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So, you want to know how to spend money — you know — like a boss! If you’re struggling with saving money, have bad shopping habits or just want to learn how to spend your money wisely, this post is for you. Just know, while totally possible and easy once you get the hang of it, it takes a little creativity and planning. Here are some tips:
1. Start Saving
Being able to spend money on things you want without breaking the bank starts with having a system of saving some of your money each month. In another one of my posts, I gave you 7 tips on how to live on a tight budget. One of those tips had to do with saving money and how you need to pay yourself first. Give it a read, if you’re not sure what I mean.
But, basically, it’s where you allocate a little money out of each paycheck to put away in a bank account BEFORE you spend any of it, even bills. This amount can be as low as $10 or $20 if that’s all you can afford. It doesn’t matter how much, just make it a habit to keep putting money aside each paycheck into one bank account that you don’t touch (unless there’s an emergency and you absolutely need it).
Now I’m not saying to forget paying your electric bill so you can throw $200 in the bank. Not at all. You absolutely DON’T want to get behind on your bills. What I’m saying is even $10 per paycheck can really help. So, if you get paid once a week that’s $40 a month you’re saving. Doesn’t seem like much, but at the end of the year, you’ll have almost $500. After 5 years, you’ll have $2,500 saved and that’s by just putting in $10 per paycheck.
Imagine if you can afford $20 per paycheck or $30? $2,500 is a nice down payment on a car or vacation.
Now, that’s just coming out of your paycheck. There are other ways you can get money to save.
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For instance, you can:
2. Shop Smart
To shop smart, you need to make a list of ONLY the things you need and take it with you when you go shopping. This will keep you from giving in to those shopping urges. Find discounts and use coupons.
Plan your meals out each week in advance. Then, you can make a grocery list and buy just those items for the week.
We all are guilty of shopping blindly without a list and going home with double what we intended. Planning out your meals ahead of time will give you a huge advantage so you know EXACTLY what you need to buy. Then you can just cross things off on your list as you shop and grab each item.
Here’s some help with planning your meals ahead of time. It’s called $5 Meal Plan and it’s very helpful to give you ideas of different meals with recipes and keep you on track with your spending.
The money you save from your purchases, throw it in your savings account.
You can also:
Join an online shopping site like Ebates where you earn cash back from each of your purchases. You can earn cash back either in-store or shopping online. You can even shop online and then pick up at the store. It’s free to join. Shop at places like Walmart, Amazon, eBay, best buy and more. You can even save on hotels. Once you spend $25 within 90 days, you get a $10 welcome bonus.
Plus, not only will you get money back for shopping, but you can also refer other people to Ebates and earn $25 per person who joins under you and makes their $25 purchase. I absolutely LOVE this site! Go ahead,sign up and make a $25 purchase, receive your $10 welcome bonus and start shopping and referring!
The cash back you get from this site you can throw it in your savings account. You were going to do the shopping anyway, why not get money back on all your purchases? That’s extra money in your bank account ON TOP of the little bit you take out of each paycheck.
3. Use Cash
Credit cards are very tempting and too easy to use. And, they can be really easy to overspend on things since you’re not actually physically handing out cash. Whenever possible, use cash to pay for things.
4. Stop the Mindless Spending
By this, I mean spending you don’t really even think about like interest on credit cards (use cash when possible — interest adds up) and ATM fees. Each time you pull money out of an ATM machine, you’re getting charged a fee of $2.50 or $3.50 just for the convenience. You might even be charged twice — once from the retailer’s machine and once from your bank. That’s almost $7.00 you spend on one transaction.
Take money out of an ATM machine even twice a week and you’re spending an extra $14 you didn’t have too. Here’s what you do — go through your bank’s drive-thru and pull your cash out there (it’s free). Now take that $14 you saved by NOT using an ATM and throw it into your savings account.
5. Identify Your Poor Spending Triggers
Try to figure out the specific things, places or people that trigger you to spend more. Some things that could trigger poor spending are:
- Being out with friends
- Social pressure
- Bad mood
So, let’s go over an example of each of these.
When you have too much leisure time on your hands what do you want to do? You want to alleviate that boredom. Many people go shopping just to get out of the house and fill the time.
What’s the solution? Call a friend to go have coffee with or find a movie instead of browsing the screen. This isn’t to say that you can’t use the Internet or even buy online.
It can be very tempting to see something you want to go on sale. I’m a real sucker for this one. How many times have I gone grocery shopping and grabbed items I hardly ever eat or use because it was buy one get one free. Or I’m out picking up my prescription at Walmart and I see a cute top that’s 20% off. So I grab it.
Sales are great when you’re actually buying something you intended on buying or something you need. But, if you’re simply grabbing stuff that you don’t need or rarely use just because it’s on sale, you’re wasting money that you could be throwing into your savings account.
