Spending less and saving more is easier said in theory than done in practice. But spending wisely is an important step in achieving the financial freedom you need, to enjoy the lifestyle you constantly dream about. While there is no one-size-fits-all way to cut spending in order to put yourself on the road toward financial freedom, here are some tips to help you take control of your finances:
1. Buy Rationally Not Emotionally
If you are making a purchase, don’t let emotions drive you. Instead, think before you buy. Can I afford this now? Do I need this? Can I get a similar item that can satisfy my need at a more affordable price? I
t’s important to ask yourself these questions (and answer honestly) before making any purchase, particularly when it hasn’t been budgeted for.
2. Consult Your Budget Always
Establish a budget that clearly outlines the items you need and your maximum spending limit for each item. When making purchases ensure you stick to your spending limits. If it’s not on your list, decide if it’s a “NEED” or a “WANT”.
If it’s a want you can afford, plan for it in your next paycheck. If it’s an immediate need, make room in your budget for it.
3. Wait 24hrs Before Spending On Wants
If you are prone to buying things on impulse this tip is extremely important. Giving yourself a minimum of 24 hrs before falling into temptation will provide you enough time to decide if you really need an item or can do without it.
This helps give you more control over your spending triggers and keeps your spending in check.
4. Do Your Research Before Making Large Purchases
A great way to avoid overspending on a product or service is to research products and companies online before making major purchases.
You will be able to find the best possible deals online when you compare products or services and therefore avoid buyer’s remorse.
5. Do Not Spend To Impress
The desire to impress people, most of whom you dislike, or to prove you are better than what people imagine will leave you bankrupt. It’s easy to fall into following the crowd but it shouldn’t be to the detriment of your financial health.
Don’t fall into this financial trap. Instead, build financial discipline and avoid people that trigger this habit in you.
Spending less and saving more is an intentional effort. You have to make sacrifices to achieve the financial freedom you desire. Checking how you spend does not mean living less, it’s all about being economical in your spending by clearly distinguishing between your needs and wants.
He who buys what he does not need steals from himself.
― Swedish Proverb