Smart ways to spend less isn’t going to be a list of tips about how to cut costs but more some pieces of advice about money management in general. I think we all know that ways to spend less include buying in bulk, making a list before you go grocery shopping and sticking to it, shopping in the sales ... that list goes on. What I want to present, are ways to spend less that require you to take hold of your finances and make them work for you; more long term goals than short term gains. Here are 7 Smart Ways to Spend Less:
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1. Get Organized
All of your important financial documents should be organized in one place, neatly filed. How you do it is entirely a matter of preference but also consider the value of some of your papers and how they should be stored. Check out this post for some valuable tips. Being organized helps you spend less because it gives you a handle on your finances. It’s the basis of being able to formulate a budget.
2. Create a Financial Plan
Please do note how I have said financial plan and not a budget - distinctly different, a budget is the mechanism for understanding where your money goes and identifying where you can save money. I still advocate that everyone should have a detailed budget, but one of the smart ways to save money and spend less is to formulate a financial plan. Don’t be woolly! Decide what you want to accomplish in the next year and plan to achieve it. What will you do, how much will these actions save and how will you use the savings to work best towards your plan.
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3. Be Tax Smart
One of the more gratifying and smart ways to save money and spend less is by paying less tax. Even though it’s a very boring subject, take some time to research all the taxable deductions you might be eligible for – there’s bound to be some you are ignoring. Check out these. Be strict with your tax receipts. Take good care of them and they’ll help save money. If you want to be electronically organized there are tools available - is a good example.
4. Make Dreams a Reality
Do you find saving a problem? But, do you have dreams? One of the best ways to spend less and save money is by planning to turn those dreams into reality. Your dream might be something as practical as early retirement – in which case you should be looking to squirrel money away in a pension – irrespective of how young you might be. On the other hand, your dream might be to sip cocktails on an exclusive tropical island. Instead of dreaming about it, do something realistic towards achieving it. Next time you’re in the queue for Starbucks, put those few bucks back in wallet and keep them till you get home. Put them in your piggy bank towards your dream vacation fund. So now, what sounds better – a frothy cappuccino on the way back to the office or a Sundowner and a tropical sunset?
5. Spring Clean
Every year when the days get longer and the warmth of the sun penetrates our cold bones, we spring clean the house. This is also the time you should spring clean your finances. Don’t be random throughout the year in transferring balances to credit cards with limited period interest free credit cards etc. Sit down once a year (it doesn’t have to be spring) and review all your finances. This means looking at APRs on your credit cards, savings, any loans and investments. It also means reviewing your utilities providers, your ISP and cell phone providers and your insurers. Consider seeing a financial consultant annually to see that you’re doing the best you can to spend less and save more of your disposable income.
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6. Compare, Compare, Compare
Comparison sites should become your best friend. Just about any financial product you can imagine can be found on a comparison site so make use of them. Also, the Internet has given everyone a voice and there’s a mass of people just wanting to share their views on ‘stuff’ with the world and this includes telling us to save money by showing us where the best deals are. If you must spend $50 on your daily face cream, get online and find it cheaper. Even if you only save a couple of bucks, they can go in the piggy bank of dreams, right?
7. Replace but Don’t Go without
One of the most important things to remember when you want to spend less is that you do not perceive any attrition of lifestyle. If you can save money and still do all your normal activities and have your simple pleasures, there’s no pain. Review your activities that cost money and find ways to replace them with free or lower-cost alternatives. For example, give up the gym membership but join a running or cycling club, don’t buy books but join the library, ignore the glossies and read magazines online and blogs like AWS...
Knowing how to save money or spend less is not a mystery and no-one should be frightened of reigning in their finances. It’s about being smart and taking control. It’s not about going without, more a case of what can you have and achieving what you want. I hope my ways to spend less prove to be of help.
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