how to spend money wisely essay pt3

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How to Spend Money Wisely

Last Updated: January 15, 2024 Approved

This article was co-authored by Andrew Lokenauth . Andrew Lokenauth is a Finance Executive who has over 15 years of experience working on Wall St. and in Tech & Start-ups. Andrew helps management teams translate their financials into actionable business decisions. He has held positions at Goldman Sachs, Citi, and JPMorgan Asset Management. He is the founder of Fluent in Finance, a firm that provides resources to help others learn to build wealth, understand the importance of investing, create a healthy budget, strategize debt pay-off, develop a retirement roadmap, and create a personalized investing plan. His insights have been quoted in Forbes, TIME, Business Insider, Nasdaq, Yahoo Finance, BankRate, and U.S. News. Andrew has a Bachelor of Business Administration Degree (BBA), Accounting and Finance from Pace University. There are 11 references cited in this article, which can be found at the bottom of the page. wikiHow marks an article as reader-approved once it receives enough positive feedback. This article received 22 testimonials and 93% of readers who voted found it helpful, earning it our reader-approved status. This article has been viewed 746,428 times.

Do you hate it when you really need money, but your wallet is empty? No matter how little or how much money you have, spending it wisely is a good idea; it enables you to get the most bang for your buck. Follow these tips to reduce expenditures in key areas and adopt a safer overall approach to shopping.

Spending Basics

• Organize your purchases by category (food, clothing, entertainment, etc.). Categories with the highest monthly amounts (or monthly amounts you consider surprisingly high) may be good targets for saving money.

• Make a preliminary trip before you go on your real shopping trip. Note the prices of several alternatives at one or more stores. Return home without buying anything and decide which products to buy on your second, "real" expedition. The more focused you are and the less time you spend in the store, the less you'll spend.
• If you are motivated to treat each purchase as an important decision, you will make better decisions.
• Do not accept free samples or try something on just for fun. Even if you don't plan on purchasing it, the experience can convince you to make a decision now instead of considering it carefully in advance.

• Don't browse store windows or shop for fun. If you're only buying something because you find the act of shopping fun, you'll likely end up spending too much on stuff you don't need. [2] X Research source
• Don't make purchasing decisions when your judgment is impaired. Alcohol, other drugs, or sleep deprivation [3] X Research source can harm your ability to make sensible decisions. Even shopping while hungry or listening to loud can be a bad idea if you don't stick to your shopping list.

• Do not take advice from store employees. If you need a question answered, politely listen to their response but ignore any advice on purchasing decisions. If they won't leave you alone, leave the store and return later to make your decision.

• Don't bring more cash with you than you need. If you don't have the extra money, you can't spend it. [5] X Research source Similarly, withdraw your weekly budget from an ATM once a week rather than filling up your wallet whenever you run out.

• Don't buy something on the basis of an advertisement. Whether on television or the product's packaging, treat ads with skepticism [6] X Research source . They are designed to encourage you to spend money and will not provide an accurate portrayal of your options.
• Don't purchase something just because it's reduced price. [7] X Research source Coupons and sales are great for products you were already planning to buy; purchasing something you don't need just because it's 50% off does not save money!
• Be aware of pricing tricks. Translate that "$1.99" price into "$2". Judge the price of an item on its own merits, not because it's a "better deal" than another option by the same company. (By making the "worse deal" atrocious value, someone can trick you into paying more for add-ons you don't need).
• Don't automatically buy the mid priced product within a category. Marketers know that if they want you to buy a high-priced product instead of a low-priced product, they can influence your decision by adding an outrageously expensive product to make the high-priced product intermediate in price and look reasonable in comparison.

• Only use a coupon or take advantage of a discount for an item you absolutely need or decided to buy before the discount occurred. The attraction of a cheaper price is an easy way to get customers to buy something they don't need.
• Buy products only useful at particular times of year during the offseason. A winter coat should be cheap during summer weather.

• Don't be fooled by lower monthly payments. Calculate the total amount you'll spend (monthly payments x number of months until fully paid) to find out what the cheapest option is.
• If you're taking out a loan, calculate how much total interest you'll have to pay.

• Set aside a very limited amount of money in your budget for these treats. The goal is to give yourself a small reward to keep your spirits up and prevent a giant splurge later.
• If your usual methods of treating yourself are expensive, find cheaper alternatives. Take a bubble bath at home instead of going to the spa, or borrow a movie from the library instead of going to the theater.

Spending on Clothing

• Clearing out your closet is not an excuse to buy replacements. The goal is to find out what types of clothing you have enough of, and which you actually need more of.

• Remember that price doesn't guarantee quality. Research what the longest lasting brands are rather than assume the most expensive option is best.
• Similarly, wait until the item you need goes on sale when possible. Remember not to use sales an excuse to purchase items you don't require.

• Thrift stores in more affluent neighborhoods usually receive higher-quality donations.

Spending on Food and Beverages

• This will not only prevent you from making impulse buys at the grocery store, but also prevent wasting money due to food waste, a major expenditure for many people. [9] X Research source If you find yourself throwing away food, reduce the size of your planned meals.

• Pack a lunch at home instead and bring it with you to work or class.
• Fill a water bottle using your tap at home instead of buying expensive bottled water.
• Similarly, if you drink coffee frequently, buy a cheap French press and save money by preparing it at home.

Saving Cash Wisely

• Establish an emergency fund.
• Avoid unnecessary fees.
• Meal plan your meals for the week

• Will I use this item regularly? Make sure you'll drink all that milk before it goes bad, or that you have enough summer months left to wear that skirt more than a couple times.
• Do I lack something that serves the same purpose? Beware specialized products whose role can be performed by basic items you already have. [13] X Research source You probably don't need ultra-specialized kitchen equipment, or a special workout outfit when sweatpants and a T-shirt will work just as well. [14] X Research source
• Will this item change my life for the better? This is a tricky question, but purchases that encourage "bad habits" or cause you to neglect important parts of your life should be avoided.
• Will I miss this item if I don't buy it?
• Will this item make me happy?

