ways to spend money wisely essay

How to Spend Money Wisely: 12 Hacks To Improve Your Habits

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“What’s the first thing that comes to mind when thinking of how you can improve your financial situation?”

Many people would say “spend less money.”

One way to do this is by buying something used. In fact, a study found that Americans buy 10% more new items than they did in 2008 because we have so many promotional offers available. Not only should you be trying to save some money on your purchases, but also cut all kinds of other expenses from your lifestyle and keep them at a minimum.

Usually, people spend more money than they need.

This can lead them to have less money saved or be able to afford the things they want.

However, with a few simple changes in your spending habits, you will be able to make more of what you earn and feel more satisfied.

In today’s world, it is easy to be overwhelmed by the amount of information available on how you should spend your money.

With more and more people struggling with their finances, I would like to share a few hacks that have helped me spend money wisely and simplify my life.

Also, I am going to include some simple money saving tips on how to spend less money! Do not get duped into buying things you did not plan on purchasing or spending more money than you needed to.

How to Spend Money Wisely

As you can see shortly, there are many ways to spend money wisely. Whether it be through saving, investing, or taking care of your health; with this article as a guide, you won’t have to worry about your money any longer.

This is meant to inspire people on how they can better manage their finances and live more efficiently, while still being able to get the things that they want.

Spending money wisely is a way of life, but it can be tough to know where exactly you should start.

Luckily for you, we will break down ten hacks for you to follow so that your money does not go to waste.

1. Pay Yourself First

You are probably wondering, why is saving money about how to spend money.

The first thing you should do to spend money wisely is to pay yourself first.

This could be saving for the future with an emergency fund, which can be used in case of emergencies or downturns in your financial situation. This can be done by contributing to a high-interest savings account and saving up to $1,000 or more for emergencies.

Or choose one of our money saving challenges to match your financial goals.

2. Take Care of You

You need to take care of your health, as that will improve the quality and longevity of your life.

Making wise choices on choosing quality food and healthcare may cost more money upfront, but in the long run, it will save you money on huge medical expenses.

You spend your money wisely by taking care of your health. Money spent on a gym membership, healthy food, and other medical expenses can save you even more money in the long run.

Many people love the idea of time freedom for this reason.

3. Invest in Your Future

One way to spend money wisely is by investing in your future. This might be done through a 401(k) or Roth IRA, which lets you invest pre-tax dollars and then withdraw them tax-free once you retire.

This can be a great way to save on taxes, but the money needs to stay invested for at least five years before you’re able to withdraw it without a penalty.

4. Choose Experiences

We live in a society that prizes material purchases and spending. Remember to prioritize experiences by getting outside. Not just for your health, but also on the mental and emotional levels, as well as the personal and even family levels.

Also, a plethora of benefits to spending money on experiences, not all materialism related.

Try to spend less on electronics and materialistic items that fill your home and more on experiences like travel or going out with friends.

This is a great way to spend time with your family and friends instead of buying things for them.

Related Reading: Overcome Gift Regret: Experience Gift Ideas That Do Not Go To Waste

5. Set Goals

Many of us, regardless of financial status, know that if we want to live on the right path without having our finances stress us out, then there are good habits to be followed.

Think about how much money you want to make in the next five years or ten years and make up how to get there.

Now, you need to line up your spending to make that happen.

Not sure how to set goals? Start here with making smart financial goals .

The next hack is to make a budget and stick to it, which will help you spend your money wisely by only spending what you have available in each category.

A budgeting strategy helps you develop better financial skills. These strategies are practiced in order to help prevent overspending and create a set spending plan for you.

Create a budget that includes all your expenses and then each time you get paid, put a little bit of your paycheck into each category.

7. Evaluate Your Spending

Oftentimes, we find ourselves buying items that are not necessary and just a waste of money. This hack is to evaluate what you’re spending your money on and think about whether or not you want to continue this habit.

For every purchase ask yourself if the item is worth it and what will happen if you don’t buy it.

By completing a no spend challenge , you will be amazed at the things you find out are not worth spending the money on.

8. Likeminded People

Next, you should try to spend less time with people who are going to make you feel bad about yourself.

This is a hard one but just think of the good things that will happen when you stop hanging out with people who make you feel bad.

If you are constantly around people you need to learn how to not spend money, then you will be battling upstream battle. Look for those who have the same mindset and are determined to spend money wisely.

9. Spend on Quality Over Quantity

The best way to buy quality items is to spend more money on them. Buying cheaper items has its risks, but over time it will lead to dissatisfaction with the product and waste of money.

If possible try to spend money on things that will last a long time and not just stuff like food or rent.

This concept of quality of quantity is not difficult to understand. For example, instead of owning 10 pairs of jeans that you think you need, you spend money on the two pairs of quality jeans that you love.

Because items are so cheap to pick up, it is easy to quickly fill our homes with quantity and excess stuff (plus we are spending more in the process). Instead, spend a little more and buy less of what you truly need or want.

10. Eat at Home

One way to save money is by cooking more at home and not going out to eat. You can also cut down on the amount of food you purchase, which will help you save a ton of money in the long run.

Instead of buying food that will go bad quickly or ruin your health, buy more expensive food. This way you are spending less money on the product but it is going to last longer and be better for you.

By spending money wisely, you must learn how to spend less money on food.

11. Use Tax-Advantaged Accounts

Specifically, I am talking about FSA or HSA, or dependent care FSA. This is when you set aside money each year for these purposes. Money goes into these accounts tax-free, so you are lowering your taxable income.

On how to spend FSA money, you must have the proper documentation on your plan. The same is true for how to spend HSA money.

The limits change each year on how much you can contribute to each of these plans, but the maximum you can spend tax-free is over $20,000 for a family.

This is a great trick to spend money wisely and lower the amount you owe in taxes. Just make sure to spend the amounts in the FSA each year!

12. Spend on things that add happiness to life

Personally, I have a hard time spending money. Period. This is something I am working on as we progress through our financial journey. Now, I look to spend money on ways that will improve our life or bring smiles to our faces.

Spend on things that add happiness to your life.

For example, if you’re happy with the new shoes you’ve just bought, then it’s worth spending money on them! If you love to travel, spend on travel. If you like reading fiction novels, spend on fiction novels.

Spend your money on things you enjoy and make the most of the disposable income you have.

How to Spend Money to Make Money

One of the best ways to make money is to give back. However, it takes some money to make money, which is typically frustrating to those who constantly want to make more money per year.

By selling a product or service, you are supplying them with your knowledge, advice, and understanding. Another way is through investments. Investing, while not always profitable, has companies that adhere to companies of all kinds.

One of the best ways to spend money wisely is to invest in ways to make money.

There are plenty of ways to make money and start your own business.

Here is a great book to open you up to the idea of starting your own business and the freedom with money it can bring.

Here are great ways to make money on the side:

• Sell printables and make passive income!
• Become a virtual assistant and make your own schedule.
• Learn to get weekly paychecks when investing in the stock market .
• Earn money with freelance writing on the side.
• Walk dogs with Rover and get paid cash.
• Drive for any of these companies and make money – Instacart , DoorDash , or Postmates .
• Start a bookkeeping business on your terms.
• Sell Earn easy money with flipping items Find great success with this Flea Market Flipper training.
• Have kids? Then, teach them to make money with Flea Market Flippers for Kids .

It is possible to make more money on your business than you make more money in your current job or career.

How to Spend Less Money

Many of us spend too much on material items that are not actively used. This creates a situation where we have to make more purchases in order to get the same level of happiness.

The first step towards becoming frugal is deciding what you want out of your possessions, and then only buying those things which will provide you with this goal.

Here are 32 easy ways to do that!

• Shop at Discount Stores: You don’t have to go all out with your shopping if you’re looking for a way to save some money. There are plenty of stores that offer great deals and you can still find some really cute clothes.
• Find Online Deals : You can find deals online for just about anything. This is a great way to get the deals that you might not know about. There are so many websites out there dedicated to helping you find the best deals and coupons.
• Save Money on Your Cell Phone Bill: Just because the cell phone companies want to charge an arm and a leg for service doesn’t mean you have to. There are plenty of options out there where you can find great deals on your cell phone bill without having to break the bank.
• Call and Cancel Unnecessary Services: Do you really need to subscribe to cable? How about getting rid of your gym membership because you know that all the exercise won’t do anything for your weight. The truth is you don’t need a lot of these things that are costing you money. Also, try a free service like Trim or Billshark .
• Buy Generic Items: Do your shopping at the grocery store and buy generic items instead of brand names for most of your purchases.
• Buy in Bulk: Buy items like toilet paper, cleaning supplies, and other things in bulk to save on the cost of each individual item. This is more so for families who can buy food in bulk.
• Start Couponing: This is a great way to save money. I know it’s not the most enticing offer, but if you’re looking to save money then coupons can be your best friend. You can go online and find coupons for items that are on sale at your favorite store or you can get them in the Sunday paper.
• Use Public Transportation: This is a great way to save on gas and wear and tear on your car.
• Get Rid of the Car: If you live in an urban area, it might be worth getting rid of the car and using public transportation or just walking instead. Or become a single-car family.
• Carpooling: One of the biggest hacks that many people are unaware of is carpooling- which can save up to $1,000 per year.
• Rent Things: Whether it is a video, movie, or power tools to complete a project, renting will save you money.
• Use Less Electricity: Turning off lights and other electronics when they are not in use can really help!
• Eat Spaghetti : Eating pasta saves money and reduces your grocery bill.
• Use the Library: If you like to read, the library might be another alternative to buying books.
• Borrow Books: Borrowing books from the library or your friends is a great way to read for free!
• Use Online Promo Codes: Using promo codes or coupon codes on all of your online purchases will make a huge difference. Here is a great place to find promo codes and get money back on your purchases.
• Eat Out Less Often: Eating out less can save money!
• Eat Less Meat: Eating less meat will save on your grocery bill! There are so many wonderful delish meals made with beans!
• Buy Used: If you must buy something but don’t want to spend much, consider buying used versions of the items you need. Buying used products will save money and help the environment.
• Share with Friends: Sharing your belongings, like clothes or toys, can save you money.
• Ask for Help: When someone offers to help you do something it’s only polite to take them up on it.
• Find Used Clothing: Buying clothing used can save you a lot of money and help the environment!
• Downsize Your Hobby: It’s important to live within your means. If you have an expensive hobby it may be time to scale back on the expense or find a cheaper one.
• Need vs Want: Try not to spend money on things that are “needed” but not “wanted.”
• Avoid Impulse Spending: Try to plan before you buy anything- think about what you need, the price of items, and if it is worth buying.
• Plan Free Activities: Plan outings with friends and family, rather than going to the movies or restaurants alone.
• Plan For Expensive Times: Give your friends a heads up before you go out on an expensive outing so they know it’s coming. They may be able to help cover the cost or provide a cheaper alternative. This will help everyone’s budget.
• Do Your Research: Research all of your options before you make any purchase- this will allow you to get the best bang for your buck and find the best deals.
• Bartering : If you must buy something, but you don’t want to spend much money on it-consider bartering with someone or buying used items instead of new ones (e.g., clothes, furniture).
• Know-How You Spend Money: Keep a budget to track your spending and be aware of how much money you have left at the end of the day or week so you can plan accordingly.
• Negotiate on Price: If you plan to buy something, don’t tell the retailer how much money you have until after they give their price- this can help save money and time by eliminating any final price negotiations.
• Think Before You Spend: Put some thought into your purchases before you make them- this will help you make sure you really want to spend money.

How Much Money Should you Spend?

There is a lot of conflicting information on how much money should be allocated to needs vs. wants, but this takes into account what percentage of take-home pay should be spent on necessities.

Here is the Cents Plan Formula we Use at Money Bliss:

• 50% to Basic Expenses
• 20% to Savings
• 10% to Giving
• 20% to Fun Spending

So, the average person should spend 50% of their take-home pay towards needs. That means you must spend your money wisely.

Keep a list of what you spend and how much it cost.

You should have some idea of how much money you are able to spend on what. This will help you decide whether it is worth buying a thing or not before purchasing it.

Use the list to see where you can make adjustments, for example spending more time with your family or finding fun things to do with no money .

