You have made a budget – that’s great, however while a budget can make sure you don’t spend more money that you have, it does not keep your spending to a minimum and help you save money.
A great approach to keeping spending to a minimum is to view saving money as a challenge, mission or goal. This will result in you getting a great deal of satisfaction and joy when you manage to save up to buy an item you really need, and then buy it at a good price, avoiding debt and the costs, problems and pressure this can bring. Savings can be used to help you manage difficult times or unexpected costs. This same approach should be used with larger items like your mortgage, try and save a thousand or two and then make a lump sum repayment providing you are not penalised or charged to do so, otherwise put it aside and pay it off when you refinance.
When saving for an item, while you have the overall goal or target, set yourself mini goals or smaller milestones. Celebrate or congratulate yourself for every hundred / thousand dollars you save. Use this approach if you are saving the bond or deposit to get your own home, or to save for a car, fridge or lounge suite, it does matter what the item is.
Try and avoid eftpos or debit cards these make it too easy to spend money. Use cash, yes I know it’s old fashion, but by using cash you will be more aware of what you spending. Challenge yourself every-time you open your purse or wallet, do I really need this item. Another good technique is to divide your pay by the number of hours you work to establish your hourly rate and before you buy anything work out how many hours work that equates to. It’s the old story money is much easier to spend than to earn.
Don’t buy items from a retailer just because you get points or a loyality bonus. If you need an items shop around for the best deal you can find, make your money stretch as far as you can. Don’t go window shopping or browsing through shops or online websites, as you will inevitably find something you want.
Avoid paying people to do something you can do yourself or easily learn to do. Sometimes it is a good idea to help a friend occasionally that way you can call in the favour, when you have something that needs doing. If you don’t have the tools for the job consider hiring them as the chance are you may never use the item again, in which cases it is more cost effective to hire.
Do not gamble money you can not afford to lose. In terms of entertainment for you, your partner or the kids look for cheap or free things you can do. Look at the events that are on in your area. Go to the park, for a walk or bike ride, play some games at home, or invite some friends over.
The reasons people generally spend money
- To ensure they have the basis essentials
- To enjoy themselves
- To try and win more money
- To give them themselves a lift, a high or excitement
- To avoid saying no to a salesperson
- To impress others
- To keep up with others
- They think the need the item, but generally they don’t
Often you will see something you would like to buy, and you may even have the money to buy it, or the financial credit to enable you to acquire the item. However this is not a good enough reason. Before making a purchase ask yourself the following
- Do I really really need this, or can I get by without it.
- If I really need it, what is the best brand brand to buy, taking into account, price, quality, your budget etc
- What is the most economical way of buying the item. Check prices elsewhere, could you buy second-hand, Can you hold off a little longer and save more money / buy it without going into debt.
Finally we all need to treat ourselves on special occasions, as long as these times are the exception and not the norm.