Community Q&A

• When comparing two cars, calculate how much more you'll spend in gas money if you buy the less efficient (lower MPG) model. [15] X Research source Thanks Helpful 0 Not Helpful 0
• Avoid dry-clean only clothing. Check the tags before you purchase any clothing. You don't want to repeatedly spend money on dry cleaning. [16] X Research source Thanks Helpful 0 Not Helpful 0
• Following a budget will be much easier if the entire household is committed. Thanks Helpful 6 Not Helpful 1

Tips from our Readers

• Do your research before buying something new: is it worth spending the money? What's the best value you can find? Resist automatically going for the cheapest item you can find, though, since cheap stuff is usually low-quality, meaning you'll likely have to spend more money replacing it in the long run.
• You can still enjoy a nice meal out while saving money. For instance, instead of paying for a drink, stick to water or hot tea and lemon, since it's typically free. Skip the appetizer, or split your food with a friend, since restaurant portions tend to be pretty big anyway.
• Be cautious about who you loan money to, and try not to loan what you can't afford to lose. If friends or relatives ask you if they could borrow some money, try to keep track of what you've loaned them, and maybe come up with a payment plan with them if it's a large sum.

You Might Also Like

• ↑ Trent Larsen, CFP®. Certified Financial Planner. Expert Interview. 22 July 2020.
• ↑ http://mywifequitherjob.com/how-to-build-wealth-by-spending-money-wisely/
• ↑ http://www.sltrib.com/sltrib/money/56846293-79/sleep-shopping-deprivation-foods.html.csp
• ↑ http://www.moneycrashers.com/psychology-of-money-saving-spending-habits/
• ↑ http://money.howstuffworks.com/personal-finance/budgeting/10-tips-for-staying-on-budget.htm#page=2
• ↑ http://pbskids.org/itsmylife/money/spendingsmarts/article8.html
• ↑ http://money.msn.com/how-to-budget/6-habits-that-will-make-you-broke.aspx
• ↑ http://www.moneycrashers.com/importance-splurging-avoid-frugal-fatigue-splurges/
• ↑ http://www.lifehack.org/articles/money/7-ways-spend-money-wisely.html
• ↑ http://www.csmonitor.com/Business/Saving-Money/2012/0510/23-ways-to-save-money-on-clothes
• ↑ http://financialplan.about.com/od/savingmoney/a/newcarmistakes.htm

About This Article

If you want to spend money wisely, create a budget to track how much money you spend on each category, such as food, clothing, entertainment, and living expenses. Then, try to plan each purchase in advance so you know how much money you will be spending and will be able to avoid impulse purchases. When you do spend money, pay in cash to prevent overspending or interest charges for unpaid credit card balances. Whenever possible, wait for a sale to purchase big-ticket items, like a new laptop, at a discount. For tips on spending less for food and clothing and starting a savings fund, scroll down! Did this summary help you? Yes No

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How to Spend Money Wisely: 12 Hacks To Improve Your Habits

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“What’s the first thing that comes to mind when thinking of how you can improve your financial situation?”

Many people would say “spend less money.”

One way to do this is by buying something used. In fact, a study found that Americans buy 10% more new items than they did in 2008 because we have so many promotional offers available. Not only should you be trying to save some money on your purchases, but also cut all kinds of other expenses from your lifestyle and keep them at a minimum.

Usually, people spend more money than they need.

This can lead them to have less money saved or be able to afford the things they want.

However, with a few simple changes in your spending habits, you will be able to make more of what you earn and feel more satisfied.

In today’s world, it is easy to be overwhelmed by the amount of information available on how you should spend your money.

With more and more people struggling with their finances, I would like to share a few hacks that have helped me spend money wisely and simplify my life.

Also, I am going to include some simple money saving tips on how to spend less money! Do not get duped into buying things you did not plan on purchasing or spending more money than you needed to.

How to Spend Money Wisely

As you can see shortly, there are many ways to spend money wisely. Whether it be through saving, investing, or taking care of your health; with this article as a guide, you won’t have to worry about your money any longer.

This is meant to inspire people on how they can better manage their finances and live more efficiently, while still being able to get the things that they want.

Spending money wisely is a way of life, but it can be tough to know where exactly you should start.

Luckily for you, we will break down ten hacks for you to follow so that your money does not go to waste.

1. Pay Yourself First

You are probably wondering, why is saving money about how to spend money.

The first thing you should do to spend money wisely is to pay yourself first.

This could be saving for the future with an emergency fund, which can be used in case of emergencies or downturns in your financial situation. This can be done by contributing to a high-interest savings account and saving up to $1,000 or more for emergencies.

Or choose one of our money saving challenges to match your financial goals.

2. Take Care of You

You need to take care of your health, as that will improve the quality and longevity of your life.

Making wise choices on choosing quality food and healthcare may cost more money upfront, but in the long run, it will save you money on huge medical expenses.

You spend your money wisely by taking care of your health. Money spent on a gym membership, healthy food, and other medical expenses can save you even more money in the long run.

Many people love the idea of time freedom for this reason.

3. Invest in Your Future

One way to spend money wisely is by investing in your future. This might be done through a 401(k) or Roth IRA, which lets you invest pre-tax dollars and then withdraw them tax-free once you retire.

This can be a great way to save on taxes, but the money needs to stay invested for at least five years before you’re able to withdraw it without a penalty.

4. Choose Experiences

We live in a society that prizes material purchases and spending. Remember to prioritize experiences by getting outside. Not just for your health, but also on the mental and emotional levels, as well as the personal and even family levels.