Ready to Start Spending Money Wisely?

Spending money wisely can seem complicated at times.

The key to using money wisely is understanding how you spend your cash . Spending tends to happen automatically, which can lead people down the path of overspending and debt if not monitored closely.

The affordability of happiness and satisfaction depends intensely on the money we have.

The activities we could do, and expenses we could cut out, can be often atrocious and insufficient for our expectations.

Extreme dissatisfaction and the whole time earning less than we would desire, we may feel that we need to know how to spend money wisely.

The vital hacks elaborated in this post will help to understand caring for a budget, and changing our habits to spend more wisely.

When spending money wisely, people should be aware of their habits so they can change them in order to save more and spend less on things that do not bring happiness or benefit the person’s life.

If you want to save money, spend it on something that will make your life better or more enjoyable.

Know someone else that needs this, too? Then, please share!!

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

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Top Tips for Spending and Managing Money Wisely

You don't have to be a personal finance expert to be good with money. Anyone can take steps to develop good money habits and achieve greater financial flexibility and freedom! It all starts with understanding how to spend money wisely and how to manage your money effectively.

What Does it Mean to Spend and Manage Your Money Wisely?

Spending wisely is more than just keeping track of your bills and having a good credit report. Spending your money wisely is a way of life! Spending less than your income while continuing to pay your bills on time and in full allows you to save for future needs. ​Aligning your spending habits with what matters most to you will help you reach your biggest money goals.

Helpful Tips for You

Are you ready to get started on your journey to saving money and spending money wisely? Here are some helpful tips to consider:

• Track your spending—every dollar! Before you can manage your money wisely, you need to understand where your money goes each month. That's why tracking your spending is so important! Save your receipts and write each purchase in a notebook. You can also use a digital tool like Money Management to track and categorize your spending. Money Management will give you a very clear picture of your spending habits, which you can use to create an accurate monthly budget .
• Look for expenses to adjust, reduce or eliminate As you evaluate your spending habits, identify room for change. Some questions you may want to ask yourself include:
• Do your purchasing habits match your priorities and financial goals?
• Which categories could you trim to save more money?

You can save money by listing your expenses in order of importance from "must-haves" like living expenses to "nice-to-haves" like new shoes and clothes.

• ​​​​Give your money a purpose After you pay bills, if you don't have specific goals for your leftover income, you might end up spending the funds you have leftover at the end of the month rather than saving them. But by giving your money a dedicated purpose, you can use it to help you live the life you want to live! What goals do you have for your money? It could be boosting your emergency fund, upgrading your car, paying for a child's education, taking a dream vacation or even donating to the causes you care about. Once you have enough money saved to start putting it towards certain goals, open separate  savings accounts and name them for each goal. These savings accounts will help you establish a plan for your extra money, including any additional income you receive through raises, bonuses or your tax refund.
• Stay flexible Learning to develop a financially savvy plan to spend and manage money wisely takes practice. When you're first getting started, you'll probably need to adjust your budget and spending habits so that you can meet your goals. Stay flexible and try to make money management part of your daily routine—it's worth it!​

For more tips on the road to financial independence and how to spend money wisely, view our Spend & Mange Wisely Brochure here .

How We at Wright-Patt Credit Union Can Help

At WPCU, we want to help you succeed in your journey to spending wisely and give you the tools you need to spend money wisely. We have a variety of helpful tools to make the process easier, including budgeting worksheets and spreadsheets , spending tips and interactive learning modules for spending and managing your money. ​

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Spending Money Wisely

Author: Financial Success | Image: Financial Success

Figure out your budget

Making a budget can seem like a time-consuming thing to do, but it is one of the most important steps in order to ensure that you are financially organized. Creating a budget is going to allow you to track your spending, so you know exactly what you are spending your money on, and from there, you are going to be able to become more successful when it comes to achieving your financial goals. The 3 keys to creating a successful budget are tracking your spending, paying off major bills first, and then creating a spending plan.

There are many easy ways to start creating your budget, including

• An Excel Spreadsheet
• CashCourse Budget Wizard
• Mint: Personal Finance & Money (In the App Store)
• Template on the Office of Student Financial Success website

What creating a budget is going to do is help you see if you are overspending (spending>income) or if you are underspending (spending<income). If you figure out that you are overspending, then you need to decide to either reduce your spending or find an additional source of income to ensure that you are not going over budget.

Decide what is a need and what is a want

Deciding between a need and a want is an extremely important task when it comes to saving money, especially as a college student where the money is often limited. It can be very hard to decide between the two, especially when something like the new iPhone comes out or one of your friends asks you to go out to eat. However, figuring out what is a need or a want is the key to spending money wisely and sticking to your budget.

What are examples of Needs?

• Housing, Mortgage Payments, and Utilities
• Loan Payments
• University Fees
• Transportation
• Food (Groceries)

What are examples of Wants?

• Sources of Entertainment
• Memberships
• Brand New Clothes
• Dining Out/Drinking at the bars
• New Electronics

The needs and wants may differ between people depending on certain aspects of their life. While cutting out wants is important to maintaining a successful budget, it does not mean that you should cut out all the wants completely. One thing that is recommended when it comes to keeping track of needs and wants is to use the 50/30/20 rule. This means that 50% of your income should be devoted to paying for needs, 30% of your income can go to buying your wants, and the last 20% should be added to your savings.

Plug the leaks in your spending

Small spendings can add up and end up having a huge impact on the success of your budget and can often lead to you thinking, “where did all of my money go.” Stopping these leaks in your spending will ensure that you meet the goals that you set in your budget and that you are spending your money wisely.

Some of the ways to plug these spending leaks include

• Carry around a reusable water bottle to cut out needless spending on things to drink
• When going shopping, make a list and stick to it—no impulse buying.
• Carry cash instead of credit cards to ensure that you are only spending what you can afford
• Get rid of subscriptions that you don’t use anymore or are just unnecessary.
• Pack snacks from home to avoid higher prices at vending machines or gas stations
• Use subscriptions to streaming services such as Netflix or Hulu instead of paying for cable.

Limiting the amount of impulse buying and needless spending is going to help you stick to your budget and meet your goals. It will also allow you to have a better understanding of where your money is going and not leave you with that “where did all that money go” feeling. From plugging these leaks, you are going to end up spending less money and be able to save more.

• Financial Wellness

Essay on Money Management

Students are often asked to write an essay on Money Management in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Money Management

Understanding money management.

Money management is about how you handle your cash. It’s like a game plan for spending, saving, and making sure you have enough for important things. You keep track of what you earn and make smart choices on what to buy.

Saving Money

Saving means putting money aside for later. Each time you get money, you should save a part of it. This can help you buy big things in the future or have money in case of emergencies.

Spending Wisely

When you spend, think about what you need versus what you want. Needs are things like food and clothes, while wants are extras. Always try to spend less money than you have.

Making a Budget

A budget is a plan for your money. You write down how much money you get and then plan how to spend it. Sticking to a budget helps you not run out of money.

Investing is using your money to try and make more money. It can be risky, so learn and start small. It’s a way to grow your savings over time.

250 Words Essay on Money Management

What is money management.

Money management means taking care of your money. It’s like knowing how to use your pocket money wisely. You plan how to spend it, save some, and make sure you have enough for things you need.

Saving is putting money aside for later. Imagine you want a new toy or a book. If you save a little bit of your money every time you get some, soon you will have enough to buy what you want. It’s like filling a piggy bank; drop by drop, it gets full.

When you spend money, think about what you’re buying. Ask yourself if you really need it or if it’s just something you want because it looks cool. Sometimes, waiting before buying something helps you decide if it’s important.

A budget is a plan for your money. You write down how much money you get and then list the things you need to spend money on, like food, school supplies, and clothes. If you plan it right, you can also save some money.

Why It Matters

Handling money well is a big part of life. When you learn about it while you’re young, you get better at making good choices with money when you’re older. It means you won’t run out of money when you need it, and you can even help others. Plus, you’ll feel proud that you can take care of your money all by yourself.

500 Words Essay on Money Management

Money management means taking care of your money. It’s like being the boss of your own cash. You decide what to do with it: spend it now, save for something big later, or even put some away for times when you might need it urgently. It’s important because it helps you make sure you always have enough money for the things you need and want.

Creating a Budget

Think of a budget as a spending plan. It tells you how much money you have, where it needs to go, and what you can spend without running out. To make a budget, list all the money you get, like allowance or birthday cash. Then, write down what you need to spend money on, like school lunches or saving for a new bike. What’s left is your spending money. Remember, a good budget helps you not spend more than you have.

Saving is like planting a seed that grows into a money tree over time. When you save, you set money aside for later. You might save for a game, a trip, or just to have some extra cash when you need it. A good tip is to decide on a certain amount to save each time you get money. This way, saving becomes a regular habit, just like brushing your teeth.

Smart Spending

Smart spending doesn’t mean you never buy fun things. It means thinking carefully before you buy. Ask yourself: Do I really need this? Will I use it a lot? Could I find it cheaper somewhere else? Sometimes, waiting a bit before you buy can help you decide if it’s really worth it.

Understanding Needs vs. Wants

Needs are things you must have to live, like food, a home, and clothes. Wants are extra things that are nice to have but you could live without, like toys and video games. Good money management means taking care of needs first and then seeing if there’s money left for wants.

Dealing with Emergencies

Emergencies are like unexpected storms that can shake up your money plans. It could be a broken bike or a lost school book. This is why you have savings. If you’ve saved up, you can handle these surprises without getting stressed.

Making Money Grow

You can make your money grow by investing, but this can be tricky. It’s like giving your money a job where it can earn more money for you. Talk to a grown-up and learn about things like bank accounts that earn interest. This means the bank pays you a little bit for keeping your money there.

Sharing and Giving

Money isn’t just for spending on ourselves. Sharing with others can make us feel good. You might give some money to help people in need or support a cause you care about. This is a part of money management, too, because it’s about deciding how to use your money to make a difference.

Managing money is a big responsibility, but it’s also a powerful skill. When you learn to manage your money well, you’re in control. You can reach your goals, handle emergencies, and even help others. Start practicing these money management tips, and you’ll be on your way to being a money management pro!

That’s it! I hope the essay helped you.

If you’re looking for more, here are essays on other interesting topics:

• Essay on Money And Happiness
• Essay on Modesty
• Essay on Modernism

Apart from these, you can look at all the essays by clicking here .

Happy studying!

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• Managing Your Debt

10 Simple Ways To Manage Your Money Better

Being good with money is about more than just making ends meet. Don't worry that you're not a math whiz; great math skills aren't really necessary - you just need to know basic addition and subtraction.

Life is much easier when you have good financial skills . How you spend your money impacts your credit score and the amount of debt you end up carrying. If you’re struggling with money management issues such a living paycheck to paycheck despite making more than enough money, then here are some tips to improve your financial habits.

When you’re faced with a spending decision, especially a large purchase decision, don’t just assume you can afford something. Confirm that you can actually afford it and that you haven’t already committed those funds to another expense.

That means using your budget and the balance in your checking and savings accounts to decide whether you can afford a purchase. Remember that just because the money is there doesn't mean you can make the purchase. You have also to consider the bills and expenses you'll have to pay before your next payday.

