addiction is to “sleep on it”.

Before you make a purchase, especially an impulse buy, go home and sleep on it.

Decide today that for any purchase over a certain amount you will “sleep on it” before you decide. It could be one night, a week, thirty days, whatever.

Just allow some breathing room in between your desire and your decision to buy. Obviously this gives you time to evaluate the purchase against your values and your budget.

Think about the long term Benefits and Drawbacks of purchases

Just in case the “sleep on it” rule doesn’t work out as well for you- you wake up the next day craving that new flat screen TV even more because you dreamt about it all night long- you could always use this step to help you decide whether or not you should actually get it.

Far too many purchases are impulse decisions. While this is fine when it’s a chocolate bar at the supermarket, it becomes a problem for larger purchases. Before you buy something, think about how it will affect you in the future.

How long is it going to last? Is it going to put you in debt? Is the value you will get out of it over its lifetime worth the cost?

These are questions you can use to determine if something is really worth buying.

Create a Budget

Yes I know that this is an obvious one yes but it’s too important not to note down.

On a basic level, a budget is simply a plan for your money. If you know your expected income next month, write that number down. Then start applying that money to different things.

Start with savings and of course loans that you have to pay back then move to basic necessities: housing, food, insurance, utilities, transportation. Finally, apply the rest of your income to other things you need or want.

Start writing down each Purchase you make

No matter how small, whether it’s that 2 piecer at Chicken Inn or a new laptop, so long as it’s costing you money, note it down. Tracking brings awareness to any situation. Use your phone or other device to take spending notes throughout the day. There are Apps  that could help with that or you could go the old school route and simply carry around an pad and pen to jot down your spending.

Do this for a week and see if your spending improves.

Learn to value Savings over Products

Some people are naturally good at saving money and draw enjoyment from growing their wealth. For others, money is something that is spent the moment it reaches their hands, and anything else feels like a wasted opportunity.

If you find yourself in the second group, try to adopt a mentality that values savings over products. Or if you really just have to buy something to make yourself feel better, then start a reward system where you treat yourself every time your savings hit a certain target.

In the end, money invested or money saved will almost always benefit your life more than money spent on products that will wear out or become uninteresting in little to no time at all. Strive to have “saving money” at the top of your joy list.

Start Investing Now

Spending your money wisely isn’t just about avoiding unnecessary purchases – it also requires you to take the money that you save and put it towards things that will help you reach your financial goals. With that in mind, there’s no such thing as starting investing too early or investing too little.

No matter how young (or old) that you are or how little money you have to invest, putting your money into quality companies that will grow in value as time goes on is always a wise use of your income.

Stop trying to Impress other people

The average person spends far too much money merely trying to maintain an image. From fancy gadgets to brand-name clothing, much of what we buy has more to do with impressing others than it does to do with purchasing something that we actually want and enjoy.

However, “Keeping Up With the Kardashians” is an expensive and unnecessary pursuit. Buy the things that you yourself enjoy and don’t fall prey to the feeling that you have to spend money in order to impress other people.

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