Also, a plethora of benefits to spending money on experiences, not all materialism related.

Try to spend less on electronics and materialistic items that fill your home and more on experiences like travel or going out with friends.

This is a great way to spend time with your family and friends instead of buying things for them.

Related Reading: Overcome Gift Regret: Experience Gift Ideas That Do Not Go To Waste

5. Set Goals

Many of us, regardless of financial status, know that if we want to live on the right path without having our finances stress us out, then there are good habits to be followed.

Think about how much money you want to make in the next five years or ten years and make up how to get there.

Now, you need to line up your spending to make that happen.

Not sure how to set goals? Start here with making smart financial goals .

The next hack is to make a budget and stick to it, which will help you spend your money wisely by only spending what you have available in each category.

A budgeting strategy helps you develop better financial skills. These strategies are practiced in order to help prevent overspending and create a set spending plan for you.

Create a budget that includes all your expenses and then each time you get paid, put a little bit of your paycheck into each category.

7. Evaluate Your Spending

Oftentimes, we find ourselves buying items that are not necessary and just a waste of money. This hack is to evaluate what you’re spending your money on and think about whether or not you want to continue this habit.

For every purchase ask yourself if the item is worth it and what will happen if you don’t buy it.

By completing a no spend challenge , you will be amazed at the things you find out are not worth spending the money on.

8. Likeminded People

Next, you should try to spend less time with people who are going to make you feel bad about yourself.

This is a hard one but just think of the good things that will happen when you stop hanging out with people who make you feel bad.

If you are constantly around people you need to learn how to not spend money, then you will be battling upstream battle. Look for those who have the same mindset and are determined to spend money wisely.

9. Spend on Quality Over Quantity

The best way to buy quality items is to spend more money on them. Buying cheaper items has its risks, but over time it will lead to dissatisfaction with the product and waste of money.

If possible try to spend money on things that will last a long time and not just stuff like food or rent.

This concept of quality of quantity is not difficult to understand. For example, instead of owning 10 pairs of jeans that you think you need, you spend money on the two pairs of quality jeans that you love.

Because items are so cheap to pick up, it is easy to quickly fill our homes with quantity and excess stuff (plus we are spending more in the process). Instead, spend a little more and buy less of what you truly need or want.

10. Eat at Home

One way to save money is by cooking more at home and not going out to eat. You can also cut down on the amount of food you purchase, which will help you save a ton of money in the long run.

Instead of buying food that will go bad quickly or ruin your health, buy more expensive food. This way you are spending less money on the product but it is going to last longer and be better for you.

By spending money wisely, you must learn how to spend less money on food.

11. Use Tax-Advantaged Accounts

Specifically, I am talking about FSA or HSA, or dependent care FSA. This is when you set aside money each year for these purposes. Money goes into these accounts tax-free, so you are lowering your taxable income.

On how to spend FSA money, you must have the proper documentation on your plan. The same is true for how to spend HSA money.

The limits change each year on how much you can contribute to each of these plans, but the maximum you can spend tax-free is over $20,000 for a family.

This is a great trick to spend money wisely and lower the amount you owe in taxes. Just make sure to spend the amounts in the FSA each year!

12. Spend on things that add happiness to life

Personally, I have a hard time spending money. Period. This is something I am working on as we progress through our financial journey. Now, I look to spend money on ways that will improve our life or bring smiles to our faces.

Spend on things that add happiness to your life.

For example, if you’re happy with the new shoes you’ve just bought, then it’s worth spending money on them! If you love to travel, spend on travel. If you like reading fiction novels, spend on fiction novels.

Spend your money on things you enjoy and make the most of the disposable income you have.

How to Spend Money to Make Money

One of the best ways to make money is to give back. However, it takes some money to make money, which is typically frustrating to those who constantly want to make more money per year.

By selling a product or service, you are supplying them with your knowledge, advice, and understanding. Another way is through investments. Investing, while not always profitable, has companies that adhere to companies of all kinds.

One of the best ways to spend money wisely is to invest in ways to make money.

There are plenty of ways to make money and start your own business.

Here is a great book to open you up to the idea of starting your own business and the freedom with money it can bring.

Here are great ways to make money on the side:

• Sell printables and make passive income!
• Become a virtual assistant and make your own schedule.
• Learn to get weekly paychecks when investing in the stock market .
• Earn money with freelance writing on the side.
• Walk dogs with Rover and get paid cash.
• Drive for any of these companies and make money – Instacart , DoorDash , or Postmates .
• Start a bookkeeping business on your terms.
• Sell Earn easy money with flipping items Find great success with this Flea Market Flipper training.
• Have kids? Then, teach them to make money with Flea Market Flippers for Kids .

It is possible to make more money on your business than you make more money in your current job or career.

How to Spend Less Money

Many of us spend too much on material items that are not actively used. This creates a situation where we have to make more purchases in order to get the same level of happiness.

The first step towards becoming frugal is deciding what you want out of your possessions, and then only buying those things which will provide you with this goal.

Here are 32 easy ways to do that!

