Every day in one’s life there is a reason to spend money.
You cannot stop spending money because money functions as a medium for exchange; a unit of account; a store of value; and sometimes a standard for deferred payment.
We live in a time of consumerism, so a lot of people out there are trying to sell you things you don’t even need, but they are making compelling cases so that you end up becoming a customer.
Due to these reasons, managing finances becomes more challenging. We can ensure that the money we make is been spent wisely.
The art is not in making money but how it is been spent is key, because your spending habit has a strong effect on your financial security in the future.
Here are the 6 best ways to spend money prudently…
1] Do not spend more than you earn
You know how much you earn, do not buy things for the sake of buying, as this is a trend today people just buy things they do not actually need.
Plan out your budget around your income. The world is changing every day it is important to have more than a stream of income to meet your needs.
2] Figure out your priorities
You do not have the income to acquire everything you want in life, you just have to give attention to those that are important.
The concept of the scale of preference in economics is important here.
This helps to prioritize the needs and wants of an individual. I will give an example: A man has 12000 dollars. He has a child, who needs of 9000dollars for tuition fees.
He wants to buy a smart TV for 4000dollars. Education is the utmost priority for parents, so he picks the first on the list. This is how the scale of preference helps you in working out your priority.
3] Be disciplined when you go to stores to buy things
Ensure before you leave home, a list of items needed has been prepared and stick to it.
Do not be carried away with beautiful things that have been well arranged on shelves in the store and you start picking them.
All those beautifully arranged items is a strategy by the seller to get peoples attention.
Do not fall into it.
4] Be self-dependent financially
There are times you could be going through a tough financial patch in life, that you will need assistance from friends and family.
Sure thing there could be friends, relatives that can borrow you money but do not make it a habit of depending on others for money.
If what you want to borrow money for can wait, until you pull through the financial difficulty, then let it wait.
We live in a world today where you can make extra cash by completing the survey, this can come in very handy.
5] Do an in-depth groundwork before key decisions
In life, situations will arise when you have to take an important decision. Absolute care should be taken when you want to make that big investment because it can either make or mar you.
It is important you carry out thorough research before investing. Go online for research on the potential investment. Also seek information from close friends and relatives that genuinely cares about you, furthermore consult your financial advisor.
6] Do it yourself at home
You like eating pizza or drinking freshly prepared tiger nut juice. Why not try preparing it at home. you don’t know how to prepare it, there are videos on youtube that will teach you. This will help take a fraction of the money spent buying it out.