How To Manage Your Money Better

• Have a budget : Many people don’t budget because they don’t want to go through what they think will be a boring process of listing out expenses, adding up numbers, and making sure everything lines up. If you’re bad with money, you don’t have room for excuses with budgeting. If all it takes to get your spending on track is a few hours working a budget each month, why wouldn’t you do it? Instead of focusing on the process of creating a budget, focus on the value that budgeting will bring to your life.
• Use the budget: Your budget is useless if you make it then let it collect dust in a folder tucked away in your bookshelf or file cabinet. Refer to it often throughout the month to help guide your spending decisions. Update it as you pay bills and spend on other monthly expenses. At any given time during the month, you should have an idea of how much money you’re able to spend, considering any expenses you have left to pay.
• Give yourself a limit for unbudgeted spending : A critical part of your budget is the net income or the amount of money left after you subtract your expenses from your income. If you have any money left over, you can use it for fun and entertainment, but only up to a certain amount. You can’t go crazy with this money, especially if it’s not a lot and it has to last the entire month. Before you make any big purchases, make sure it won’t interfere with anything else you have planned.
• Track your spending: Small purchases here and there add up quickly, and before you know it, you’ve overspent your budget. Start tracking your spending to discover places where you may be unknowingly overspending. Save your receipts and write your purchases in a spending journal, categorizing them so you can identify areas where you have a hard time keeping your spending in check.
• Don’t commit to any new recurring monthly bills : Just because your income and credit qualify you for a certain loan, doesn’t mean you should take it. Many people naively think the bank wouldn’t approve them for a credit card or loan they can’t afford. The bank only knows your income, as you’ve reported, and the debt obligations included on your credit report , not any other obligations that could prevent you from making your payments on time. It’s up to you to decide whether a monthly payment is affordable based on your income and other monthly obligations.
• Make sure you’re paying the best prices : You can make the most of your money comparison shopping, ensuring that you’re paying the lowest prices for products and services. Look for discounts, coupons, and cheaper alternatives whenever you can.
• Save up for big purchases : The ability to delay gratification will go a long way in helping you be better with money. When you put off large purchases, rather than sacrificing more important essentials or putting the purchase on a credit card, you give yourself time to evaluate whether the purchase is necessary and even more time to compare prices. By saving up rather than using credit, you avoid paying interest on the purchase. And if you save rather than skipping bills or obligations, well, you don’t have to deal with the many consequences of missing those bills .
• Limit your credit card purchases : Credit cards are a bad spender's worst enemy. When you run out of cash, you simply turn to your credit cards without considering whether you can afford to pay the balance. Resist the urge to use your credit cards for purchases you can’t afford, especially on items you don’t really need.
• Contribute to savings regularly : Depositing money into a savings account each month can help you build healthy financial habits. You can even set it up so the money is automatically transferred from your checking account to your savings account. That way, you don’t have to remember to make the transfer.
• Being good with money takes practice :​ In the beginning, you may not be used to planning ahead and putting off purchases until you can afford them. The more you make these habits part of your daily life, the easier it is to manage your money, and the better off your finances will be.

Frequently Asked Questions (FAQs)

Why is money management important.

Without money management, personal finances are a bit of a mystery. This can lead to overspending and living paycheck-to-paycheck. Money management can help you have a better handle on your income and spending so you can make decisions that improve your financial status.

How do you improve money management?

You can improve your money management by regularly evaluating what you're doing with money and making changes that make sense for you. For example, if you don't have a budget, you could start by developing one. If you have a budget, you could track your spending and see how it lines up with your budget. Once you have an idea of your income and spending, you could choose to increase your savings, pay off debt, or start investing based on your financial goals.

Consumer Financial Protection Bureau. " Budgeting: How to Create a Budget and Stick With It ."

Consumer.gov. " Making a Budget ."

FiftyThirtyTwenty.com. " Income + Financial Stability in America ."

Consumer Financial Protection Bureau. " Spending Tracker ."

Consumer Financial Protection Bureau. " Bill Calendar: Know What You Owe and When It's Due ."

WSFS Bank. " 5 Ways to Save for a Big Purchase ."

Discover. " Six Tips On How To Stay Out of Debt ."

Consumer Financial Protection Bureau. " Looking for An Easy Way to Save Money? Make It Automatic ."

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How to Manage Your Money Wisely

Last Updated: March 20, 2024 Approved

This article was co-authored by Samantha Gorelick, CFP® . Samantha Gorelick is a Lead Financial Planner at Brunch & Budget, a financial planning and coaching organization. Samantha has over 6 years of experience in the financial services industry, and has held the Certified Financial Planner™ designation since 2017. Samantha specializes in personal finance, working with clients to understand their money personality while teaching them how to build their credit, manage cash flow, and accomplish their goals. There are 12 references cited in this article, which can be found at the bottom of the page. wikiHow marks an article as reader-approved once it receives enough positive feedback. In this case, 95% of readers who voted found the article helpful, earning it our reader-approved status. This article has been viewed 116,590 times.

Managing your money can seem like an impossible task, but that is only because you haven't taken the time to start managing it. Today, keeping your finances in order is easier than ever. With careful budgeting, smart saving, and some basic attention to your income and expense, you can manage your money wisely without getting an MBA.

Budgeting Your Money

• Any additional money (tips, bonuses, etc.) should be considered "extra." By planning for only your guaranteed income you ensure that you will have enough money to cover living expenses should anything happen. It also leads to the happy "surprise" of extra money when it comes.

• If you spend cash, keep the receipt and make a note of what you bought.
• Apps like Mint, Mvelopes, HomeBudget, and more allow you to sync your credit cards, bank accounts, and investments to one place, providing graphs of your spending based on categories. This is a great way to get a view of your finances with very little work needed.

• Fixed Expenses: These are things that do not change month to month but must be paid, including rent, car/loan payments, etc.
• Essential Expenses: These include food, transportation, and utilities -- anything that you need to live but whose cost changes from month to month.
• Non-Essential Expenses: This is everything else, such as movie tickets, drinks with friends, and toys/hobbies. This is the biggest place most people realize they can save money.

• Place your month income and expenses side-by-side in a spreadsheet. You can also write them down in a journal or notebook. Having these numbers next to each other lets you see how much money you have left over to spend.

• 10% is the bare minimum you should be putting aside into savings. This will quickly grow, and often will not hurt you much in the short-term. That said, this money should also be used to pay off any debt if it is large and interest payments are big.
• 20% is considered a good, safe amount of savings. This ensures that, ever 5-6 months, you end up with enough saved income to protect you for a full month if something happens to you. It allows you to save a lot of money without drastically affecting quality of life.
• 30% is the goal everyone should shoot for. This allows you to save money for retirement, big activities like vacations, and large purchases (cars, college, etc.). It may, however, limit what you can afford in the short term. [3] X Research source

Spending Smartly

• What are you priorities in life -- good food, vacations, or just time with the family? Knowing what you personally care about buying can help avoid costly impulse buys.
• What things in your life can you cut and hardly notice -- such as a scone to go with your morning coffee, the 200 cable channels you hardly watch, bottled water, etc?

• Read all of the agreement form before signing up for your card. What is the monthly interest rate? How is minimum payment calculated? Are there annual or overdraw fees?
• Always try and pay more than the monthly minimum. If you pay the entire balance each month, for example, you won't pay any interest down the road.
• One credit card is enough -- juggling multiple bills and statements is a surefire way into credit card debt.
• Curb spending on credit so that you stay within 30-40% of your limit. You should never get close to your limit, as this is often difficult to repay without exorbitant interest rates. [5] X Research source

• Making grocery lists will keep you on track in the store, helping save money and plan meals effectively so no food is thrown out.
• Never buy something just because it is on sale -- you are still spending money, no matter how much the advertisement talks about "savings." [6] X Research source

• Browse online and set an appropriate spending cap -- the absolute maximum you will spend on a car/house/etc. Be very strict about this cap, no matter what a salesman says.
• Look up how much the object should cost and memorize the number.
• Check the prices at 2-3 different vendors to compare them. If you feel comfortable negotiating, you can mention to a vendor that you've found a similar or better price and ask them to lower theirs.
• If you have time to spare, wait and look for sales. Typically, for example, car dealerships offer sales in the summertime. [7] X Research source

• When buying food you only save money if you don't throw any out, otherwise you simply paid more money for the same amount you normally eat.
• Learn to read "unit price" which is the small label in stores that says "price per pound" or "price per ounce." Bulk items have a lower unit price, which means you are getting more product for less money.

Saving for the Future

• What are your fixed and essential expenses for one month? Multiply this number by 3-6 months to get your minimum emergency savings.

• Start saving for the holidays 5-6 months in advance. Even $50 a month will give you a cushion of $300 for gifts by December.
• Saving to send your kids to go to college can't start early enough. Make separate savings accounts for them when they're born and make saving a priority.

• The exception to this is high-interest credit card debt. If you find yourself sinking into a hole of credit card payments or are only able to pay interest, you may save more money by taking 2-3 months to pay them off.

• When you get a raise, add that amount to your monthly savings. You will keep your same quality of life and save much more in the long-term. [13] X Research source

• Never remove money from a 401k or long-term investment before it matures -- you may have to pay a fee or relinquish all the gains you've made.

How Can I Be Smarter With My Money?

Expert Q&A

• Managing your money wisely is, above all, about restraint. Many of the benefits of careful financial planning don't come true for 20 or 30 years, making it seem better to spend money right now. Think of saving, instead, of spending on yourself and your future. Thanks Helpful 3 Not Helpful 0

• Investments are inherently risky -- you never know 100% if it will pan out. Talk to a financial adviser if you want to invest a significant amount of money in anything. Thanks Helpful 6 Not Helpful 2

You Might Also Like

• ↑ Samantha Gorelick, CFP®. Financial Planner. Expert Interview. 6 May 2020.
• ↑ http://www.forbes.com/sites/robertberger/2015/03/03/how-much-of-your-income-should-you-save/
• ↑ https://www.mappingyourfuture.org/money/creditcards.cfm
• ↑ http://mywifequitherjob.com/how-to-build-wealth-by-spending-money-wisely/
• ↑ http://www.goodhousekeeping.com/life/money/advice/a19098/125-tips-to-save-money/
• ↑ http://www.sheknows.com/living/articles/808185/tips-on-how-to-save-money-and-spend-wisely
• ↑ http://www.investopedia.com/articles/pf/08/pay-in-cash.asp
• ↑ http://www.bankrate.com/finance/savings/how-big-should-emergency-fund-be.aspx
• ↑ http://beginnersinvest.about.com/od/retirementcenter/a/060104a.htm
• ↑ http://www.kiplinger.com/article/retirement/T047-C000-S002-how-to-retire-rich-4-smart-steps-at-ages-21-35.html
• ↑ http://www.investopedia.com/articles/retirement/07/plan_retirement.asp

About This Article

The key to managing your money wisely is only spending what you can afford and saving for a rainy day. Keep track of your income and expenses so you know how much money you have leftover to spend. Try to save around 20 percent of your income for future investments and purchases. It's also a good idea to keep 3 to 6 months’ worth of living expenses in a savings account in case of an emergency, like losing your job or having to pay for extra medical bills. Only use credit for bills and purchases you know you can afford at the end of the month. That way, you won’t end up paying extra interest. When you’re making big purchases, like a new car or computer, do plenty of research so you can find the best deal and save money. For more tips, including how to invest your money for the future, read on! Did this summary help you? Yes No

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How To Spend Money Wisely Essay Example

• Pages: 6 (1392 words)
• Published: July 21, 2016
• Type: Essay

Do you hate it when you really need money, but your wallet is empty? No matter how little or how much money you have, spending it wisely is a good idea. But how do you spend money wisely? People actually tend to overspend in a few specific areas. So,following the steps below will improve your overall pocketbook health. First, come up with a budget. Financial experts suggest you track your spending for a few months so that you start work on your budget knowing where your money is going. If you are bad about saving receipts for cash purchases, keep a notebook with you, to write down all cash purchases as you make them.

Additionally, make a list of your monthly expenses, using your bills and the information you gather. Review this list

to determine where you can reduce expenses and by how much. Therefore, avoid impulse buying. Before making any purchase, ask yourself a few simple questions, and be honest with your answers. Only move on to the next question if you can answer yes to the current one. If you cannot get all the way through the questions, it is probably an impulse buy and you should pass it up. You should think about the things in your life that you tend to spend the most money on.

Most of these areas are outlined below, with suggestions as to how you can cut down on spending in them. Besides. shop around regularly for utilities and insurance. Many service providers count on customers sticking with the services simply because it is easier than shopping for another one regularly. If it

has been more than a year since you purchased your cell or home phone service, cable or satellite package, internet service, or car, home, or health insurance, shop around and make sure you are still getting the best deal. Moreover, Research large purchases before buying.

Never purchase anything that costs more than $200 without conducting some research first. The more expensive the item, the more research you will want to conduct. Your research should compare brands, prices, and quality so that you can determine which product is the best for you and your budget. Some reputable places to start your research include. Money doesn’t grow on trees. So, we must work hard to find money Managing your money wisely is one of the most important ways to gain a level of financial stability and independence.