• Shop at Discount Stores: You don’t have to go all out with your shopping if you’re looking for a way to save some money. There are plenty of stores that offer great deals and you can still find some really cute clothes.
• Find Online Deals : You can find deals online for just about anything. This is a great way to get the deals that you might not know about. There are so many websites out there dedicated to helping you find the best deals and coupons.
• Save Money on Your Cell Phone Bill: Just because the cell phone companies want to charge an arm and a leg for service doesn’t mean you have to. There are plenty of options out there where you can find great deals on your cell phone bill without having to break the bank.
• Call and Cancel Unnecessary Services: Do you really need to subscribe to cable? How about getting rid of your gym membership because you know that all the exercise won’t do anything for your weight. The truth is you don’t need a lot of these things that are costing you money. Also, try a free service like Trim or Billshark .
• Buy Generic Items: Do your shopping at the grocery store and buy generic items instead of brand names for most of your purchases.
• Buy in Bulk: Buy items like toilet paper, cleaning supplies, and other things in bulk to save on the cost of each individual item. This is more so for families who can buy food in bulk.
• Start Couponing: This is a great way to save money. I know it’s not the most enticing offer, but if you’re looking to save money then coupons can be your best friend. You can go online and find coupons for items that are on sale at your favorite store or you can get them in the Sunday paper.
• Use Public Transportation: This is a great way to save on gas and wear and tear on your car.
• Get Rid of the Car: If you live in an urban area, it might be worth getting rid of the car and using public transportation or just walking instead. Or become a single-car family.
• Carpooling: One of the biggest hacks that many people are unaware of is carpooling- which can save up to $1,000 per year.
• Rent Things: Whether it is a video, movie, or power tools to complete a project, renting will save you money.
• Use Less Electricity: Turning off lights and other electronics when they are not in use can really help!
• Eat Spaghetti : Eating pasta saves money and reduces your grocery bill.
• Use the Library: If you like to read, the library might be another alternative to buying books.
• Borrow Books: Borrowing books from the library or your friends is a great way to read for free!
• Use Online Promo Codes: Using promo codes or coupon codes on all of your online purchases will make a huge difference. Here is a great place to find promo codes and get money back on your purchases.
• Eat Out Less Often: Eating out less can save money!
• Eat Less Meat: Eating less meat will save on your grocery bill! There are so many wonderful delish meals made with beans!
• Buy Used: If you must buy something but don’t want to spend much, consider buying used versions of the items you need. Buying used products will save money and help the environment.
• Share with Friends: Sharing your belongings, like clothes or toys, can save you money.
• Ask for Help: When someone offers to help you do something it’s only polite to take them up on it.
• Find Used Clothing: Buying clothing used can save you a lot of money and help the environment!
• Downsize Your Hobby: It’s important to live within your means. If you have an expensive hobby it may be time to scale back on the expense or find a cheaper one.
• Need vs Want: Try not to spend money on things that are “needed” but not “wanted.”
• Avoid Impulse Spending: Try to plan before you buy anything- think about what you need, the price of items, and if it is worth buying.
• Plan Free Activities: Plan outings with friends and family, rather than going to the movies or restaurants alone.
• Plan For Expensive Times: Give your friends a heads up before you go out on an expensive outing so they know it’s coming. They may be able to help cover the cost or provide a cheaper alternative. This will help everyone’s budget.
• Do Your Research: Research all of your options before you make any purchase- this will allow you to get the best bang for your buck and find the best deals.
• Bartering : If you must buy something, but you don’t want to spend much money on it-consider bartering with someone or buying used items instead of new ones (e.g., clothes, furniture).
• Know-How You Spend Money: Keep a budget to track your spending and be aware of how much money you have left at the end of the day or week so you can plan accordingly.
• Negotiate on Price: If you plan to buy something, don’t tell the retailer how much money you have until after they give their price- this can help save money and time by eliminating any final price negotiations.
• Think Before You Spend: Put some thought into your purchases before you make them- this will help you make sure you really want to spend money.

How Much Money Should you Spend?

There is a lot of conflicting information on how much money should be allocated to needs vs. wants, but this takes into account what percentage of take-home pay should be spent on necessities.

Here is the Cents Plan Formula we Use at Money Bliss:

• 50% to Basic Expenses
• 20% to Savings
• 10% to Giving
• 20% to Fun Spending

So, the average person should spend 50% of their take-home pay towards needs. That means you must spend your money wisely.

Keep a list of what you spend and how much it cost.

You should have some idea of how much money you are able to spend on what. This will help you decide whether it is worth buying a thing or not before purchasing it.

Use the list to see where you can make adjustments, for example spending more time with your family or finding fun things to do with no money .

Ready to Start Spending Money Wisely?

Spending money wisely can seem complicated at times.

The key to using money wisely is understanding how you spend your cash . Spending tends to happen automatically, which can lead people down the path of overspending and debt if not monitored closely.

The affordability of happiness and satisfaction depends intensely on the money we have.

The activities we could do, and expenses we could cut out, can be often atrocious and insufficient for our expectations.

Extreme dissatisfaction and the whole time earning less than we would desire, we may feel that we need to know how to spend money wisely.

The vital hacks elaborated in this post will help to understand caring for a budget, and changing our habits to spend more wisely.

When spending money wisely, people should be aware of their habits so they can change them in order to save more and spend less on things that do not bring happiness or benefit the person’s life.

If you want to save money, spend it on something that will make your life better or more enjoyable.

Know someone else that needs this, too? Then, please share!!

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More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

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Top Tips for Spending and Managing Money Wisely

You don't have to be a personal finance expert to be good with money. Anyone can take steps to develop good money habits and achieve greater financial flexibility and freedom! It all starts with understanding how to spend money wisely and how to manage your money effectively.

What Does it Mean to Spend and Manage Your Money Wisely?

Spending wisely is more than just keeping track of your bills and having a good credit report. Spending your money wisely is a way of life! Spending less than your income while continuing to pay your bills on time and in full allows you to save for future needs. ​Aligning your spending habits with what matters most to you will help you reach your biggest money goals.

Helpful Tips for You

Are you ready to get started on your journey to saving money and spending money wisely? Here are some helpful tips to consider:

• Track your spending—every dollar! Before you can manage your money wisely, you need to understand where your money goes each month. That's why tracking your spending is so important! Save your receipts and write each purchase in a notebook. You can also use a digital tool like Money Management to track and categorize your spending. Money Management will give you a very clear picture of your spending habits, which you can use to create an accurate monthly budget .
• Look for expenses to adjust, reduce or eliminate As you evaluate your spending habits, identify room for change. Some questions you may want to ask yourself include:
• Do your purchasing habits match your priorities and financial goals?
• Which categories could you trim to save more money?

