If you’re not following a budget, you may not be seeing where exactly you’re spending your hard-earned money. You think you spend most of it on food, but a quick look at your statements could show that you’re spending more on luxuries or credit card payments. Without knowing these things, you could be trying and failing to cut back on unwanted expenses. The first step to being more financially literate is to know where your money is going, and to make improvements in your spending habit.
Here are some of the habits you’ll want to revisit :
Making One-time Big-time Purchases
It’s not a big deal if you really have just one big purchase every year or so. But for many, the problem is they don’t track what exactly their big purchases have been, and this leads to them not knowing just how many big purchases they are making. It’s time to dig into your credit card statements to see big ticket items in the last few months. You should have a lower limit for the purchases you’ll consider big. Be realistic when you set this limit, depending on your salary and disposable income.
Buying on Installment
Not everyone is comfortable with one-time, big-time purchases. This is good, because it means you won’t be prone to buying one item that will leave you financially crippled for months. However, you have to make sure that your relationship with installment purchases is also healthy. Buying on installment should not be an excuse for you to buy an expensive item you can’t afford to pay for in cash. Think of all the interest you’ll have to pay, and how much the item will depreciate in value even before you’ve finished paying for it.
Saying No to Things You Like
While it’s good to exercise caution when buying luxuries, you don’t want to deny yourself your simple joys either. There’s a fine line between buying useless things and buying good quality products. Especially for skincare, which you use on the most important part of your body, cosmetics online shopping should not be solely about the price. You should always consider the quality and safety of the product you’re buying–within your budget. Of course, you’ll want to live within your means even as you leave room for skincare. This means quality over quantity in terms of the whole skincare regime, as well. You don’t need to follow a multitude of steps just to get beautiful skin if you can have a simple routine that works best. When you look your best, it will improve your confidence as well, making it worth the expense.
Imagine the freedom to just say yes to anything. Your friends invite you to an out-of-town trip? Your bag is packed. You want that new top? Go for it. You think you can’t live without a pair of the trendiest shoes? Buy it in two colors! But then, your credit card bill will be sky high, and you’ll have to pay for the minimum and accrue interest until you can pay it off. That is not a good future waiting for you if you choose to live an expensive lifestyle that you can’t afford. Rather than watch this happen, make sure you are able to say no to purchases that are not necessary, if you can’t afford them. And even if you can afford them, you should still be mindful of every purchase you make.
Your spending habits can define whether you can successfully save money or just keep losing it. Be mindful of your habits and make the necessary improvements soon.