Regardless of your income level, there are intelligent and manageable ways to spend money, and there are many ways that can leave you behind the eight ball and unable to pay the bills. If you’ve never had lessons on money management or have simply forgotten them over time, here are a few very simple steps you can take to put you and your bank account on the right track to financial stability and comfort for you and your family. 1. Don’t Spend it All It seems pretty simple, but spending less than you earn is an essential first step to stabilizing your situation and having something left over at the end of the month.

The easiest way to track this is on a monthly basis. Chances are you already know how much money you earn in a

month. Now get all your monthly bills you have to pay every month and add those up. After that, figure out how much money you spend on groceries, entertainment, and other day-to-day expenses throughout the month. Once you have it all added up, you’ll know if you’re saving money at the end of the month or ending up with a deficit. If you have a deficit at the end of the month, you are probably buying those extra items on a credit card with interest rates that will make you owe more money in the long run.

Stay away from a situation like that by being sure you spend less than you make every month. 2. Don’t Waste Money Having fun is important and everyone deserves to spend a little bit on entertainment and recreation every once in a while, but there are places in almost every budget where you can cut back without decreasing your quality of life. Take an honest look at what you spend your money on and find those things that are essential (mortgage, medical bills, insurance, rent, car insurance, etc. ). After that the most important thing is food.

That’s a little more complicated, because you have to buy food, but you probably don’t have to buy all the food you’re buying. See where you can cut out on junk food and other things you don’t need. Cook at home more often and eat out less. Use generic brand name products rather than popular brand names. All of this will save you money in the long run. If there are other places in your entertainment budget that you

can cut costs, do it. 3. Start Saving Early Once you’re able to put away some extra money at the end of the month, don’t spend it all at once on something. Instead, invest it in the future of your family and your own retirement.

If you put your money into a high yield savings account now it will end up paying off by a lot in the long run. How To Spend Your Money Wisely It is always important and necessary for you to understand your personal finances. Whether you like it or not, being able to learn more about your money makes you more confident in the decisions that you make in the future. When you understand these tips, your financial situation will improve. Build a budget based on your monthly income and costs. A budget is a tool to help you plan, prioritize, and manage your income and expenses.

Review your budget often and update it when you are experiencing a change in income and expenses. The key to building an effective budget is knowing exactly how much money your family earns every month. Everything you spend money on should be accounted for. Never spend more money than you have available. Take the time to record your expenses. Making a list of expenditures can help you to visualize where all of the money goes. Don't overlook expenses that don't occur monthly but are paid quarterly or twice a year. Add surprise expenses to your list, such as emergency or repair costs.

You should also include leisure and entertainment expenses on your list. Doing all of this will ensure that

you have an accurate portrayal of your expenses. Once you have established a detailed record of your household cash flow, you can create a feasible budget. Eliminate things from your budget that are not necessary. You can keep a lot of money in your pocket if you stop buying your coffee at a coffee shop or buying your lunch. Upgrades and improvements to your house can save money on your utility bills. Consider getting new appliances, like efficient washing machines or dishwashers, that use less water.

When it comes to delivering hot water, tank heaters are less efficient than on-demand or inline heaters. You should have the pipes in your home checked in order to find any leaks that may be costing you extra on your water bill. You may want to think about upgrading appliances with energy smart ones. Appliances that have circuitry that regulates their energy use save a lot of money over time. You should also unplug unused electrical devices when they are not in use. In the long run, things with the indicator lights can use quite a bit of electricity.

Another project that you can undertake is to increase insulation. You can do this by improving your walls, ceiling, and roof. You will find that your home will be able to store more heat, which can save money. This might take a lot of time, but the money saved is worth it. Although some of these suggestions may bring with them significant investments, it is still certain that they will be of worth in the long run. The money you spent on the initial invest will quickly be

returned to you in the form of lower bills. Over time, you will have a lot more money and financial freedom.

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5 Easy Ways to Take Control of Your Personal Finances

• Kiara Taylor

Managing your money doesn’t have to be overwhelming.

Don’t let your finances stress you out to the point of inaction. Instead, take back control by following the steps below:

• Start budgeting. But here’s the key: Don’t use your budget to set unrealistic goals about how much you are going to save and how much extra money you will earn. Instead, aim to make it an accurate description of how your finances work. See where you could be spending more or spending less.
• Create an emergency fund. Putting aside $50 a month can really add up. You should aim to have at least $1,000 in your fund until you are out of debt.
• Be honest with yourself. The financial gap resulting in your debt might be caused by a number of factors – you may not be earning enough, or you may be spending too much. You need to name the problem to figure out the right long term solution.
• Ask for help. There are plenty of services out there that can help you take back control — from financial planning services to debt management advisors to credit counseling services.

Where your work meets your life. See more from Ascend here .

The last year has been a very difficult one. Not only have we had to deal with travel restrictions, lockdown orders, and fears of getting sick — many of us have also been struggling financially.  In fact, research suggests that financial stress is at an all-time high in America, a phenomenon explained by the numerous hiring freezes and layoffs brought on by the pandemic. 

• KT Kiara Taylor has more than 10 years of experience in finance, ranging from fixed income to emerging markets. She enjoys writing on the impact of both micro and macro trends on global finance, and has contributed to Investopedia , The Balance , and Crunchbase .

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How To Spend Money Wisely

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Do you hate it when you really need money, but your wallet is empty? No matter how little or how much money you have, spending it wisely is a good idea. But how do you spend money wisely? People actually tend to overspend in a few specific areas.

So,following the steps below will improve your overall pocketbook health. First, come up with a budget. Financial experts suggest you track your spending for a few months so that you start work on your budget knowing where your money is going. If you are bad about saving receipts for cash purchases, keep a notebook with you, to write down all cash purchases as you make them.Additionally, make a list of your monthly expenses, using your bills and the information you gather.

Review this list to determine where you can reduce expenses and by how much. Therefore, avoid impulse buying. Before making any purchase, ask yourself a few simple questions, and be honest with your answers. Only move on to the next question if you can answer yes to the current one. If you cannot get all the way through the questions, it is probably an impulse buy and you should pass it up. You should think about the things in your life that you tend to spend the most money on.

Most of these areas are outlined below, with suggestions as to how you can cut down on spending in them. Besides. shop around regularly for utilities and insurance. Many service providers count on customers sticking with the services simply because it is easier than shopping for another one regularly. If it has been more than a year since you purchased your cell or home phone service, cable or satellite package, internet service, or car, home, or health insurance, shop around and make sure you are still getting the best deal. Moreover, Research large purchases before buying.

Never purchase anything that costs more than $200 without conducting some research first. The more expensive the item, the more research you will want to conduct. Your research should compare brands, prices, and quality so that you can determine which product is the best for you and your budget. Some reputable places to start your research include.

Money doesn’t grow on trees. So, we must work hard to find money Managing your money wisely is one of the most important ways to gain a level of financial stability and independence.Regardless of your income level, there are intelligent and manageable ways to spend money, and there are many ways that can leave you behind the eight ball and unable to pay the bills. If you’ve never had lessons on money management or have simply forgotten them over time, here are a few very simple steps you can take to put you and your bank account on the right track to financial stability and comfort for you and your family. 1. Don’t Spend it All It seems pretty simple, but spending less than you earn is an essential first step to stabilizing your situation and having something left over at the end of the month.

The easiest way to track this is on a monthly basis. Chances are you already know how much money you earn in a month. Now get all your monthly bills you have to pay every month and add those up. After that, figure out how much money you spend on groceries, entertainment, and other day-to-day expenses throughout the month. Once you have it all added up, you’ll know if you’re saving money at the end of the month or ending up with a deficit. If you have a deficit at the end of the month, you are probably buying those extra items on a credit card with interest rates that will make you owe more money in the long run.

Stay away from a situation like that by being sure you spend less than you make every month. 2. Don’t Waste Money Having fun is important and everyone deserves to spend a little bit on entertainment and recreation every once in a while, but there are places in almost every budget where you can cut back without decreasing your quality of life. Take an honest look at what you spend your money on and find those things that are essential (mortgage, medical bills, insurance, rent, car insurance, etc. ). After that the most important thing is food.

That’s a little more complicated, because you have to buy food, but you probably don’t have to buy all the food you’re buying. See where you can cut out on junk food and other things you don’t need. Cook at home more often and eat out less. Use generic brand name products rather than popular brand names.

All of this will save you money in the long run. If there are other places in your entertainment budget that you can cut costs, do it. 3. Start Saving Early Once you’re able to put away some extra money at the end of the month, don’t spend it all at once on something. Instead, invest it in the future of your family and your own retirement.If you put your money into a high yield savings account now it will end up paying off by a lot in the long run.

How To Spend Your Money Wisely It is always important and necessary for you to understand your personal finances. Whether you like it or not, being able to learn more about your money makes you more confident in the decisions that you make in the future. When you understand these tips, your financial situation will improve. Build a budget based on your monthly income and costs. A budget is a tool to help you plan, prioritize, and manage your income and expenses.Review your budget often and update it when you are experiencing a change in income and expenses.

The key to building an effective budget is knowing exactly how much money your family earns every month. Everything you spend money on should be accounted for. Never spend more money than you have available. Take the time to record your expenses. Making a list of expenditures can help you to visualize where all of the money goes.

Don't overlook expenses that don't occur monthly but are paid quarterly or twice a year. Add surprise expenses to your list, such as emergency or repair costs.You should also include leisure and entertainment expenses on your list. Doing all of this will ensure that you have an accurate portrayal of your expenses.

Once you have established a detailed record of your household cash flow, you can create a feasible budget. Eliminate things from your budget that are not necessary. You can keep a lot of money in your pocket if you stop buying your coffee at a coffee shop or buying your lunch. Upgrades and improvements to your house can save money on your utility bills.

Consider getting new appliances, like efficient washing machines or dishwashers, that use less water.When it comes to delivering hot water, tank heaters are less efficient than on-demand or inline heaters. You should have the pipes in your home checked in order to find any leaks that may be costing you extra on your water bill. You may want to think about upgrading appliances with energy smart ones.

Appliances that have circuitry that regulates their energy use save a lot of money over time. You should also unplug unused electrical devices when they are not in use. In the long run, things with the indicator lights can use quite a bit of electricity.Another project that you can undertake is to increase insulation. You can do this by improving your walls, ceiling, and roof.

You will find that your home will be able to store more heat, which can save money. This might take a lot of time, but the money saved is worth it. Although some of these suggestions may bring with them significant investments, it is still certain that they will be of worth in the long run. The money you spent on the initial invest will quickly be returned to you in the form of lower bills.

Over time, you will have a lot more money and financial freedom.

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5 Smart Ways To Make Wise Spending Decisions As Financially Savvy Travelers – Episode 150

Knowledge is power. The more knowledgeable I’ve become, the more I can make informed financial decisions that benefit me as a traveler. In my book, We Are Financially Savvy Travelers , we talk about how improving your knowledge base is an important component of financially savvy travel. That can look like learning from blog posts and articles, enrolling in courses, listening to travel podcasts or trial-and-error. Today, we’re peeling back another layer of financially savvy travel. Often overshadowed by the appeal of spending less, learn about the differences between wise spending and spending less and valuable ways to spend money wisely as financially savvy travelers.

