In a world where there is temptation at every corner and add to that the ease of online shopping and credit cards, it is hard to be wise about spending. However, the truth is that we cannot begin the journey of saving enough and becoming rich until we tame this elephant!
In this section, we will look at some ways, by which you can not only become money mindful but also get some tips on what and how to spend your earnings.
#Tip 1: Plan a monthly budget – Color code the essentials like home, rent, food into as yellow. All luxury spends like restaurants, electronic as red, and the savings as green. This helps you mentally make healthy money choices. Try and get more and more green every month by looking at each expense item and figuring out a cost-saving on it.
Plan shopping & groceries ahead. Buy food staples for the month using bulk discounts available online. Buy Perishables for ¾ days at best in order to avoid spoilage.
#Tip 2: Bucket loans as good loans and bad loans- Good loans are ones where the rate of interest is lower than the interest on fixed deposits. Bad loans have a very high-interest charge and you should pay these off as soon as possible. Eg Credit card bills, SME loans against collateral. A good Credit Score will help you get lower interest rates so pay all loans on time.
#Tip 3: Understand your needs and wants. While needs are justified and essential, wants are many times wasteful. In other words, the larger purpose of spending on wants is to fulfil a desire. While it is not a bad idea to fulfil few of those desires, it may not be wise to spend on all of them at once. Sleep over the urge to buy a new dress or a pair of shoes or that new range of lipstick. Try considering the following-
- Prioritize your most desired things and then pick up 1 or 2 of them a year. It may be that backpacking trip or that new gadget in the market. Choose the ones, which leave a lasting impact. Leave the rest for some other day.
- More importantly, be mindful that you don’t waste essentials. Wasting money is a double-edged sword. Not only are you wasting it, but you are losing out on the opportunity, of making more money on the money.
#Tip 4: Cashbacks and rewards are welcome. While we have mentioned cutting on overspending on wants and desires, we do suggest, you use transaction platforms like e-wallets, credit cards and debit cards wisely. They give you an added benefit of cashbacks, reward points and other added offers, which you can later redeem for other purchases and spends. There are a couple of tools that help you aggregate all your reward points at one place.
To make all these little changes feel even more tempting, think of the larger…oops, the longer picture. Is that you on the cruise ship, lazing under the Meditteranean sea without a care in the world? never did you guess these smart spending habits could help get you there!!!
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