You can save money by listing your expenses in order of importance from "must-haves" like living expenses to "nice-to-haves" like new shoes and clothes.

• ​​​​Give your money a purpose After you pay bills, if you don't have specific goals for your leftover income, you might end up spending the funds you have leftover at the end of the month rather than saving them. But by giving your money a dedicated purpose, you can use it to help you live the life you want to live! What goals do you have for your money? It could be boosting your emergency fund, upgrading your car, paying for a child's education, taking a dream vacation or even donating to the causes you care about. Once you have enough money saved to start putting it towards certain goals, open separate  savings accounts and name them for each goal. These savings accounts will help you establish a plan for your extra money, including any additional income you receive through raises, bonuses or your tax refund.
• Stay flexible Learning to develop a financially savvy plan to spend and manage money wisely takes practice. When you're first getting started, you'll probably need to adjust your budget and spending habits so that you can meet your goals. Stay flexible and try to make money management part of your daily routine—it's worth it!​

For more tips on the road to financial independence and how to spend money wisely, view our Spend & Mange Wisely Brochure here .

How We at Wright-Patt Credit Union Can Help

At WPCU, we want to help you succeed in your journey to spending wisely and give you the tools you need to spend money wisely. We have a variety of helpful tools to make the process easier, including budgeting worksheets and spreadsheets , spending tips and interactive learning modules for spending and managing your money. ​

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Six Ways to Get More Happiness for Your Money

When we think about spending our money wisely, we usually focus on getting the best value for the lowest price. We comparison shop and download apps to find the latest discounts and deals; we’re seduced by the daily special or the limited-time offer.

But, for those of us lucky enough to have disposable income, what if we defined wise spending in terms of the happiness that it brings? That’s a completely different way of thinking about our purchases, and one that we have little practice in.

“Most people don’t know the basic scientific facts about happiness—about what brings it and what sustains it—and so they don’t know how to use their money to acquire it,” write Elizabeth Dunn and her colleagues in a 2011 study .

Luckily, more than a decade of research has been investigating how different types of purchases affect our well-being, and it can help us turn spending into a happiness practice in its own right. The key, it seems, is to spend money in ways that bring you closer to other people.

1. Spend money on experiences

In a landmark study in 2003, researchers found that buying experiences —like seeing a Broadway play or going for coffee with a friend—improve our well-being more than buying possessions . Across different surveys, more than 1,500 participants tended to say that experiential purchases made them happier and were better investments, and that their moods were more positive when recalling them.

Thus began more than a decade of research into this phenomenon, unearthing some of the reasons why buying experiences is so beneficial—which can inform our financial choices in the future.

But first, some definitions: Although the distinction between experiences and material goods is sometimes fuzzy (think: books and cars), we tend to intuitively understand which is which. Researchers typically define experiences as things we buy in order to do something, which don’t endure in the form of a possession; and material goods as things we buy in order to have something.

2. Better yet, spend money on experiences you share with others

Not all experiences are created equal, though, and it’s up to us to choose the ones that are most fulfilling. In a 2013 study , when researchers separated out experiential purchases into social ones and solitary ones—going out to dinner with friends or alone, for example—participants reported that the solitary experiences brought just as little happiness as the material things.

“It may be less the doing that creates happiness than it is sharing the doing,” the authors of that study explain.

Even if we can’t share an experience with others initially, we can share it with them later by telling the story—another advantage that experiences have over material things. Our new kitchen gadget or trench coat loses its conversation value shortly after we buy it, but “talking to others allows us to relive experiences long after they have happened. In this sense, experiential purchases are gifts that keep on giving,” write the authors of a 2015 study .

In fact, that study found that the more we chatter about our experiential purchases, the more happiness we derive from them. This’ll make a great story later is actually a real benefit. A 2012 study also found that people are more likely to mention experiences they bought (vs. material things) when recounting their life story.

With a little change in perspective, though, we can extract more happiness from our possessions by focusing on the experiences they facilitate. At least three different studies found that thinking about gray-area purchases like music and TVs more as experiences than objects helped people see them as more self-expressive and reduce the risk of buyer’s remorse. So the next time you buy a new flatscreen, think of it not as a fancy piece of technology but as a prop for cosy evenings with your spouse, and you might enjoy it all the more.

The story emerging from the research is that experiences become part of our identity, which makes them feel valuable in their own right. Compared to possessions, we worry less about what others will think of our experiences, and they don’t generate the same kind of regret . If anything, we lament the experiences we didn’t buy: the shows we were too busy to attend, the trips we put off. Though experiences may be fleeting, they’re essential to our happiness—so now you’ve got a science-backed excuse to invest in them.

3. Spend money on other people

If you want to bond with other people, you could buy experiences to have with them—or you could spend money on them directly.

In a 2008 study , researchers gave participants up to $20 to spend on themselves or on others that same day, then called after 5 pm to see how they were feeling. In the end, contrary to expectations, participants reported being happier after treating others than treating themselves. The same was true of employees who spent more of their bonuses on donations and gifts, rather than personal expenses and treats.

And this effect may not be restricted to rich, white Westerners. For a 2013 study , researchers gave participants in Canada and South Africa the choice to get $2.50 in cash, take home a $3 goody bag, or give a $3 goody bag to a sick child. Those who made the generous decision reported greater positive emotion at the end of the experiment, in both countries. So did participants in India who simply remembered purchases made for others, compared to remembering purchases for themselves or not recalling anything in particular.