• [7:14] The difference between wise spending and spending less
• [10:35] Ways to spend your money wisely as financially savvy travelers
• [13:45] Good deal vs great deal
• [21:09] Shortlist of best travel newsletters

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Danielle Desir Corbett: Knowledge is power. The more knowledgeable I've become, the more I'm able to make informed financial decisions that benefit me as a traveler. In my book, We Are Financially Savvy Travelers, we talk about how improving your knowledge base is an important component to financially savvy travel. That can look like learning from reading a book, reading articles, taking courses, listening to travel podcasts, or from trial and error. In this episode, we're peeling back another layer of Financially Savvy Travel. We're going to be covering two important pieces. The differences between wise spending and spending less. And I'll be sharing with you five ways to spend money wisely as financially savvy travelers. If you're new here, hi, I'm Danielle Desir-Corbett, a financially savvy traveler. I've been talking about financially savvy travel online since 2015. Yeah, that's like eight years at the time of this recording. I believe that you can be well traveled, you can pay off your debt, and also build wealth. And adopting a financially savvy travel mindset has helped me to travel to over 27 countries. And I'm just getting started. If this is your first episode, then go ahead and follow the podcast because you'll get new episodes automatically sent to your phone the minute I hit publish. There are over 170 episodes available for you to listen to, which has been five years in the making. And many of you have been with me since the very beginning, and I so appreciate that. If you're keeping track, I launched a show in 2018. Before we jump into today's episode, I wanted to take a moment to shout out our sponsor. I really appreciate Aura for partnering with me on this three-part series. And also, thank you to you all, my dear Financi Savvy Traveler listeners, for tuning in and giving Aura a try with their 14-day free trial. We all know that protecting our digital assets is an absolute must. But let's face it, managing separate password managers, VPNs, credit and transaction monitoring, and even spam call protection from various providers can be a real headache, not to mention pricey. That's where Aura comes in. Aura is your all-in-one digital protection solution where you can get premium high-value protection for one reasonable price. Whether you're an individual, a couple, or a family, Aura has you covered. Our family relies on Aura to shield us from theft and financial fraud. But that's not all. Aura goes the extra mile with child safety features helping us monitor content, block dangerous websites, and prevent cyberbullying as our kids grow up. So here's your chance to simplify your online safety while saving big. Try Aura today with a 14-day free trial when you use the link in our show notes or visit Aura.com slash savvy. A big thank you to Aura for teaming up with us on this episode. Welcome to the Thought Card, a podcast about traveling money, where planning, saving and creativity leads to affording travel, building wealth and paying off debt. We are the Financi Savvy Travelers. Alrighty, why spending is about making thoughtful and intentional money decisions, aligning our spending habits with our priorities. Here's a couple of reasons why making informed financial decisions is really important for us. Number one, we're able to allocate our hard earned funds strategically. We are trying to get the most value out of every single dollar that we spend. But I also think that there is an important piece of advocation here as well, meaning that we are advocating also for ourselves. When we know certain things, how things move in the travel industry, we can peep when something is off and we could speak up and we could advocate for ourselves. Another aspect when it comes to making informed financial decisions is unlocking these savings opportunities, right? Part one, we do want to get the most value, but sometimes because we are aware of what's possible, we're able to tap into those savings and actually end up spending less, which to many of us is amazing and great, right? But on a more practical and honestly, just a more realistic view of making informed decisions, it helps us to extend our travel funds. We can go further. We can travel longer. So I always say that travel and money go hand in hand. You need money to travel, regardless if you're spending minimally. At some point, you're going to have to spend money. And when you are coming to the table as an informed traveler who is going to be making informed financial decisions, you have so much going for you. Again, you have this strategy, you're looking at value, you may be looking at savings, and it just, again, fuels your ability to travel, which is very, very powerful. Now, what I often see out there in the world because we've talked about this in previous episodes that a lot of times people lump us into this budget travel category. But let me clarify something very important. Why is spending in the travel space is often overlooked or shadowed by this concept of spending less money? And we hear it all the time. We hear travel more and spend less. But I believe financially savvy travel is all about the subtle nuances. Why spending and spending less are related, but they differ in a couple of ways. So let's break it down. Why spending involves making thoughtful and strategic decisions with your money, right? It's about prioritizing your values, getting the most out of your purchases, and this alignment where you're aligning your spending with your financial goals. On the other side, spending less means reducing the amount of money you spend. While spending less can be part of wise spending, it might involve cutting back without considering the value or impact. When you are solely focusing on spending less, you might be sacrificing quality, you might be sacrificing convenience, or you may be skipping out on experiences altogether just to minimize costs. So again, these subtle nuances, which is again, why I wrote the book, We Are Financially Savvy Travelers, it's why I spent so much time really thinking about what makes us so distinct and unique and why I typically have this reaction when someone says that you're a budget traveler, I usually react poorly to that. And I was trying to unpack why I was feeling that way and what makes us different. And like I said, writing this book really was just eye-opening for me to have this critical look. And again, there are just these nuances, these very subtle nuances. And again, as Financially Savvy Travelers, it feels natural. Like I know for me, I'm always looking at value. I'm looking at my goals and my priorities, and I'm thinking about mindfulness and alignment. but it's never really been said out loud. And there is a distinction. There is a true distinction between, okay, I want to get the best value out of this, but I want to also do the things I really want to do. And I understand that money plays a role in that, but I want to spend on the things that are important to me versus those experiences where I just, I'm like, I am not going to do that. Like, I'm just trying to be, do the minimal or bare minimum. I'm focusing on spending less. So all that to say that there are subtle differences, and financially savvy travelers, they do think about spending less, but there's also this piece of wise spending element, this thoughtfulness, this strategy piece, the value-based spending again, getting the most out of our purchases, and this alignment. Alignment is this recurring theme that we've been seeing in this series, and also mindfulness as well. Again, I hope that clarifies the differences and nuances, the subtle differences between the two. And let's move on to the five different ways that you can be a more informed traveler. So the first thing that comes to mind is knowing the rules of engagement. There are lots of things when you sit down and think about whether it's at the airport or credit card travel hacking or airline or hotels, like all of these subcategories in travel have different rules of engagement. And when you know what you are entitled to, you are able to make better, more informed decisions because you know the rules. For example, what happens if you purchase the flight and you need to cancel within 24 hours? Well, if you're based in the US and you're doing your thing, you can cancel your flight within 24 hours, no penalties, you'll get your money back, no issues, regardless of your plane ticket. It's just one of those protections that we have. But if you don't know that exists, you may end up missing that 24 hour window and you may now be getting airline credit or just completely wasting that funds because your airline maybe doesn't have a program where you can get credit back. right? Or let's say you end up missing or canceling a flight and you get credit back and you don't realize that your credit from your airline company has an expiration date. And then you miss the expiration date, time has passed, and now you just really truly lost out of money. So these are just like simple examples of just airlines alone. Knowing these rules of engagement can really put you in a powerful, knowledgeable position. So knowing the rules is really important. And it may be, I know, sometimes challenging, especially if you don't have a lot of experience traveling to like know every little thing, but it's something that you acquire over time. And I'm sure, like, for example, listening to this podcast, you may have picked up things over time, right? So we kind of continue to put little nuggets into our file cabinets in our brains, right? We put little nuggets in there, and when we need it, we pull it out. We're like, oh, yes, I remember that. Or, oh, yes, let me look into that. Or how does this work again? Am I positioning myself well? All those things happen when you know the rules of engagement. Something else to note here is that rules change. Things change. Especially if you're in the points and miles space. Things change all the time. Airlines change all the time. So just be aware that know the rules of engagement, but also understand that things change. And we're going to be keeping up to the times to make sure that, again, we stay knowledgeable and we stay up to date with what's going on. Now the second way that you can make more informed decisions is to know the differences between a good deal and a great deal. And to do this, you really have to get comfortable and start tracking and comparing prices. And what's important here is to compare apples to apples. So for example, let's say you're planning a trip to New York City and you're thinking about a four star hotel and you're comparing these two different prices, but one hotel is four star and the other hotel is two star. So in this situation, you're actually comparing apples to oranges because they're not even in the same hotel class. So that's something to be mindful of and aware of when you are comparing, especially when you're paying like hotels. Again, because some hotels may have more perks and things built into the price. Again, we won't go too deep into it, but you get what I'm saying. Another thing that's really important when it comes to the differences between a good deal and a great deal is establishing a price baseline. I won't go too much into detail here because I break it all down and also stress the importance and how to calculate everything in We Are Financially Savvy Travelers. But to just give you a very quick gist, it's really understanding and knowing when something is on sale. And for you to know that something's on sale, you have to know the regular price. You have to have seen the regular price with your own eyes for you to know and say, okay, now is the best time to hop on this because I've seen it at multiple price points and this is the best. price. Again, in order to do that, you need to be tracking, you need to be comparing, and you need to be on it. So for example, I love Bermuda. Bermuda is top three destinations I've been to in the world so far. And I've spent the last year and a half tracking my Bermuda flights. and it wasn't until recently that flights have come down. So flights have been anywhere from 500, 600 plus thousand of dollars and I was like no. So I've been just kind of keeping an eye on prices and recently it's come down to 300, and 50 plus dollars. So because I've established this baseline, I know when something's on sale. I know when Bermuda is on sale. So I'm going to go and jump on this Bermuda flight because I've been tracking it for so long. And again, I am knowledgeable and aware of what's good and what's great. A lot of times there will be promotions and marketing out there that tells you that this is the best travel deal ever. But really though, is it? I beg to differ. And the only reason I can say that is, again, because I know the difference. I know what a good deal is. I know what a great deal is. I know what prices are. And I can tell if something is truly at a discount versus just a marketing ploy. All right, so that's number two is knowing the differences between good deals and great deals. Now, number three on the list of, again, making informed and wise spending decisions is doing your research and planning ahead. When you plan ahead and do your research, you undoubtedly are aware. You are gonna know things like the currency at the destination that you're traveling to, the tipping culture, which actually financially impacts you a lot, okay? In the US, we tip anywhere from 15, 17 plus percent that adds up compared to somewhere like Iceland where tipping is not required, it makes a big difference, okay? So things like, again, currency, tipping culture, even how much it costs to go to a destination. So on my website, thoughtcard.com, I intentionally create trip costs budget breakdown so that all of my listeners, all of my readers can know exactly how much I spent as this financially savvy mid-budget traveler. So when you know, on average, how much food costs or how much a trip costs in general, you can now start to put pieces together, have a more accurate savings goal for yourself. And again, it puts you in this more informed, knowledgeable headspace. So research and planning ahead, definitely on the list of things to do. Alrighty, moving on to number four is tracking your travel spending. And again, we talk about this in my book again, but one of the important things when it comes to tracking your spending on the road is to do a trip debrief. And in this trip debrief, you're going to look at all the things you spent your money on and you're going to be asking yourself, okay, where did I spend money? What do I want to change? It's really an analysis and taking stock and saying, okay, what did I do really well here? Did I stay on budget? Did I go over budget? And what do I want to change? And a lot of times when we're looking at our expenses after a trip, we're looking at what do I have to adjust? What do I have to reduce or eliminate completely? And again, in the book, I have a really good example about a trip I went on and I spent excessively on an item that I would never do at home. And I thought that was a really good example of, okay, if you don't take a step back when you come back from a vacation and really look at your money spending, you won't realize where you could have saved or where you were going overboard or where maybe you were a little bit wasteful or maybe something didn't pan out and you would change that for the future. So there's a lot of nuggets and gems that come from a trip debrief and I break it all down in the book. So again, I encourage you to grab the book because you'll get all the deets in there. But tracking your travel spending is very powerful and will definitely definitely make you a more knowledgeable traveler. And this definitely couples in with your travel style, right? Because again, if you know your travel style and you look at your spending and you're like, whoa, I did not even spend any money on the things I care about. And I spent all this money on things I didn't care about. You're going to start to move and adjust differently for next time. Right. So there's a lot of learning lessons just right there by simply just tracking your travel spending. All right, so the last tip I have for you when it comes to making informed financial decisions is to keep up with travel news. I kind of teased it in the first one, but keeping up with travel news is so important. That can look like signing up for newsletters for the brands that you want to keep in touch with, And, you know, all these news will come out and you could know about the latest hotel mergers, the latest airline acquisitions. You can really pick up on tips and tricks. You can learn things like lucrative partnerships, like the Delta and Airbnb partnership, where you can earn points and miles. by just going to a special link and you can get Delta points on your Airbnb stays, right, for example. So there's lots of ways for you to kind of stay in the know. Of course, listening to this podcast is one of them, but I wanted to share with you a couple of newsletters that I trust and I'm subscribed to and have been for many, many, many, many, many years. So the Points guy, I love them for maximizing travel rewards and they give lots of updates and travel news and industry news in the industry. So they're really great for staying in the know. Also another one of my favorites is Thrifty Traveler, of course, for all things cheap flights. They also do a great job with travel news, travel updates, and also travel rewards as well. The Airline Observer by Brian Summers is great for airline business news and analysis. And another newsletter by Hotel Addict is great for hotel news, reviews, and also trends. So overall, I hope you enjoyed this episode and it gave you lots of food for thought with plenty of examples of how you can make more informed decisions as financially savvy travelers and different ways it can look like. So I want to stress again, know the rules of engagement or try to at least try to at least understand and know what you're getting yourself into. Know the difference between a good deal and a great deal by tracking and comparing prices. Research and plan ahead for your trips, especially if you're going internationally. Track your travel spending, break things down when you come back home, look at your spending, look at your receipts, Look at your bank statements because there's lots of clues about your money and your spending habits right there that you can analyze and make decisions moving forward, whether you want to adjust, reduce, or eliminate some categories completely. And then lastly, keep up to date with travel news. There's lots of incredible newsletters and even travel podcasts. So in episode 121, I shared a few of the travel podcasts that I love, and trust and recommend anyone who would listen, but there's a blog post. So if you go over to thoughtcard.com slash travel podcast, again, that's two words, travel podcasts. I keep this blog post updated. on the daily and we have now 31 must follow travel podcasts that you must follow because they're so good. And again, I want to make sure everyone is aware of just the amount of incredible travel audio content there is out there. and they're really great for keeping you updated. All right? So if you're loving this series, you know what to do. Go grab my new book, We Are Financially Savvy Travelers. It's chock full of insights to help you become more money mindful without compromising your other money goals. Because let's face it, travel is a money goal and we got other goals to accomplish. Am I right? I am right. We Are Financially Savvy Travelers is available on Amazon, Barnes & Noble, Apple, and also your local library. Ask your local library to order the book. They will. And that's also just a great way to have the book in way more hands. So order the book on your local library. Get it in the hands of your local community. Let me know what you think about the book. I love to hear from you. All right, financial savvy travelers, that is all for this episode. I will catch you in the next one. Bye.

