While it’s a challenge to practice controlled spending every day, keep in mind that spending money you meant to save, or worse, money you don’t have to begin with, can jeopardize your financial progress!
If you’re unsure whether or not you can afford something, use these three tips to determine if you should spend:
- Consult the Budget: If you make this purchase, will you still have room in your budget to save for your financial goals? Our budgets will ideally give us 30% of our paychecks for discretionary spending, and leave at least 20% for savings. If this price tag does not keep you within the amounts allotted in your budget, rethink it.
- Strategic Spending: Just because you have the cash in your account doesn’t mean you need to spend it! The secret to success is a frugal mindset. You want to live within your means, which includes focusing on buying necessities. If you’re considering spending on a fun splurge, remember to reward yourself in moderation.
- Careful with Credit: A credit card purchase can be quick and painless. If you don’t have room in your budget to pay your card balance down to zero at the end of each month, however, your purchase will gather interest, increasing your debt and decreasing your financial security. The verdict? This purchase might not be affordable at this time.
A positive mindset goes a long way! Work with the frugal budget you have today, and be confident that someday, your financial discipline will make it possible for you to afford what truly counts to you, whether that be a new home, or the fulfillment of an overall sense of financial freedom. To learn more about how to improve your financial life, visit Syncis at https://www.syncis.com/blog/