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How to spend your money

This article was obtained from a PLR website. I have decided to share it with you. As usual the advice may not be applicable to your personal circumstances.

Improving how to spend your money

It is important to be aware of where your money goes in order to correct any bad habits

Money may not be with you all throughout the year. There are downs and ups when we talk about the financial resources and income of an individual or family. In dealing with financial difficulties, there is a need to have budgeting techniques as early as possible. There is a need for us on how to master the art of stretching the capacity of our available money. 

It is but normal to commit errors especially when you are not yet used to doing things your job calls for you to. But, do not make those mistakes that you would surely regret in the long run. As soon as you could, you have to develop a great way of managing to budget your money. There are some tips you could remind yourself of. These would be points you could use in making or establishing good means to improve the way you budget your money.

  • Make a list of your unwanted budgeting habits. This includes all those you think of being not useful or helpful for you and your financial needs and financial security.
  • You plan on what to do in order to take the first steps in changing your old habits or acts in which they made your budget method a failure.
  • Manage your income and the amount of money you spend by preparing a sort of tally sheet of such information.
  • Prepare your spend plan. This must include your foreseen expenditures.
  • Collect receipts and note bigger amount spent 
  • Limit spending by looking for some alternatives to it
  • As much as possible do not use many credit card or checks.

Those above-mentioned points are really a great reminder for you. If followed, you would clearly see the improvement in your budget techniques. It would surely result to better financial management capacities for you. 

When this is achieved, you would definitely live a more satisfactory life. The right way of how you budget what you need as a winning one in the field of financing one’s self.

It is important that you set personal goals that are your own and not be influenced by how others are living. People who have no goals or ambitions just fritter their money away and are left at the mercy of life’s misfortunes for stuff happens such as a car breakdown, dental emergency, house repairs, or some appliance such as the toaster, electric jug, dryer, or washing machine breaking down. An individual who manages their money well will be able to pay for these emergencies without using credit of some kind.

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The advantages of saving money

INTRODUCTION

If ever there was a habit which needs to be acquired from a young age it is the habit of saving money. It is a habit that will help one achieve financial goals. There are so many advantages of saving money as compared to just spending everything you make and if you are able to save something each week then you will be better off financially in the long-term.

The advantages of saving money

The ability to save for all the things you need will put you in a much better financial situation in the long-term. It will mean you pay less for whatever you are buying and places you in a less stressful situation. Mind you some borrowers just don’t care that they are in debt as long as they are able to pay it back. 

The crunch comes when there is a job loss or some health issue arises and there is no money in the kitty to pay the bills. 

A person who has set up their finances properly will factor in these types of emergencies in making their financial plan. 

Saving money is a no-brainer; here are the five main reasons for not borrowing.

1 NO DEBT

Borrowing money for the things you need or want puts you in debt. It means that you are indebted to someone else. Sooner or later it all has to be paid back along with the interest. The debt is not going away until it is paid off so there is no point in burying your head in the sand if you are indebted to your creditors. Creditors have every right to expect repayment of their money whether they are the bank or other lending institution or a family member.

2 COST OF BORROWING

There is a cost attached to borrowing money and that cost is interest which is sometimes referred to as “Dead Money.” Paying interest on the stuff you buy on credit adds to the cost of the item. The habit of purchasing goods on credit adds up to a massive amount over the course of your lifetime. That interest money could have been used to build a nest egg. Commercial debt is the worst type of credit spending because the item which has been bought on credit loses its value as time goes by. Another name for commercial debt is dumb debt. 

3 READY MONEY FOR EMERGENCIES

Emergencies crop up from time to time. The car breaks down, the washing machine needs repairing, you suffer a tooth ache and need to go to the dentist, you need a new pair of spectacles. There could be anyone for a number of reasons for financial emergency. If you have money set aside for these then you can tend to these emergencies without worrying about whether you have the money to pay for them. Every responsible person has an emergency fund on hand to cushion them against financial shocks which can occur from time to time.

4 A NEST EGG FOR THE FUTURE

Saving money means you are able to build up a nest egg for the future. If you are a responsible person you will have a retirement scheme of some kind where a portion of your pay goes into the fund. In New Zealand it is called Kiwisaver. I can not stress enough how important it is to be enrolled in Kiwisaver if you are from New Zealand. The government incentives make this scheme a no-brainer. Your country will have its own scheme with it’s own benefits.

5 TAKE ADVANTAGE OF SPECIALS

If you have no money then you will not be able to take advantage of specials. That does not mean you should spend money on something for no other reason than it is special. Your own common sense and self control should be employed here.

6 A DOLLAR SAVED IS A DOLLAR MADE

There is a saying that a dollar saved is a dollar made. The truth is a dollar saved is better than a dollar made because you do not pay tax on a dollar saved which is not the case when you make a dollar. Every dollar which you save can be working hard for you in whatever investment you place it in.

A competent money manager will not have any room in their vocabulary for such words as debt, credit, credit card, loan, lay-by, or hire purchase. In fact these are all dirty words to the person who wants to get financially ahead. 

Having said all of this, there can be times when borrowing money can be worthwhile. 

But…

And it is very big but. 

You have to be absolutely sure that the payoff is worth your while.

Take a student loan for example; You need to be absolutely sure that the type of job which the course qualifications assist you with is something that you really want to do, otherwise the whole course will be a waste of time and money.

ABOUT THIS ARTICLE

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LIVING A BALANCED LIFE

How to live a balanced life

Learning how to manage your money and being smart with your resources will take you a long way in life but it is possible to go to extremes. A lot of people are up to debt to their eyeballs and they need assistance to break free of the borrowing habit which makes them a slave to their lenders. It is those people who are so tight with their money that they have lost all sense of priorities that this article is aimed at but even if you are not one of those people, you as we all are have room for improvement when it comes to how we priorities our spending or rather what we do not spend our money on.

It is what we Sacrifice that really determines what takes priority in our lives. There are moments in life which are just priceless such as spending time with your kids. How much value would you place on having an ice cream with your kid?

What I am saying is that, it is all very well being tight with your money but if it takes away what life should really be about then you need to reassess your priorities.

It is important that you not try to live a champagne lifestyle on a lemonade budget because you will end up working all the time without enjoying what you have.

Your age, marital status, and work situation will all determine your priorities in life as will your financial situation.

If you are young, you have more time to recover from financial mishaps, more so if you are single therefore are able to take more risks.

Someone in retirement may be advised to invested their money in something which can quickly be converted back into cash.

It is really up to each an every individual or family to prioritise what is important to them and decide what is worth making a sacrifice for.

I remember years ago, a man close to retirement age told me that his brother who was living with their elderly parents had 25k saved up in British pounds and told me his brother doesn’t enjoy his money. He was saying that he lived a sheltered life and never went anywhere.

Saving for your retirement is a good goal to have but you need to make the most of your stage of life. It is important to frame your life around your own circumstances, priorities, and your income level but at the same time not to live beyond your means.  You do not want to get to the end of your life thinking, “I wish I had done this or that”. If you love sports and have some talent in anything and have a dream to become an international sports person, musician or whatever then you may be advised to follow your passion before it is too late. You don’t want to get to the end of your life and say, “If only”.

It is a mistake to make money your number one goal at the exclusion of everything else because at the end of the day, life is more than money. What I am saying is that it is important to get your priorities in order but it is up to you to decide what is important to you. It’s your life, ENJOY IT!

www.robertastewart.com