About Our Sponsor – Aura

Big thanks to Aura for teaming up with us on this episode.

Protecting our digital assets is an absolute must. But let’s face it: managing separate password managers, VPNs, credit and transaction monitoring, and even spam call protection from various providers can be a real headache. Not to mention pricey. That’s where Aura comes in. 

Aura is your all-in-one digital protection solution where you get premium, high-value protection for a reasonable price.

Our family relies on Aura to shield us from theft and financial fraud, but that’s not all. Aura goes the extra mile with child safety features, helping us monitor content, block dangerous websites, and prevent cyberbullying as our kids grow up.

So, here’s your chance to simplify your online safety while saving big. Click here to try Aura today with a 14-day free trial.

• Wise Spending vs Spending Less

Table of Contents

1. Know the Rules of Engagement

2. differentiate between good deals and great deals, 3. research and plan ahead, 4. track your travel spending, 5. stay up-to-date with travel news.

In the frugal travel space, we often hear the advice to “travel more and spend less.” While this mantra holds some truth, it’s important to recognize the subtle nuances between the two.

Wise Spending: Spending money wisely involves making thoughtful and strategic choices with your money. It goes beyond simply cutting back on expenses but prioritizing value, getting the most out of your purchases, and aligning your spending with your financial goals. When you practice spending wisely, you consider the long-term impact of your financial decisions and ensure they align with your priorities.

Spending Less: On the other hand, spending less means reducing the amount of money you spend. While spending less can be a part of wise spending, it often involves cutting back without necessarily considering the value or impact. When you focus solely on spending less, you may sacrifice quality and convenience or skip experiences altogether to minimize costs.

While spending less can help you save money in the short term, wise spending considers the bigger picture. By making informed financial decisions, allocate your funds strategically, get the most value out of your purchases, and unlock savings opportunities. Spending wisely also allows you to extend your travel funds, enabling you to travel further and longer.

Tired of reading? Listen to this podcast episode on YouTube.

5 Ways To Spend Money Wisely As Financially Savvy Traveler

Maximize your travel budget like a pro with these five smart strategies for making wise spending decisions.

Familiarize yourself with the rules and policies of airlines, hotels, and other travel providers. Understanding your rights and entitlements will empower you to make better decisions and advocate for yourself when necessary.

When you know what you are entitled to, you are able to make better, more informed decisions because you know the rules. Danielle Desir Corbett

Track and compare prices to establish a baseline for what constitutes a good deal. This will help you recognize when something is truly on sale and worth investing in.

Take the time to research your destination, including currency, tipping culture, and average costs. I have an entire section of my site dedicated to trip cost breakdowns . Planning ahead allows you to budget accurately and make intentional money decisions about where to allocate your funds.

Listen to this podcast episode on Spotify.

Record your expenses and conduct a trip cost debrief when you return home. Analyze your spending habits and identify areas where you can adjust, reduce, or eliminate expenses for future trips.

If you don’t take a step back when you come back from a vacation and really look at your spending, you won’t realize where you could have saved or where maybe you were a little bit wasteful.” Danielle Desir Corbett

Subscribe to newsletters and follow trusted travel sources to stay informed about industry news, promotions, and travel rewards. Keeping up with travel news will help you make informed decisions and take advantage of opportunities to save money.

Some of my favorite trusted sources for up-to-date travel news are newsletters that provide valuable insights and updates on various aspects of the travel industry. Here are a few of my favorite travel newsletters.

The Points Guy : This newsletter is perfect for those looking to maximize their travel rewards. It offers tips, strategies for earning and redeeming points, travel updates, and industry news. Whether you’re interested in airline miles, hotel points, or credit card rewards, The Points Guy has you covered.

Thrifty Traveler : If you’re searching for cheap flights , Thrifty Traveler is the newsletter for you. It provides regular updates on flight deals and offers tips on how to find the best prices for your next trip. Whether you’re planning a domestic getaway or an international adventure, Thrifty Traveler can help you save money on airfare.

Listen to this podcast episode where I interview the founder of Thrifty Traveler, Jared Kamrowski .

The Airline Observer by Brian Sumers: The Airline Observer is a must-read for those interested in airline business news and analysis. This newsletter dives deep into the inner workings of the airline industry, providing insights into mergers, acquisitions, and other industry developments. Stay informed about the latest trends and changes in the airline world with this informative travel newsletter.

Hotel Addict : If you’re a hotel enthusiast or simply want to stay updated on the latest hotel news, reviews, and trends, Hotel Addict is the perfect newsletter. It covers everything from new hotel openings to renovations, as well as insider tips and recommendations for finding the best accommodations for your travels. Stay in the know about the latest developments in the hotel industry with Hotel Addict.

Whether you’re looking to maximize your travel rewards, find cheap flights, stay updated on airline business news, or stay in the know about the hotel industry, these newsletters have you covered.

Next, I encourage you to continue binging the series:

What People Get Wrong About Financially Savvy Travel – Episode 148

How Money Mindfulness Can Help You Travel More Next Year – Episode 149

If you’ve enjoyed my take, you’ll love my new book, We Are Financially Savvy Travelers . It’s chock full of insights to help you become more financially mindful and travel more without compromising your money goals.

Available on Amazon , Barnes & Noble , Apple Books , and your local library. Yes, ask your local library to order the book!

Also, check out my other travel books!

Other Content You’ll Enjoy

• Why You Need a Travel Fund – Episode 2
• How To Define Your Travel Style – Episode 102 
• How I Became a Financially Savvy Traveler – Episode 69

Danielle Desir Corbett paid off $63,000 of student loan debt in 4 years, bought a house at 27, and has traveled to 27 countries, including her favorites, Iceland, China, and Bermuda. Go here to learn Danielle’s incredible story, from struggling financially and in debt to finding creative ways to earn more and live on her terms. Listen to The Thought Card Podcast , where Danielle shares how you can creatively travel more and build wealth regardless of your current financial situation. Reach out to Danielle by contacting: thethoughtcard (at) gmail (dot) com.

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10 Tips to Spend Money Wisely

W e all want to be wise with our money, right? Sounds good in theory, but how do you actually put it into practice? Let’s take action today. These quick, little improvements can have a big impact over time.

I’ve used better spending habits to help me go from a zero net worth to having over a million saved. Let’s improve your spending today with these ten tips on how to spend money wisely:

1. Make a list of what you value.

The best way to spend more wisely is to align your spending with your values .

Are you even aware of your personal values?

Take a moment to write down the things that are most important to you in life. Is it security for your family? Is it success in business? Is it helping others?

Like me ( see my values ), you likely have a combination of values.

Write these values down and then ask yourself this question: “am I spending my money on things I value?”

Then, ask “am I spending my money on things that aren’t in my value system?”

Doing this little exercise will give you some clarity and help to guide you into thinking consciously about your spending.

2. Make a list of things you really enjoy.

Along the same lines as #1, you should be using your money to bring joy to your life. You define what “joy” is. Go ahead and write that down.

What brings you happiness? Identify those things and then ask yourself if you are spending your money in those areas. More importantly, ask yourself why you are spending on things that aren’t on that list.

Bottom line: avoid spending too much money on things that aren’t at the top of your “joy” list.

Related: It’s Okay to Spend Your Money on Things You Really Want

3. Make a list of places, things, or people that cause you to make poor spending choices.

Can you identify the triggers to poor spending in your life?

Think about your spending over the past couple of weeks.

• When did you make the worst decisions (i.e., spending money you didn’t have, spending on things you don’t value, etc.)?
• What was the cause of your poor choice?

If you can identify these weak points, then you can begin to live your life in a way that helps to avoid some of these spending hot spots.

“Too many people spend money they earned..to buy things they don’t want..to impress people that they don’t like.” –Will Rogers

4. Review your regular spending for things to eliminate.

When was the last time you wrote down your list of monthly bills? Take a moment to do a thorough spending review now.

List out all of your required spending for the month. This includes rent or mortgage, insurance, debt payments, utilities, services, etc.

Is there anything on that list that you don’t need or want?

It sounds absurd to ask such a question. However, I’ll be the first to admit that in the past, there were things on my list of monthly expenses that I didn’t need or want anymore.

Odds are you have one or two yourself. If you find something to eliminate, do it. There are several negotiation apps can help you identify expenses you may be able to eliminate.

5. Review your regular spending to identify things to reduce.

Next, take a second look at that list of monthly bills and see if there is a way to reduce the cost of any of them.

• Could you call the provider and ask for a better rate?
• Could you call a competing provider to see if you can reduce your rates by switching?

If it’s a debt, could you do a balance transfer or consolidation that would help you reduce your rates and eliminate debt more quickly?

6. Create a budget.

On a basic level, a budget is simply a plan for your money. If you know your expected income next month, write that number down. Then start applying that money to different things.

Start with taxes (if it isn’t already taken out), giving, and savings. Then move to basic necessities: housing, food, insurance, utilities, and transportation. Finally, apply the rest of your income to other things you need or want.

Open up an account with an online budgeting tool like Mint.com to streamline this process.

7. Start writing down each purchase you make.

Tracking brings awareness to any situation. Use your iPhone or another device to take spending notes throughout the day. There are Apps for that I’m sure.

Or simply carry around an old-school pad and pen to jot down your spending. Do this for a week and see if your spending improves.

Related: Use These Psychological Tricks to Spend Money Wisely

8. Switch to only cash.

If you have a severe problem with credit spending, this is the way to go. Some folks swear by this method even if they don’t necessarily have trouble with credit cards.

Like tracking your spending, going to a cash-only system , if only for a week, will bring a heightened consciousness level to your spending.

9. Implement a “sleep on it” rule.

Decide today that for any purchase over X amount, you will “sleep on it.” It could be one night, a week, thirty days, whatever.

Just allow some breathing room between your desire and your decision to buy. Obviously, this gives you time to evaluate the purchase against your values and your budget.

10. Put future spending on a calendar.

Pull out a calendar and look at your upcoming events and life changes. Will spending be necessary? Is so, then make a note of that and start building a list of future spending requirements.

This is somewhat different from a monthly budget because it looks a bit further out. This does two things: (1) it allows you to prepare by saving for the spending requirement, and (2) it allows you time to shop around for the best price and lock in the lowest rates.

Have more tips? Add them to the comments below.

Philip Taylor is a CPA, writer, entrepreneur, and founder of FinCon. Philip has been quoted and featured in multiple media outlets including The New York Times , The Washington Post , Forbes , Fox Business , and more . Connect with him on Twitter or LinkedIn .

