While it may sound obvious, the secret to successful saving is learning how to control your spending. Frugality will help you keep your budget and financial goals on-track. But controlled spending can be tough. Everything around you, from your television to your smartphone and billboards are compelling you to buy or experience something new and exciting.
Overspending, even accidental, can increase your debt burden and jeopardize your financial security. Thankfully, a mindful spending approach can help you stick to your savings goals! These four questions will help you figure out when a purchase is right for you, and when you should keep your funds for another day:
Do I need this? How would you categorize a potential purchase? Does it qualify as a necessity or is it mostly an item you want? Your budget will ideally comprise 50 percent necessity spending, 30 percent personal spending, and 20 percent savings. Before you make any personal purchases, assess if there is room in your budget this month. In addition, keep in mind that if you will be choosing this particular purchase, you may not be able to afford other reward purchases later.
Do I need these funds? Do you currently have an emergency fund? If you do not, then limit your reward and personal spending until you have established a financial foundation for yourself. Similarly, if you’re currently in credit card debt, financial experts recommend prioritizing credit card repayments over additional splurge spending. It is also important to keep in mind that the funds you are spending on this purchase could otherwise go toward your bigger future financial goals. For example, being debt-free and owning a home are often said to be two of the greatest forms of peace of mind!
Do I have to spend this much? If you see a beautiful item in a store, remind yourself that there are usually more affordable ways to have something similar. Do research to see if other stores are offering similar pieces for lower prices. Thanks to the internet and how-to videos, more and more individuals are also saving money by learning how to make their own crafts, home goods, and cleaning products themselves.
Does it bring me happiness? A tidy, streamlined living space can truly improve your health and happiness. In addition to an item’s price, think about the space it will occupy. When you look at this purchase months down the road, will it still give you the same amount of joy you felt when you first bought it? If there is a good chance this purchase will become another frustrating parcel of clutter, reserve your spending for purchases that will truly make a long-lasting benefit to your quality of life and your bottom line.
You deserve to reward yourself every once in a while. Of course, your reward will be even sweeter if you can reduce the cost to something that fits your spending budget as well!
Learn more ways to save and build your financial foundation at the Syncis Money Blog.