But just because it typically feels good to spend on others doesn’t mean that all generous purchases make us feel warm and fuzzy. Research is starting to understand exactly when so-called “prosocial” spending contributes to well-being, and how to find the most fulfillment in giving.

For example, another 2013 study distinguished between spending on others that strengthens our social connections and spending on others that doesn’t. Researchers gave participants a $10 Starbucks gift card to use that day, in one of four ways: treating themselves to a coffee alone, giving the card to someone else, taking a friend but spending the card on themselves, or taking a friend and treating them. In the end, the happiest participants were the last group: the ones who combined spending on others with social connection (and venti caramel lattes).

4. Spend money on the right people

Does it matter whom we spend money on? Preliminary research suggests that it might. In a 2011 study , participants who recalled spending $20 on someone close to them reported feeling more positive emotion than those who recalled spending $20 on an acquaintance. In the context of evolution, the researchers explain, this makes sense: Early humans who enjoyed helping family members were more likely to see their DNA survive.

The research about spending on others is particularly relevant when we consider donating to charity. For example, it’s important for donors to see the positive impact : When Canadians were given the chance to donate to the charities UNICEF or Spread the Net, bigger donors reported feeling more positive emotion and more satisfaction with life than smaller donors—but only those who gave to Spread the Net, whose pamphlets emphasize that a single bed net can prevent malaria and save a child’s life.

Simon Fraser University assistant professor Lara Aknin , who was involved in both of these studies, applies this research to her own life by treating friends and family to small gifts, and trying to make donations that have a big impact. The upshot of her research is that if giving leaves you feeling detached or drained, there may be smarter ways to allocate your dollars so everyone can benefit.

As you might have noticed, almost all of this research asks people to recall spending from the past, or contemplate imaginary choices. Researchers will gain even greater insight when they start to survey participants in real-time to see how they’re feeling about their purchases, like this 2016 study did, or follow them for years after a purchase to see how those feelings change with time.

5. Express your identity through spending

Although dozens of studies support the notion that spending on experiences and other people is advantageous in general, perhaps you’re skeptical. Sure, that may be true for other people, but not for me , you might think—and in some cases, you just might be right. Once general trends are identified, the researchers of a 2016 study explain, the science of happy spending will have to start accounting for individual needs and preferences.

For example, demographics and personality may influence how spending affects our happiness. Several studies found some evidence that the happiness advantage of experiential purchases (over material ones) is even stronger for women than it is for men; in that pioneering 2003 study , it was also stronger for young people, highly educated people, and city dwellers.

In contrast, people who behave more materialistically—tending to accumulate possessions rather than experiences—seem to derive equal happiness from both types of purchases, a 2014 study found. Why? Researchers discovered that experiences are less critical to their identity; these aren’t people who define themselves by the things they’ve done, like the fun-loving adventurers who splurge on plane tickets or the foodies first in line at five-star restaurants.

Meanwhile, and perhaps unsurprisingly, people who have little concern for others don’t seem to derive greater happiness from prosocial rather than selfish spending. Future research will have to investigate whether all these findings are merely blips, or evidence of real and robust differences. 

A 2016 study specifically tested whether personality influences the happiness we get from our purchases, analyzing six months’ worth of spending by customers of a UK bank. Purchases were grouped into 59 categories, from gardening to coffee shops, accounting to dentists, which each got a Big Five personality score. (Spending on charities might reflect conscientiousness and agreeableness, for example, while spending on tourism might reflect openness to experience and extraversion.) Participants with a better match between their personality and the personality of their purchases reported more satisfaction with life.

In a follow-up study, the researchers contrasted two stereotypically opposite purchases: shopping in the quiet, reflective haven of a bookstore or the bustling, social environment of a bar. They found that spending $10 at a bookstore increased the happiness of introverts, and spending at a bar increased the happiness of extroverts—but not vice versa.

“Money enables us to lead a life we want,” says coauthor Sandra Matz, a PhD student at the University of Cambridge. As she and her coauthors write, “Finding the right products to maintain and enhance one’s preferred lifestyle could turn out to be as important to well-being as finding the right job, the right neighborhood, or even the right friends and partners.”

6. Think less about spending

More on spending and happiness.

Learn how spending money on others can lower your blood pressure .

Discover how to make giving feel good .

Watch Sonja Lyubomirsky discuss whether money brings happiness .

Explore how sadness affects our spending .

In the end, though, the best way to cultivate happiness through spending may be to not focus on spending so much in the first place.

In one 2002 study , for example, researchers found that adults were happier around Christmas—feeling more satisfied, more positive, and less stressed by the holiday craziness—when they put greater emphasis on family and religion and less emphasis on giving and receiving. Just this year, a new study found that people who valued time over money tended to be more satisfied with their lives in general and felt more positive and less negative emotions recently.

It’s certainly misguided to stake all our hopes of happiness on our purchases. But so is ignoring the role that they do play in our well-being, a role that is becoming clearer and clearer. Buying is an opportunity to express our personality, to connect with others, and to craft a meaningful life story, and what better definition is there of money well spent?

About the Author

Kira M. Newman

Kira M. Newman is the managing editor of Greater Good . Her work has been published in outlets including the Washington Post , Mindful magazine, Social Media Monthly , and Tech.co, and she is the co-editor of The Gratitude Project . Follow her on Twitter!

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Spending Money Wisely

Author: Financial Success | Image: Financial Success

Figure out your budget

Making a budget can seem like a time-consuming thing to do, but it is one of the most important steps in order to ensure that you are financially organized. Creating a budget is going to allow you to track your spending, so you know exactly what you are spending your money on, and from there, you are going to be able to become more successful when it comes to achieving your financial goals. The 3 keys to creating a successful budget are tracking your spending, paying off major bills first, and then creating a spending plan.