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13 Comments

Sounds very complicated but with determination and right amount of discipline this is surely doable.

These are really great points! The sleep on it rule is really my favorite! It works best together with being aware of your budget!

Interesting story, Janette. Thanks for sharing.

Actually, if you tend to use a debit card (as I do), you don’t need to write down every purchase so much as keep your receipts.

Recently took a trip with only cash (#8). It was a bit scary to carry that much cash. What I found was the amount I spent on the trip was much less than normal. I paid for EVERYTHING in cash- from gas to hotel room to eating out to groceries. Next time I will just put $1000 in an account with a debt card, but I needed to know what it felt like to touch the money We travel to see family four to six times a year (#10). They all live between 1500 and 2000 miles from us. We spend, on an average, $1500 for the two of us on each trip. Now that we are retired, knowing that budget is important and paying in cash is the best way to handle it for me. After this trip I really realized that going on “other travel trips” (#3) are nearly impossible if our priority is to stay where we are and still see our family. We no longer journey to Target or the mall in our spare time (#3).The children, mom and grand baby are all worth it!(#1and 2). Well written numbered list!

Swith to only cash – you mentioned this is good for people who struggle with credit cards, but it’s also great if you struggle with DEBIT cards. We always seem to have enough in our checking account to spend on misc items with our debit card, but that money was allocated towards something else in our budget. Plus research shows that when you “swipe” your card to pay (debit or credit), you spend MORE money on purchases, many times without even remembering how much you actually spent. It’s much harder to part with cash. You can see it and feel it dwindling in your pocket (or envelope) as you spend it, knowing it won’t be replaced until the next budget cycle.

@Jason – Excellent point. I didn’t think about that but yes, long after you’ve stopped tracking you’ll have better awareness in general. @Jon – Some recommend a 30 day rule for larger purchases.

I like cash-only.

#9 is the single best piece of advice I have heard. Sleeping on it has saved me a nice sum of money. Typically, I end up waking up and realizing that I don’t really need to buy it!

I think the 7th rule is the best, because that way you actually think about what you’ve done instead of just forgetting about it. This will create valuable spending habits in the future.

love the “sleep on it rule.” Saved me bunches.

The sleep on it rule has always been a huge money saver for me! Even better is to have to save for it. I’ve always waited to buy big purchases until I’ve had the money and tried to find it online cheaper in the meantime!

At some point, we all need to create a budget to control our spending. This blog is actually helpful helpful to analyse my expenditure and sections where I can control my transactions. Someday, I might want to try the online budgeting tool to ease the process. I will need some dedication to follow these steps, but will surely try my best.

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Stay connected, 20 tips on how to manage money wisely.

Money is one of the most important aspects of our lives, yet many people do not know how to manage it properly. In this blog post, we will discuss tips on growing your money and making it work for you! We’ll cover everything from budgeting and saving to investing and retirement planning.

So whether you’re just starting with your finances or looking for ways to improve them, read on for some helpful advice!

Money management is an essential skill that everyone should learn because it is the key to financial freedom. We all want financial freedom, but it is tough to achieve without learning how to manage money wisely.

Things are not always what they seem, so I advise you to have an open mind. Learn from the tips listed here, and you will be well on your way to financial security.

How to Manage Money Wisely

The following tips are essential in managing money wisely.

1. Create a realistic monthly budget

When learning to manage money wisely, the first step is creating a realistic monthly budget. This will help you control your income and expenses to save more money for the future.

It also helps you realize where your money is going. There are lots of budgeting apps out there that are free or paid, depending on your preference.

2. Know where your money goes

If you are too clueless about where your money goes every month, then it is time to do a quick research. Make sure that you can answer why some expenses are necessary and which ones are not.

By doing this, you will find out where your money will get complete control of your finances.

You will realize how and where your money is being spent.

3. Build up your savings even if it takes time

Another great tip for managing money wisely is to build up your savings . It would help if you learned that the more you save, the better it is for future investments.

Don’t worry about starting small because there are many ways to do this, like with the help of your emergency fund or by putting aside some amount every time you get paid.

Building substantial savings may take a lot of time, but it is worth the effort.

4. Start an investment strategy.

The right time for you to invest is now. It would help if you learned that time is helping you because even small investments can accumulate over the years.

Do not forget that you also earn dividends when you invest in some assets, which will help increase their value even more after a while. By retiring, you will have a lot of money to live a whole life without worrying about financial needs.

5. Get a grip on taxes

Paying taxes is part of life, but you must learn how to manage money wisely.

While you can’t avoid taxes, you can manage them better by learning about tax benefits, tax credits, and other things related to paying fewer taxes.

This step is necessary because it will help you save more money that you can use for other essential things.

6. Start saving for retirement

To enjoy life after work, you must learn how to manage money wisely.

You can do several things, like starting an IRA or joining a retirement plan that your company provides. This will help you build more money for the future because it includes long-term investment opportunities.

You will thank yourself later when you are already retired because of the amount your investment managers will hand over to you.

7. Learn self-control

You might think that self-control is not essential, but I beg to differ.

This skill is necessary because it helps you realize the right things you should do with your money.

So, what are they? It would help if you learned not to indulge in unnecessary things like buying expensive gadgets or getting into unplanned shopping sprees. If this happens, it will significantly impact your finances and allow you to accomplish your financial goals.

8. Start an emergency fund

You need to save money for emergencies because unexpected things may happen.

It would help if you learned how to manage money wisely by creating an emergency fund to help deal with financial needs during hard times.

This will allow you to feel relaxed and not worry about anything because you already have a backup plan.

When you are in debt, you must manage your money wisely to get out of it. With this, I advise you to cut down on your spending and only buy the things for your survival.

Do not forget about credit card debt because it can lead to more significant issues if not settled on time.

Credit cards have a higher interest rate than other debts, so you must pay them off as soon as possible. This will prevent you from incurring more debt and can save a lot of money instead.

9. Protect your wealth

After building up your wealth, you must learn how to protect it.

One of the best things you can do is buy insurance coverage so you will have fewer worries if financial needs arise.

Various insurance policies, including life insurance, health insurance, and other types, suit your needs.

It is tough to build wealth but very easy to lose when you have unprotected wealth. So, take the necessary measures to keep your wealth safe.

10. Protect your health

What is more important than your health?

It would help if you learned how to manage money wisely by protecting your health. One of the best ways to do this is to ensure that you are physically fit, eat healthily and live a balanced life without stress or anxiety.

This will allow you to stay financially stable because these things can happen when you don’t take care of your health properly.

11. Save money to afford big purchases.

Another step that you need to take to manage money wisely is saving up for big purchases.

For instance, if you want to buy a house in the future, you must prepare because homes can be costly. This will allow you not to break the bank and get into debt while buying one.

You will realize the importance of learning how to manage money wisely when things like this happen.

You must build a solid savings account to achieve your financial goals in the future without straining yourself too much. This will require discipline and determination, but it’s worth it in the end.

12. Track your spending to improve your finances

You need to know where your money is going to track it properly.

If you think you are spending too much on unnecessary things, it’s about time for you to go back and see if there are still changes that can be made to save more. This will require self-discipline because no one’s perfect.

However, you can still do this if you want to improve your finances because it will lead to positive results, eventually.

13. Control your financial future

Managing your money wisely starts with understanding how you can improve your current situation.

For instance, if you have a lot of credit card debt, it is about time to pay them off as quickly as possible instead of accumulating more. This will allow you to live within your means and save much money instead of spending it on interests.

14. Cut back on recurring charges

It would help if you also cut back on unnecessary recurring charges such as memberships and subscriptions. Doing this can stop wasting money on things you don’t use or need.

These are just some basic steps you need to take to manage your money wisely and improve your financial situation. If you want to improve your position in terms of money in the future, start now instead.

15. Pay your bills on time every month

This may sound like an obvious step, but some still constantly forget to pay their bills.

If you don’t want to create financial problems for yourself, then it is about time that you learn how to manage money wisely by paying your bills on time every month.

You should set up reminders before or after work, so you don’t forget about them because this will help you avoid unnecessary hassles.

16. Learn how to manage your money better

Financial literacy is critical.

This means that you need to learn how to manage your money wisely because this will allow you to set up good financial habits and become financially independent in the future.

Financial literacy is a lot like teaching someone basic things, such as learning how to read and write for the first time.

Without financial literacy, you won’t improve your financial situation, no matter how much you try.

The only difference is that teaching people basic things about money can take years. Still, financial literacy will only take a few months or weeks, depending on the individual.

17. Set up the proper bank accounts for

It is also essential for you to set up the correct bank accounts for your needs.

For instance, if you want to save more money in the future, open up an online savings account to maximize how much interest it can give you. If this sounds confusing, some professionals are still there who will help you through it.

18. Understand your credit score

Understanding your credit score is also very important.

Suppose you want to improve your financial situation in the future. In that case, you need to understand your credit score before applying for loans or mortgages because this will affect your chances of getting one.

It’s the same as understanding the immediate effects of extreme weather conditions, like floods, heatwaves, earthquakes, and volcanic eruptions. It would be best to prepare before it happens because the results will destructively affect your life.

19. Find an accountability buddy

It is also vital for you to find an accountability buddy to improve your financial situation.

An accountability buddy can help you stay motivated throughout this process because they will encourage and push you towards reaching your goals. This effectively improves your finances because it will significantly boost your willpower.

20. Set the right financial goals for yourself

Setting the right financial goals for yourself is very important as well.

It’s like setting a goal to achieve something, no matter what it takes. This will allow you to improve your financial situation in the future, so you don’t have to live paycheck to paycheck anymore or suffer from unnecessary debts and obligations.

Think about your future because this will allow you to live a better lifestyle without financial problems.

You won’t improve your financial situation if you don’t set the right goals. It will only worsen.

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How to Spend Money Wisely

Posted on October 28, 2021 in Money

There are many ways how to spend money wisely. You can be smart about how much you give away, and when you do so you can also make smart choices about what to buy, and where you go. When you do all these things, you not only save a lot of money, but you also have better experiences with your life.

Table of contents

1. know how much you have to spend, 2. spend your money on things that will benefit you in the long-term, 3. spend your money on necessities first, 4. spend money doing good deeds and for charity, 5. resist the urge to spend money on unnecessary goods & services, 6. prioritize spending money on things you truly value, conclusion on how to spend money wisely.

The first thing that needs to be understood is that we all need money to survive. It’s a part of our lives, whether we like it or not. But knowing how to spend your money and earnings is still a work in progress. Below we cover the top 6 ways how you can spend money wisely to show you the importance of careful money management.

How Can You Spend Your Earnings Wisely?

It is advisable to only spend money on the things you need and allocate a part for pleasure such as food and entertainment. With this method, you will be able to save more money over time. Furthermore, when budgeting your money avoid allocating too much to one thing that might end up not worth it. By learning how and when to spend money wisely, you will be able to save more in the long run.

First of all, when it comes to how to spend money wisely, knowing how much you have to spend is the most important detail here. There are many things that people could buy with 100$ or more, but then there are also things that only costs 5$. That’s just one detail that needs to be understood before you start spending money.

The next thing that you can do is to make sure that you buy things that are worth your money. You should only spend on the things that benefit you, or help you to earn more. Sometimes people end up buying stuff for several hundred dollars, but then never use these items again. These items would have been bought for much cheaper, but if the person spent 200$ on them, then that’s just a huge loss of money.

The next thing to think about is what you’re buying. Sometimes people spend their money on things that they think will bring them happiness in life. But instead, all it does is drag them down and make them feel worse than before. That’s why it is important to spend money wisely and be smart about what you buy, and where. Be sure to always cover your basic needs first , then focus on savings accounts, and then you can start budgeting for entertainment and things that you wanted to have.

You can also spend your money wisely on good deeds for others. Sometimes spending money on yourself becomes too easy. As a result, you start feeling miserable with life because you’re just motivated by your own personal interests all the time. If you only take the time to think about others, and what you can do for them, then you’ll see that doing good deeds is a lot more rewarding than the other things.

People should also make sure that they don’t spend money on unnecessary things. Sometimes people get caught up in the moment and end up buying stuff they don’t need. That’s why money management is key, and it is important to always be prepared before going shopping because you might not know when an opportunity to buy this or that comes along.

