Now that you’ve got more money, what are you going to do with it? Increase your savings? Pay off debt? Buy that boat you’ve always wanted? Whatever you choose, remember that how you spend your money matters just as much as how much of it you have. These six ways to spend your money more effectively will help keep your finances in good order, whether you’re trying to save, borrow, or invest wisely.
1) Learn your personality type
If you know your personality type, you can learn what kind of spending behavior is likely to work best for you. For example, if you’re a spender, you might benefit from setting a budget and sticking to it. Or if you’re a saver, you might do better by looking for ways to get the most bang for your buck.
Track your spending. Before you can change your spending habits, you need to know where your money is going.
2) Set realistic goals
When it comes to setting goals, be realistic. If you want to save money, don’t set a goal of saving $10,000 in one month. That’s not going to happen. Set a goal that you can reasonably achieve, such as $500 in one month. Once you reach that goal, you can set a new, more ambitious goal.
3) Budget Yourself
When it comes to your personal finances, one of the most important things you can do is budget yourself. By creating a budget, you will be able to see exactly where your money is going and make adjustments accordingly. Here are five tips for budgeting effectively
4) Make rules for spending money on yourself
- Figure out what you need and what you want.
- Make a budget and stick to it.
- Know when to splurge and when to save.
- Shop around for the best deals.
- Be mindful of your spending habits.
5) Know when you’re being influenced by emotions
We’ve all been there – we see something we want and we just have to have it. But more often than not, these types of purchases are driven by emotions rather than logic. The next time you’re feeling the urge to splurge, ask yourself if you really need the item or if you’re just being influenced by emotions.
6) Start saving early
One of the best ways to save money is to start early. The sooner you start saving, the more time your money has to grow. And, the more money you have saved, the easier it is to make ends meet when unexpected expenses come up.