Have you ever noticed how the prices on items have continuously crept higher and higher each year, but you get nothing more for the added cost? In fact, packaging for many items has decreased in size at the same time. When people wonder where their money disappears to, those small changes often go unnoticed and unaccounted for. As everyday costs of living have increased, many people have not seen their wages move in the same direction. In order for most people to save money, there needs to be a strong hold on spending. It takes dedication and restraint to increase spending power with a static income.
Troubles of keeping up with society
Not only do people need to spend smarter, but they also need to get comfortable with not having many things that others have. Your income may not support the cost of having the latest and greatest smartphone. The packages to purchase them are costly (and lock you into that cost for a few years), insurance, data pricing and don’t forget buying apps to go along with it as well. Do you need to have the best television/cable packages? How often do you spend watching those pricey channels? Smart shopping for the best packages which fit your family’s needs is the way to go. If your family doesn't spend much time in front of the television, you may want to offer the family a different entertainment plan. Take the family to the movies once a week and save money. Have you seen the price of cable lately?
Many people get caught up in buying too much car or too much house. Affording the monthly payment is more than having the income to support it. Income must also support all other expenses including previous debt payments with the flexibility to handle emergencies along the way. Would you rather dip into your savings to pay for the high priced oil change, use your credit card to support the cost of appliances breaking down or having nowhere but a payday loan lender to turn to make ends meet? They all work, some better than others; but in the long run, you want to use your income to deter future money problems.
A budget seems like the most reasonable way to organize spending. You can account for every penny earned, but unless you show restraint towards impulse shopping or over buying on credit, you may not be able to fit your budgeted expenses into the static income.
What would you do if you did receive a raise?
*Would you race out and spend it celebrating? Every dollar spent now before you have it will come with interest charges.
*Would you start purchasing the ‘wants’ knowing the extra income will make up for the additional credit payments? Credit cards are often used to increase spending power. Don’t forget that the higher credit card balance will also accrue additional interest each month that you do not pay it off in full. Affording the minimum payment is short-term thinking, looking at the final cost goes one step further in preventing long-term debt.
*Did you think about adding the extra into the savings account to help prepare for future needs? Even if this was an afterthought and you spent first and saved second, be proud that you even thought about it. Even if saving comes in small increments, something is better than nothing. Eventually it will add up to be a significant amount to help out during a money emergency.
Spending smart takes a lot of restraint and dedication to keeping overall costs low. It is hard to put off a purchase until you can afford to pay cash, but it is well worth not creating additional debt in the long run.