There are many easy ways to start creating your budget, including

• An Excel Spreadsheet
• CashCourse Budget Wizard
• Mint: Personal Finance & Money (In the App Store)
• Template on the Office of Student Financial Success website

What creating a budget is going to do is help you see if you are overspending (spending>income) or if you are underspending (spending<income). If you figure out that you are overspending, then you need to decide to either reduce your spending or find an additional source of income to ensure that you are not going over budget.

Decide what is a need and what is a want

Deciding between a need and a want is an extremely important task when it comes to saving money, especially as a college student where the money is often limited. It can be very hard to decide between the two, especially when something like the new iPhone comes out or one of your friends asks you to go out to eat. However, figuring out what is a need or a want is the key to spending money wisely and sticking to your budget.

What are examples of Needs?

• Housing, Mortgage Payments, and Utilities
• Loan Payments
• University Fees
• Transportation
• Food (Groceries)

What are examples of Wants?

• Sources of Entertainment
• Memberships
• Brand New Clothes
• Dining Out/Drinking at the bars
• New Electronics

The needs and wants may differ between people depending on certain aspects of their life. While cutting out wants is important to maintaining a successful budget, it does not mean that you should cut out all the wants completely. One thing that is recommended when it comes to keeping track of needs and wants is to use the 50/30/20 rule. This means that 50% of your income should be devoted to paying for needs, 30% of your income can go to buying your wants, and the last 20% should be added to your savings.

Plug the leaks in your spending

Small spendings can add up and end up having a huge impact on the success of your budget and can often lead to you thinking, “where did all of my money go.” Stopping these leaks in your spending will ensure that you meet the goals that you set in your budget and that you are spending your money wisely.

Some of the ways to plug these spending leaks include

• Carry around a reusable water bottle to cut out needless spending on things to drink
• When going shopping, make a list and stick to it—no impulse buying.
• Carry cash instead of credit cards to ensure that you are only spending what you can afford
• Get rid of subscriptions that you don’t use anymore or are just unnecessary.
• Pack snacks from home to avoid higher prices at vending machines or gas stations
• Use subscriptions to streaming services such as Netflix or Hulu instead of paying for cable.

Limiting the amount of impulse buying and needless spending is going to help you stick to your budget and meet your goals. It will also allow you to have a better understanding of where your money is going and not leave you with that “where did all that money go” feeling. From plugging these leaks, you are going to end up spending less money and be able to save more.

• Financial Wellness

A Harvard professor says most of us overlook a simple way to be happier because it costs money

Paid non-client promotion: Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate investing products to write unbiased product reviews.

• If you want to spend money wisely, consider paying someone to do your laundry or grocery shopping .
• Eliminating stressful things from your to-do list frees up time for more meaningful activities, like spending time with family or friends, which can lead to more happiness .
• That's according to a Harvard Business School professor, who says that many of us ignore this simple way to be happier because spending the money makes us feel guilty.
• Read more personal finance coverage .

We all want more time to spend doing things we enjoy.

But according to Harvard Business School professor Ashley Whillans, we aren't doing the one thing that can afford us more time: Spending money to eliminate our most stressful daily or weekly tasks.

During a podcast with the Harvard Business Review's Curt Nickisch, Whillans says exchanging money for more free time can make us happier. Specifically, "using money to buy ourselves out of negative experiences," like washing and folding laundry or cleaning house . 

For Whillans, its opting for a pricier apartment close to work, where everything is within walking distance and there's no tedious commute, she said. Whillans' research shows that "buying time" in this way leads to greater happiness and less stress. But often, something is holding us back.

"I find in my studies that people feel really guilty about outsourcing even though they're giving up money to have more time that they've earned," Whillans said.

Paying someone to deliver meals, wash and fold our laundry, or mow the lawn makes us feel like a burden, she said. We also feel like it shows others we're not capable of doing our own chores.

The best way to counteract those feelings of guilt, Whillans said, is to focus on the value you're gaining. The key to ensuring that free time leads to greater happiness is to make it meaningful, she said. 

Read more: A Harvard professor says most of us squander 5-minute opportunities to be happier every day

"Just the simple act of thinking about giving up money to have more free time seems to make people plan their time a little bit better. If I'm going to incur this cost to have this free time, then I'm going make sure I really enjoy the free time that I have," Whillans said.

Whenever we open our wallet, she argues, we should be asking ourselves "Is this money changing the way that I spend my time?"

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How I Spent My Pocket Money (Essay Sample)

Table of Contents

Introduction

If you had your own pocket money, how would you spend it?

This essay focuses on how to spend money, and how to do so wisely. In this piece, we share a person’s experience of being taught to spend money wisely and what he would buy when he was given a regular allowance.

Writing an essay on what you would spend your money on? We can help. Go to EssayBasics.com to learn more about our essay writing services . We can help you express yourself by pairing you with a writer who has some experience in your chosen topic.

How I Spend My Money essay

One of the most exciting events in a young one’s life is when their parents give them an allowance. No matter the amount, an allowance gives us the opportunity to spend on small things that make us happy as a child.

The joy that an allowance brings is more than just the amount itself. It’s really rooted in the experience one gets in choosing how to spend it. First, there’s the anticipation of receiving an allowance. Next, there’s the excitement of thinking about all the things you’ve been wanting to get for yourself. Third, there’s the delight of actually receiving the allowance. Finally, there’s the sheer thrill of choosing what to buy and taking it home.

How and when an allowance is given, and how much is gifted to the child, depends on the guardians’ principles. There are those who provide an allowance for children to buy basic needs. But there are some who might give a little extra to give the child an opportunity to learn how to handle money well.

It must be said that not all children are privileged to have an allowance to spend on themselves. If they come from a poor family, the guardians may not have any extra finances to give. They may save up for this just once in a while.

