How to spend money wisely — 9 habits to spend shamelessly. You don’t have to feel bad about spending as long as you follow these habits.
Around the personal finance community, we talk a lot about saving money and not spending money.
But we don’t talk enough about how to spend money wisely. Spending money is sort of frowned upon.
We’re supposed to walk around proudly with holes in our shoes and clothes, right?
Not in my view.
Money is a bartering system to buy things we need and want. It’s meant to be spent.
However, it’s also meant to be saved and invested.
The key is to find a balance between saving and spending that suits your lifestyle and also lines up with your long-term goals.
One must learn how to spend money wisely in order to properly save money and build wealth.
In this post, I will teach you how to spend money wisely and help you learn habits to get there.
Let’s dive into the habits.
How To Spend Money Wisely
How To Spend Money Wisely
Think About Value
When it comes to spending money wisely, the main thing to remember is to focus on buying what you value.
If it’s valuable to you, it’s likely worth spending money on.
If it doesn’t add specific value to your life, it’s probably not worth spending money on.
In some ways, this requires a person to know who they are to know what they value. So, it can be challenging if you are younger.
Basically, if it will add to your future and you will have something valuable to show for it, it’s worth spending money on. If it will amount to nothing, it’s a detractor to your future.
Sleep On It Before You Buy It
Another simple tactic to spend money wisely is to not be impulsive.
Instead of buying something immediately, sleep on it.
Better yet, think about it for a week to a month. Do some research on it to find out if it’s worth it.
Think about if it will truly add value to your life.
If you still want it after taking some time to think about it, buy it.
You might be able to cut your spending down a bit this way.
How Many Hours Of Work Would It Take To Buy It?
To avoid spending money on something, I consider how many hours of work it would take to buy it.
When you put it in that perspective, it’s easier to assess if the expense is worth it or not.
I use this tactic a lot.
Make Sure You Have The Money To Buy It — Don’t Put It On A Card
Racking up credit card debt and paying interest on something is a horrible idea. It is not a wise way to spend money.
If you’re going to buy something, at least save up enough money to buy it instead of paying for it on a credit card.
If you are forced to save up for what you want, you will learn the value of it. You might realize that some of those things aren’t really worth it.
Budget Every Pay
Spending money is not a bad thing if it’s money you meant to spend.
If you budget every month, you can allocate yourself spending money.
As long as you don’t spend more than you intended to, you are spending money wisely.
A proper budget should include all housing expenses, food, transportation, debt, saving, and spending money.
Grocery Shop Like An Adult
Going out to dinner once per week is nice.
But going out for dinner every day means you are spending too much of your disposable income.
It can also get a bit chaotic and can lead to spending out of control.
Eating out all the time just isn’t a wise way to spend money.
So, grocery shop like an adult to save money on food and to manage your food spending better.
Don’t Waste Money On ATM Fees
Admittedly, I wasted money on ATM fees during my college days when I was a broke student.
Now, I wouldn’t dare allow myself to incur an ATM fee.
Spending extra money on things I don’t have to spend on is not a wise way to spend money.
Don’t waste money on ATM fees!
Related article: How To Reduce Bank Fees: 7 Foolproof Ways To Save Your Hard-Earned Money
Don’t Buy Things Or Clothes To Be Cool
If you are going to spend a lot of money on something, it better be something you are an enthusiast about.
It’s never a good idea to buy material things to be cool.
Not to fit in with the Joneses down the street, the kid from your school, or the flashy coworker.
Buy things because you truly enjoy them or genuinely want them.
Spend What Is Left After Saving
The wisest way to spend money is to spend after saving.
This way, you improve your financial situation and your current life.
As long as you pay yourself first a percentage of your income, you can shamelessly spend the rest and enjoy the things you value.
How To Spend Money Wisely – Final Thoughts
Now you know how to spend money wisely.
As a recap, the main thing to remember is to spend after saving. Pay yourself first a percentage of your income and then shamelessly spend the rest.
Moreover, it’s important to spend on what you value and not on things that make you cool.
Otherwise, you absolutely have to maintain a budget to manage your finances and allocate yourself spending money.
Focus on these three areas, and find the balance between spending and saving that suits your lifestyle and lines up with your long-term goals.
Any other ways you can think of to spend money wisely?
I’d love to hear your thoughts in the comments below.
Related Personal Finance Articles To Check Out
How To Reduce Bank Fees: 7 Foolproof Ways To Save Your Hard-Earned Money
Pay Yourself First – How To Pay Yourself First
I am not a licensed investment or tax adviser. All opinions are my own. This post may contain advertisements by Monumetric. This post may also contain internal links, affiliate links to BizBudding, Amazon, Bluehost, and Questrade, links to trusted external sites, and links to RTC social media accounts.
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Percentage Of Income Saved In August 2021 – 36%
