You earn money to live. You do not live to earn money. However, the cost of living is going up and ignoring it will not make it go away. Plain and simple.
So, some simple ways you can be smart with your money are
Keep Track
You can only be smart with your money if you have an accurate picture of your situation. So, start by tracking your finances. What is your income? What are you spending this income on? Is the money you make reducing the stresses of everyday living? Or are you living from payment to payment?
Have a clear picture of where you are with money by keeping records. Save receipts or write down your purchases as you make them. Keep track of every expense and income; no matter how small. The records you keep each month will give you a good idea of your financial situation and will give you a heads-up of where you are over-spending or under-earning.
Have a Budget
This is a good way to keep an eye on future income and future expenses. It is a simple tool to help you manage money. As long as you record all the expected money and all the expected future expenses because a good budget should include all your sources of income and all your expenses. It should, also, be one that will have expected expenses lower than the expected income. If not, it is a clear indication that you are living above your means and need to make changes.
You can make changes, category by category. Food, clothing, entertainment, etc. Look at each category and find the categories with the highest monthly amounts or the amounts that have become surprisingly high. The latter which may be good targets for saving money. Once you’ve gone through the categories and have a fair idea on where the changes should be; give yourself weekly or monthly limits. And make sure the total expense budget is smaller than your income for that period.
Develop some shopping prowess
Planning trips in advance is a good start because just going shopping on the spur of the moment will make you spend more than you should. When you are in the confines of your home or office write down what you need to buy. And if possible make a preliminary trip to the places you want to shop from. Or browse the brochures and take note of the prices. Not just from one shop but from several.
Armed with your knowledge and a list, go and do the shopping. Carry only the money that you have calculated you will need. Do not take more cash with you than you need. If you don’t have the extra money, you can’t spend it.
This advance planning, you will find, will save you time. And the less time you take in the shop the less money you will spend.
For big value items (or small ) if you have some doubts about your preliminary choice, ask for advice. However, you do not have to take the advice from shop employees. Their job is to sell. So, politely listen to their response but ignore any advice on purchasing decisions. That decision is yours. If you cannot decide, leave and go and have another think.
Do Not:
1. Be forced to buy things that you have doubts about.
2. Buy an alternate because as good as planning a purchase in advance is a good idea, buying something other than what you budgeted for is a terrible one.
3. Accept to buy a different make or model that you did not plan on purchasing.
4. Run out and withdraw more money from an ATM because you are told that the price you saw did not include taxes. If the money you have cannot cover the tax: you can’t afford it. Leave the purchase for another time.
5. Buy something because you want to impress. If so, you’ll likely end up spending too much on stuff to impress the staff.
And to add on to the above
Do Not:
6. Buy something on the basis of an advertisement from television or an influencer’s blog or tweet.
7. Be fooled by marketing. Outside influences are a huge factor affecting what we spend our money on. Be vigilant and try to be aware of all the reasons you’re drawn to a product.
8. Be fooled by packaging. They are designed to encourage you to spend money and will not provide an accurate portrayal of your options.
9. Buy something just because the price has been reduced. If you were not planning to buy it; do not. Don’t buy what you did not plan for or do not need.
10. Be tempted by the ‘buy now, pay later’ option. Calculate the total amount you will actually spend after the monthly payments are down with. Especially if you’re taking out a loan to make the purchase.