The last thing you can do is to know when and where to spend your money wisely. For example, you could go to the cinema with a friend, or take her out for dinner afterward. But if these things aren’t important in your life, then you should avoid them because they will eventually make you feel unhappy and dissatisfied with yourself. Try simpler and cheaper kinds of entertainment like online games or sports. If you’re into sports, you might want to try out your luck and prediction skills on online sports betting. Nowadays, it is easy to find good sites offering fair deals and useful tips. You can go to the internet and search for the best betting companies and just start from there. As long as you do it responsibly, it might even save you some money or even get some if you’re lucky. 

Knowing how and when to spend your money is an important skill that everyone should learn. You may even wish to leverage an all-in-one money app like SmartCredit to help you stay on track. By understanding how to spend your money, you will free up more time and energy for other things in life. This way, not only will you save a lot of cash, but you will also be able to enjoy yourself because there are so many great opportunities out there.

It’s all about understanding your priorities and how much money you need to spend on the things that matter. By mastering this skill, you will be able to live a more enjoyable life because you know exactly what it is that makes you feel better. So why not take a step back and start rethinking how you can improve your budgeting skills and spend your money wisely?

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How to Manage Your Money as a Student

• Categories: Money Personal Finance

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Published: Feb 8, 2022

Words: 824 | Pages: 2 | 5 min read

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8 tips for spending time wisely, the idea behind the expression "time is money.".

Posted April 6, 2020

Time and money are arguably life’s most valuable resources. One of the great laws of economics is that time equals money. What really matters is to spend it wisely. In fact, you can spend no money but your time as a gift, such as time spent with family.

The phrase "time is money" is usually credited to Benjamin Franklin, who used it in an essay ( Advice to a Young Tradesman , 1748). It means time is a valuable resource. He encouraged people to treat time like money. However, most people think about time and money in vastly different ways.

1. Time is our most scarce resource. Time is the ultimate scarce resource, yet we act as if we have unlimited time. Poor or rich, we all have 24 hours a day, 7 days a week. Thus, each of us faces the choice of how to spend our time. In a world of scarcity, choosing one thing means not being able to do something else.

2. The price of convenience. In economics, price is a much broader concept. Price includes not only the monetary cost of purchasing a product but also the time associated with buying that product. For example, overnight delivery, and convenience stores all charge premiums because of the inherent value we place on our time.

3. The value of time varies from person to person. Time is relatively scarce for people with higher incomes, partly because their time is more valuable. So, to have lots of time, rich people hire other people to do their, say, household chores. On the other hand, a nonworking person may spend more time on household chores.

4. The value of time in good economic times. The value of time is higher during good economic times. Evidence shows that people tend not to take care of themselves in boom times (Ruhm, 2007). For example, a 1 percent decrease in the unemployment rate corresponds to an additional 3,900 deaths in the United States in a given year. People tend to drink too much, eat out often, exercise less, and skip medical check-ups because of work-related time commitments. So people work more and do less of the things that are good for them. On the other hand, in bad economic times health-enhancing activities such as exercise and social interactions increase.

5. Price of delay. People are not equally patient. Some like the present, others like the future. A myopic person ranks immediate pleasure much higher than valuable delayed rewards. For example, social media is immediately available, and it is the cheapest way of avoiding boredom . In contrast, reading and conversation are demanding in terms of effort and motivation .

6. Cultural attitude toward time. Attitudes toward time and its value differ across cultures (Levine, 1997). For example, being late for an appointment, or taking a long time to get down to business, is the accepted norm in most Middle Eastern and some Asian counties. People in bigger cities walk faster than their counterparts in smaller cities. And while in a grocery store, they spent less time chatting with clerks and other shoppers.

7. Time cannot be stored. One of the reasons we give little thought about how we use our limited resources is that we cannot save time. Time moves on whether we choose to spend it or not. You can’t bottle time and exchange it for an object or event. However, when people are made aware of their mortality they wonder if they did make the most of their lives.

8. Buying time to promote happiness . What you do with your time also matters for your day-to-day moods. You can improve your happiness by putting your money where you spend most of your time (Whillans et al., 2017). For example, buying a new pillow or a nice bed could help you to get a good night’s rest. You can also outsource “disliked” tasks. This can allow you to maximize the time you get to do the things you love (e.g., cooking) and minimize the time you have to spend doing what you hate (e.g., gift-wrapping, housecleaning).

In sum, time is anything but free. As a nonrenewable resource, time is quite expensive. Some people fail to realize that time is scarce, hence oblivious about its opportunity cost. They do their best to think of their time as unlimited, and unlimited goods have little value. Knowing that time is finite encourages us to ask how we are using our time. Do we want to spend these precious moments on social media or spend that time learning something new? Skills and knowledge take time so the more time you spend on them, the more you improve.

Levine, R. V. (2020). Time and culture. In R. Biswas-Diener & E. Diener (Eds), Noba textbook series: Psychology. Champaign, IL: DEF publishers.

Ruhm CJ. (2007) A healthy economy can break your heart. Demography. Nov;44(4):829-48.

Whillans, A. V., Weidman, A. C., & Dunn, E. W. (2016). Valuing time over money is associated with greater happiness. Social Psychological and Personality Science, 7(3), 213-222.

Shahram Heshmat, Ph.D., is an associate professor emeritus of health economics of addiction at the University of Illinois at Springfield.

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Sample toefl essay – spending money, the question.

Some people like to spend their money as soon as they earn it, while others think it is better to save their money for some time in the future. Which do you prefer? Use specific reasons and examples to support your opinion. Do not use memorized examples.

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The Sample Essay

           Money concerns are a major cause of stress and anxiety in the modern world. In my opinion, it is a really wise idea to save money for the future.  I feel this way for two main reasons, which I will explore in the following essay.

           To begin with, older people are able to make better financial decisions than youngsters due to their experience and maturity.  Young people, who have very little worldliness, are prone to spending their money on products that are mostly useless and which they quickly tire of.  Older people, on the other hand, know which purchases will result in long-term happiness and satisfaction. My own experience is a compelling example of this.  When I was young, I spent a tremendous amount of money on video games and comic books which I enjoyed only for a short time. Later, when I enrolled in university, I did not have enough savings to pay for my tuition, and was forced to take out a significant number of student loans.  Even today, several years after graduation, I regret not saving much money as a teenager. These days I am a lot more conservative when it comes to spending, and carefully consider all of my future expenses.

           Secondly, life is full of unexpected emergencies which can cause a lot of anxiety if we do not have a lot of money saved up.  According to reports in the media, more than seventy-five percent of all bankruptcies in my country are the result of medical bills. I am totally aware that it is humiliating to lose our financial independence in this way.  For example, last year my uncle suffered a major heart attack which required him to undergo very expensive cardiac surgery. He did not have enough money to pay for this procedure, so he had to ask his elderly parents for a loan.  They were able to help him because they had resisted the urge to spend and saved money through their entire lives. He felt extremely embarrassed about begging his parents for assistance, especially as he could have avoided the situation by emulating their frugal behavior.

           In conclusion, I believe that it is better to save money for the future rather than spend it right away.  I feel this way because we gain the ability to make better financial decisions as we mature, and because saving money helps us avoid the humiliating effects of unexpected financial emergencies. (405 words)

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How I Spent My Pocket Money (Essay Sample)

Table of Contents

Introduction

If you had your own pocket money, how would you spend it?

This essay focuses on how to spend money, and how to do so wisely. In this piece, we share a person’s experience of being taught to spend money wisely and what he would buy when he was given a regular allowance.

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How I Spend My Money essay

One of the most exciting events in a young one’s life is when their parents give them an allowance. No matter the amount, an allowance gives us the opportunity to spend on small things that make us happy as a child.

The joy that an allowance brings is more than just the amount itself. It’s really rooted in the experience one gets in choosing how to spend it. First, there’s the anticipation of receiving an allowance. Next, there’s the excitement of thinking about all the things you’ve been wanting to get for yourself. Third, there’s the delight of actually receiving the allowance. Finally, there’s the sheer thrill of choosing what to buy and taking it home.

How and when an allowance is given, and how much is gifted to the child, depends on the guardians’ principles. There are those who provide an allowance for children to buy basic needs. But there are some who might give a little extra to give the child an opportunity to learn how to handle money well.

It must be said that not all children are privileged to have an allowance to spend on themselves. If they come from a poor family, the guardians may not have any extra finances to give. They may save up for this just once in a while.

I am very blessed that my parents gave me an allowance on a regular basis. My allowance has really taught me financial stewardship at a very young age. They also allowed me to make decisions regarding my finances, even if I made mistakes.

Saving Money at a Young Age

While my allowance isn’t a fixed amount, I have since learned that the first thing I should do is set aside a portion of it for savings. I get a third of whatever amount I get and earmark it for saving.

To make sure that I won’t be tempted to use it, my mom helped me open a bank account where I deposit the money. They opened a time deposit account, which means I cannot just withdraw from it anytime. Whenever I hesitated to go to the bank, my dad would remind me that my small deposits would turn into one big bulk of cash that could someday be used for a rainy day, or for strategic investments.

How I Spend Money with Whatever is Left

With what’s left of my allowance, I usually buy books. These are mainly documentary magazines, which I read during my leisure time. It is actually one of my hobbies. I have made it a personal tradition to always purchase a documentary magazine each time I get my regular allowance. I particularly enjoy news magazines and feature magazines. I am a lover of general knowledge. I love knowing about everything, how and why things are the way they are – whether about nature, politics, science, or geography. It is always a first on my list of hobbies.

The other bit of my regular allowance goes towards the purchase of snacks. I love yogurt and ice cream. The refrigerator at home always has a shelf specifically reserved for my yogurts.

The remainder of my allowance goes towards others. These include my family and friends. I try to buy them something nice as a way of thanking them for taking good care of me.

I also go out of the way to purchase some gifts for my siblings as well as my parents. I want to gift them with simple things, even if they were the ones who gave me my allowance. Doing this for them gives me so much satisfaction since I love making them happy. After all, what is life without happy family and friends?

Regular allowances taught me how to make wise spending decisions. I know how to handle and spend my cash, whatever amount it might be. Therefore, I am confident that when I start handling larger amounts of money in the future, I won’t be as overwhelmed. I will make it a point to remember the financial lessons I’ve learned as a child. I hope to also be able to teach others who to use their money wisely.

Short Essay About What You Would Spend Your Money On

Did you grow up being taught about the value of saving money? If you were like me, your mom and dad probably gave you a regular allowance. They also probably gave you free rein to use your money in whatever way.

Growing up, I deposited regular amounts into my savings account the moment my allowance was handed to me. I did not want to be tempted to splurge on all the food I was craving for while holding all of my money. Personally, apart from fast food, I enjoyed treating myself to books. In fact, I made it a regular tradition to purchase a book every time I got my allowance.

I remember being taught how to make a personal budget out of my allowance. Exactly how much money was given to me didn’t matter as much as the main principle they passed on: save money. They didn’t care if I used the rest of my allowance on junk food or other types of impulse buying. All that mattered to them was whether or not I set aside a portion to put in a savings account. And so I did.

How To Write An Essay About Money

There are so many ways to write a piece about finances. It depends on the lens you are viewing the topic from. Are you an adult looking back at your childhood and remembering important lessons learned? Are you a financial expert looking to give some advice on how to maximize your cash? Are you a student wanting to teach people how to set aside an amount in case of an emergency? Are you a parent who discovered creative hacks in your finances to make ends meet? Find your angle and work it.

How To Spend Money Wisely As A Teenager

When you are young and still living under your guardians’ roof, thinking about contingencies or other things you may be needing to buy before your next allowance comes may not come naturally to you. It is so important to learn how to handle your personal finances even at that age because that sets the direction of your spending in the future. When you start getting a monthly income, the weight of the responsibility is even greater as you start to live independently. Even as a teenager, learn to set financial goals and think of the long game. Even if you have to put money inside a piggy bank to avoid temptation, do so. Track your expenses and make adjustments according to your level of contentment. Learn the art of investing from an expert. Finally, don’t shop ’till you drop. It’s a trap.