When trying to improve your financial management abilities, learning how to spend consciously and responsibly is a very necessary skill. Things like self discipline and strong willpower when it comes to spending are all things we can work on to become better at. No, it’s not the end of the world if you feel you’re not good at them and no, not everybody was born with incredible self control and strong willpower. In this installment of the Money Talks Series I’ll be sharing with you a few things to keep in consideration when shopping or just generally spending money that will keep you in track with your financial goals:
1. Track your spending. We’ve discussed this is previous posts (here and here) and I have to stress how important it is to know where you’re money is going. Having a physical image/list of where you’re spending your money helps you see what your priorities are, what things aren’t priorities but you’re spending more than you need to on and it’ll help you see the changes you might need to make.
2. Set financial goals. It’s always good to set specific financial goals. We’ve discussed the importance of setting goals here and here and how they help you avoid overspending or spending on unnecessary things. Goals in general are always good to help keep you in track. This goal might be wanting to go on a trip somewhere or buying a car or just having enough money to not stress about necessities or not stress in case an emergency comes up.
3. Have a budget. Whether it’s the same one I shared here or one you came up with yourself or one that just fits your lifestyle better, having a budget, like setting goals, helps keep you on track, makes sure your priorities/necessities are taken care of first and help establish discipline in regards to managing your money.
4. Buy in bulk, buy off-brand. Now this one is more specifically for grocery shopping and necessities. Find a sale and buy in bulk whenever you can. You’ll buy a lot at once but it always ends up costing less than if you had to re-buy that item month after month. Buy in bulk whenever you can, don’t be afraid to spend more at the beginning if it’s going to end up saving you money in the long run. I buy a huge container of laundry detergent every 4-5 months. It hurts a little to spend so much on detergent at once on that particular month but then I don’t have to worry about buying it for a long while and it always comes off cheaper then if I’d bought it every month. I try not to buy all my bulk items at once (because that can be expensive for me) but I make sure I get one bulk item a month that way it’s not strenuous on my pockets buying all bulk, all at once.
Secondly, buy off-brand. Sometimes we get too attached to certain brands because we grew up with them or because of marketing but sometimes, all you’re buying is a name and not necessarily a better quality product. Now, I’m all for buying quality because as cheap as some alternatives might be, they might not last you as long and you’ll have to re-buy the item and it’s more costly on the long run but sometimes a brand is just a brand and there are plenty of equality good products from less-known brands. Try them out and see what works for you, just don’t be too caught up on the brand. Worry more about the quality of the product and what’s comfortable for your pockets.
5. Shop with a plan. For groceries, lists make impulsive shopping less likely to occur but also when say, buying clothes or school supplies or anything else you might need, try to always have a list or a shopping plan with exactly what you need and in order of importance. That way, whenever you go shopping you’ll know exactly what you need and that’ll make it less likely for you to buying something on impulse. Randomly “browsing the aisles” is the most dangerous thing anyone could do for their pockets, especially if you’re an impulse buyer like I was. Now I make sure I have a list, go in to the store, grab what I need and get out.
6. Eat before going shopping. I learned this from Whitney and Filipe a long time ago and it seemed so simple at the time yet I wasn’t really conscious about it until then. When you shop for food while you’re hungry you might be more likely to buy “easy to eat” things like cookies and pre-made sandwiches and snacks that you don’t need and are not on your list or to just buy more (in quantity) than you actually need because your eyes and your stomach are making the decisions. Even with a list, you’re more likely to deviate from it if you’re shopping while hungry. Same goes for other necessities like shopping for clothes which you might have budgeted and made a list for, the physical activity of shopping (walking, trying things on and taking them off, etc.) can be exhausting and usually where there’s a mall/store there’s a fast food restaurant or some sort of eatery that you probably didn’t plan for budget wise and if you’re hungry before you even start shopping you’re most likely be tempted to go in and just “have a quick snack” which is most likely not planned for. So just keep that in mind and if you are going to want a snack make sure to remember that and plan for it.
7. Live within your means and then focus on expanding your means. I think we’ve all heard it at least once before, “live below your means” and while that’s great, I was severely disappointed in myself when first trying to do that. Let me explain. I found that going from having no financial plan whatsoever to living below your means (meaning having “leftover” income) was not feasible for me. I had to first learn how to live within my means, meaning not stressing about having leftovers to save and do other things and just focus solely on making sure I got all my needs met with whatever I had first. I would feel really bad when I didn’t have enough left over to save or invest and completely forgot/overlooked the fact that I was actually making progress. At least I was at a place where I had no negative balances on my accounts and that was progress. After I stopped panicking about that and became gradually better at adjusting my expenses, switching to more affordable brands, reducing spending on non-essential items and most importantly, after I found a budget that worked for me, then, I was able to live below my means (meaning I now had enough money left over to save and invest).
The last part of this statement comes from Robert Kiyosaki (you can probably tell I really really like his books by now if you’ve been keeping up with the blog). He advocates living below your means as you get yourself together but to also focus on expanding your means through passive income streams. Focus on making more so you can live more comfortably – having more “means”. Not to be confused with “make more so you can spend more” because that’s not necessarily the outcome we want. You want to continue to spend smart as much as you can. His advice is more so “make more so you don’t have to limit yourself so much” which makes a lot of sense to me. Expand your means so you don’t have to worry about not having enough, so you don’t have to worry about where your next paycheck will come from, expand your means so you can expand your savings and investments, etc.
And these are all the tips I have for now! I’ve used and continue to use all of these and will probably continue to use them until the end of time because they’re tried and true and help keep me disciplined and a bit more conscious on what I want out of life financially and help me see where my money is going. Remember, discipline and self control are all skills and everyone can learn them. It takes time, practice and conscious effort so don’t give up! You can do this!
What are some of the things you always keep in mind in regards to spending money? How do you make sure you stick to your budget? What is your biggest obstacle while shopping? Questions? Comments? Suggestions? Leave them down bellow!