If you can’t control your spending habits despite your best efforts to do so, you are in the right place. Bad spending habits can plunge you into debt even if you earn a decent salary. To avoid over-dependence on short-term loans like payday loans and credit cards, you must learn some smart money management tips, and it all starts with saving.
You can never enjoy financial freedom without saving. However, you need to manage your finances accordingly to be able to save. Most importantly, saving isn’t easy. It gets worse if you are a spender so, what should you do?
1. Avoid extended warranties
If you have to spend, the least you should do is ensure you are getting the best value for your money. A spender can save a lot of money by making sure they spend the least amount of money without compromising on value. Many goods are overpriced because of add-ons like extended warranties. Go for standard warranties instead when shopping for household goods, gadgets, etc. since; most people get bored with new purchases in a few months. Furthermore, you aren’t as clumsy as you think unless you have toddlers in the house so, avoid extended warranties and welcome significant savings every year without even changing your spending habits.
2. Save on a daily/weekly basis
The thought of saving when you are a spender is usually far-fetched if you don’t have small manageable goals. You can set your saving challenge starting with small daily or weekly amounts that don’t seem to affect your lifestyle in any way. With time, you can make the goal harder as saving becomes a manageable routine. You can start by saving change daily and then double your savings on a weekly basis. It is easier to save this way than saving a lump sum every month. In fact, spenders don’t have anything left at the end of the month, so this is an effective tip.
3. Work on your patience
Patience isn’t a money management tip; however, it dictates a person’s spending habits to a large extent. One of the key reasons why people overspend or take loans is because they want to buy what they want immediately even when they don’t have money. If you worked on your patience, you would be able to get rid of most, if not all money management problems. For instance, you would never buy anything you can’t afford. You would also be able to build up an adequate reserve capable of meeting emergency expenses and investment needs in the future. Such a reserve would shield you from overreliance on payday loans among other credit facilities which encourage overspending.
4. Focus on transport costs
Expenses on utilities like rent and energy bills tend to be fixed unless you make drastic changes like move houses or invest in cheaper alternatives. Transport is one of those areas you can enjoy significant savings with ease. Most spenders have a huge transport cost so it’s important to pursue cheaper alternatives before finding other avenues to cut expenses. For instance, public transport is always cheaper than using your car or taxi services. You can also use a bicycle which offers added health benefits. Using your car comes with a lot of expenses and inconveniences especially if you live and work in an urban setting.
5. Avoid brands
If you can’t control your spending, you should at least avoid overpriced brands. There are many competing products in every segment that are equally good if not better than overpriced branded products. Knowing this will help you enjoy huge savings even before you get rid of all your bad spending habits.
6. Review your monthly subscriptions
If you tend to overspend every month but don’t seem to understand where your money is going, it’s time to review your monthly subscriptions and cancel the unnecessary ones. Setting automatic payments can be convenient, however, you are prone to overspending on products/services you don’t need any more. You may also be spending on products you can get for free. This applies mostly to internet products/services.
7. Avoid restaurant meals
You can spend 10% or more of your net income on restaurant meals every month if you aren’t careful. Restaurant meals are usually overpriced and unhealthy. This tip will help you save more and boost your health without missing out on anything. If you must eat out, do so occasionally or shop for offers. Implementing this tip can help you get rid of most of your bad spending habits.
Money management is a problem for most people. Spenders have a harder time for obvious reasons. Luckily, making some minor adjustments such as; shopping wisely and practicing patience will go a long way. You should also review existing spending and find better alternatives.
Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.