What’s the solution? Ask yourself if you really need that item and already intended on buying it. Sure, go ahead and splurge every once in a while (like that top for instance), but if you’re doing it all the time, that money spent can really add up and when you have a bunch of things you’re hardly going to use, it’s really not worth the sale.
Being Out with Friends
This one you probably can figure out for yourself. 🙂 You’re out with friends at the shopping mall. They’re making purchases on their credit cards and you don’t want to be left out. So, you pull out your card and buy a few things.
Or you’re out having drinks and you feel obligated to buy your friends some rounds.
What’s the solution? Well, we’re not expecting you to go out and drink water or window shop when all your friends are buying things. But, you also don’t need to rack up the debt either or dip into your budget simply because want to fit in with the crowd. So, here’s what you do:
Before you go out with your friends, sit down and plan out exactly how much you can afford to spend. Take that amount with you in cash (leave the credit card at home) and explain your budget situation to your friends ahead of time. Let them know you’re trying to save money and get a hold on your spending.
Trust me, you didn’t leave peer pressure behind you in high school. People are spending more these days just to keep up with everyone else whether its a new wardrobe or car. They want to impress, so they spend. Don’t believe me? The Journal of Marketing Research published a study that found social influence causes individuals to spend more.
The study focused on purchases that were made on flights. The study found that passengers who were sitting next to another person who bought something, were 30 percent more likely to also buy something.
What’s the solution? Think before you act — do you really need to impress other people? Do you really need that item you’re buying?
When you’re in a bad mood, you want to make yourself feel better and buying something gives you immediate satisfaction. You instantly feel better, but it’s likely that within the hour you’ll start feeling guilty or shame from blowing your budget. Puts you right back into a bad mood.
What’s the solution? Instead of binge shopping to feel better, try an activity you enjoy that costs nothing like listening to music, doing yoga, petting your dog, etc.
6. Go Generic With Grocery Shopping
Another spending trigger is thinking you’re only going to get top quality if you buy by brand names. The real difference between brand name products and generic products is the price. I’ve actually done a few comparisons myself and found that many of the generic brands have the EXACT same ingredients as the top brands.
So, instead of paying the extra amount for brand names (and it can add up), try to shop generic as much as you can. You’re getting the same product, just not the pretty packaging.
7. Pack your Breakfast and Lunch
Instead of going out and spending money every day on breakfast, coffee and lunch, pack it and bring it with you. A typical “fast-food” breakfast and coffee will cost you around $8 to $10. Lunch is usually around the same, depending on what you get. Add that up and you’re spending $36 a day to eat at work (or school). In a five day work-week, that’s $180! Whoa! Forget that hot mess.
When you plan your grocery list ahead of time, plan in your packaged breakfasts and lunches. Buy some cold meats, bread, fruit, bagels, etc. Things that are easy to pack and will fill you up. Try the $5 Meal Plan for ideas. It will save you a lot of money that you can (you know what I’m going to say) — throw in your savings account.
8. Set Up a Budget
To get an idea of how to spend money wisely, you have to create a budget for yourself. I go over this in this post, but basically, you’re going to estimate how much you spend on expenses like:
- Utility bills
It’s not hard to come up with a budget (it’s harder to stick to it). You can use a spreadsheet or online software to set your budget up. You can also go the traditional pen and paper route.
Here are some cute printables you can use if you’re going to write your budget down.
9. Realize What is Worth Spending Money On
Now there are certain things that are worth spending money on and are important. Some of these things are:
You sleep a third of your life. Your body needs sleep to stay healthy. So, if you’re thinking about buying a mattress, it’s okay to spend the extra money on making yourself as completely comfortable as you can. If you need a new mattress, go ahead and make that investment. It’s worth it.
We have to eat. But, what you put into your body can affect how you feel and look. It can also affect your health, mood and energy. So, go ahead and invest a little more in organic foods that are natural and free of chemicals.
Also, important to our health is the cleanliness of our environment. You don’t want germs and bacteria lurking all around your home. It’s unhealthy and unsanitary. And, be careful when choosing the “bargain brand” products.
I know I said earlier to go generic, but when it comes to cleaning supplies, you want to be sure their powerful and effective. The cheaper cleaning products, I’ve noticed don’t seem to do as good of a job as the better quality products. And, you want to be sure you’re getting rid of those harmful to your health critters.
When you’re constantly learning, you’re bettering yourself. This doesn’t necessarily have to mean college. By education, I’m referring to anything that you can learn to enhance your skills. For instance, if you’re interested in learning more about blogging like this and making money, here’s a post that will help you do that.
Your health is another thing you should invest in. Paying for an annual doctor’s visit, medications or mental health are important. Yoga, therapy, gym, etc. < These all contribute to good health.
So, there you have it. Now you know how to spend money like a boss. If this post helps you in some way, I’d really appreciate a share. 🙂
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