I am very blessed that my parents gave me an allowance on a regular basis. My allowance has really taught me financial stewardship at a very young age. They also allowed me to make decisions regarding my finances, even if I made mistakes.

Saving Money at a Young Age

While my allowance isn’t a fixed amount, I have since learned that the first thing I should do is set aside a portion of it for savings. I get a third of whatever amount I get and earmark it for saving.

To make sure that I won’t be tempted to use it, my mom helped me open a bank account where I deposit the money. They opened a time deposit account, which means I cannot just withdraw from it anytime. Whenever I hesitated to go to the bank, my dad would remind me that my small deposits would turn into one big bulk of cash that could someday be used for a rainy day, or for strategic investments.

How I Spend Money with Whatever is Left

With what’s left of my allowance, I usually buy books. These are mainly documentary magazines, which I read during my leisure time. It is actually one of my hobbies. I have made it a personal tradition to always purchase a documentary magazine each time I get my regular allowance. I particularly enjoy news magazines and feature magazines. I am a lover of general knowledge. I love knowing about everything, how and why things are the way they are – whether about nature, politics, science, or geography. It is always a first on my list of hobbies.

The other bit of my regular allowance goes towards the purchase of snacks. I love yogurt and ice cream. The refrigerator at home always has a shelf specifically reserved for my yogurts.

The remainder of my allowance goes towards others. These include my family and friends. I try to buy them something nice as a way of thanking them for taking good care of me.

I also go out of the way to purchase some gifts for my siblings as well as my parents. I want to gift them with simple things, even if they were the ones who gave me my allowance. Doing this for them gives me so much satisfaction since I love making them happy. After all, what is life without happy family and friends?

Regular allowances taught me how to make wise spending decisions. I know how to handle and spend my cash, whatever amount it might be. Therefore, I am confident that when I start handling larger amounts of money in the future, I won’t be as overwhelmed. I will make it a point to remember the financial lessons I’ve learned as a child. I hope to also be able to teach others who to use their money wisely.

Short Essay About What You Would Spend Your Money On

Did you grow up being taught about the value of saving money? If you were like me, your mom and dad probably gave you a regular allowance. They also probably gave you free rein to use your money in whatever way.

Growing up, I deposited regular amounts into my savings account the moment my allowance was handed to me. I did not want to be tempted to splurge on all the food I was craving for while holding all of my money. Personally, apart from fast food, I enjoyed treating myself to books. In fact, I made it a regular tradition to purchase a book every time I got my allowance.

I remember being taught how to make a personal budget out of my allowance. Exactly how much money was given to me didn’t matter as much as the main principle they passed on: save money. They didn’t care if I used the rest of my allowance on junk food or other types of impulse buying. All that mattered to them was whether or not I set aside a portion to put in a savings account. And so I did.

How To Write An Essay About Money

There are so many ways to write a piece about finances. It depends on the lens you are viewing the topic from. Are you an adult looking back at your childhood and remembering important lessons learned? Are you a financial expert looking to give some advice on how to maximize your cash? Are you a student wanting to teach people how to set aside an amount in case of an emergency? Are you a parent who discovered creative hacks in your finances to make ends meet? Find your angle and work it.

How To Spend Money Wisely As A Teenager

When you are young and still living under your guardians’ roof, thinking about contingencies or other things you may be needing to buy before your next allowance comes may not come naturally to you. It is so important to learn how to handle your personal finances even at that age because that sets the direction of your spending in the future. When you start getting a monthly income, the weight of the responsibility is even greater as you start to live independently. Even as a teenager, learn to set financial goals and think of the long game. Even if you have to put money inside a piggy bank to avoid temptation, do so. Track your expenses and make adjustments according to your level of contentment. Learn the art of investing from an expert. Finally, don’t shop ’till you drop. It’s a trap.

How To Spend Money Wisely Essay Example

• Pages: 6 (1392 words)
• Published: July 21, 2016
• Type: Essay

Do you hate it when you really need money, but your wallet is empty? No matter how little or how much money you have, spending it wisely is a good idea. But how do you spend money wisely? People actually tend to overspend in a few specific areas. So,following the steps below will improve your overall pocketbook health. First, come up with a budget. Financial experts suggest you track your spending for a few months so that you start work on your budget knowing where your money is going. If you are bad about saving receipts for cash purchases, keep a notebook with you, to write down all cash purchases as you make them.

Additionally, make a list of your monthly expenses, using your bills and the information you gather. Review this list

to determine where you can reduce expenses and by how much. Therefore, avoid impulse buying. Before making any purchase, ask yourself a few simple questions, and be honest with your answers. Only move on to the next question if you can answer yes to the current one. If you cannot get all the way through the questions, it is probably an impulse buy and you should pass it up. You should think about the things in your life that you tend to spend the most money on.

Most of these areas are outlined below, with suggestions as to how you can cut down on spending in them. Besides. shop around regularly for utilities and insurance. Many service providers count on customers sticking with the services simply because it is easier than shopping for another one regularly. If it

has been more than a year since you purchased your cell or home phone service, cable or satellite package, internet service, or car, home, or health insurance, shop around and make sure you are still getting the best deal. Moreover, Research large purchases before buying.

Never purchase anything that costs more than $200 without conducting some research first. The more expensive the item, the more research you will want to conduct. Your research should compare brands, prices, and quality so that you can determine which product is the best for you and your budget. Some reputable places to start your research include. Money doesn’t grow on trees. So, we must work hard to find money Managing your money wisely is one of the most important ways to gain a level of financial stability and independence.

Regardless of your income level, there are intelligent and manageable ways to spend money, and there are many ways that can leave you behind the eight ball and unable to pay the bills. If you’ve never had lessons on money management or have simply forgotten them over time, here are a few very simple steps you can take to put you and your bank account on the right track to financial stability and comfort for you and your family. 1. