Money can be a difficult thing to deal with, especially if you are an impulse buyer. All those who fall prey to impulse purchases can relate to the dilemma of figuring out what to spend and what to save. Impulse buying is frequent among individuals who are looking to satisfy their wants beyond just basic needs. Segregating the two and identifying when to spend on luxuries has become important to survive recent times when money is continuously losing value. Here, a few basic tips regarding what to spend and what to save as part of your routine personal bookkeeping process will be identified.
The first and foremost step is to set your priorities right. Here, priorities refer to choosing what you need over what you’d be interested in buying for the sake of luxury spending. For instance, a top priority could be spending money on basic needs such as food and clothing. Remember, food and clothing can fall into the categories of either basic and luxury. Moreover, it is always good to pay your bills first and then decide on your expenditures for the month. Here is a systematic way to go about doing it: pay your bills, spend on basic needs, spend on what you can’t live without, keep some money away for savings, and whatever you are left with can then be used for luxury spending of any sort. Make sure to follow this order religiously, and you will not run out of cash as and when required.
Keep an Emergency Fund
Another tip regarding what to spend and what to save has to do with keeping money aside as savings every month. It is essential to keep an emergency fund where you can stack up all of your savings when running out of cash. This fund is something you may fall back on in times of a job loss, insufficient cash to fulfill basic needs, medical conditions where you need to purchase the necessary medications, and also during the last few days of the month when essentially every one of us is out of cash for that special take-out extra pepperoni pizza on a cheat day.
Don’t Listen to your Impulse
Conquer the struggle of what to spend and what to save by avoiding impulse buying. We often tend to pick up items while grocery shopping that is too fancy and inviting or, in other cases, we are just attracted to it purely because of a promotion going onto it. The overwhelming excitement of a product wears off eventually, and then you see no point in making such a purchase. Hence, it is better to stick only to the grocery list items and not deviate from them unless necessary. Caution! Necessary here doesn’t equate to your impulse.
Here, you are being asked to save a little, and how so? Let’s identify a few ways how you may be able to save a few bucks from your routine expenditures.
- Try to use discounts and loyalty cards in avenues that offer similar options.
- Buy your monthly/weekly snacks when you plan your routine grocery visit. Do not buy snacks every day.
- Once every three months, plan a garage sale. You can get rid of those impulse buys this way.
- Try to opt for generic but healthy items rather than overspending on brands.
- If you want books, use the nearest library rather than buying them.
- Use the internet for essentials such as watching movies, listening to music, and binge-watching your favorite series rather than going out and spending a lot on entertainment.
Make a Budget and Follow it
Lastly, another useful tip has to do with drawing up a realistic budget and sticking to it. A budget will enable you to list your monthly expenses and income. Simultaneously, you may also draw up a list of your needs and wants. Once the allocation is complete on each of the needed items, you will estimate how much money you are left with to satisfy your wants. However, this extra money must not be entirely spent on that particular want. A portion of it must go into the emergency fund and savings under all circumstances.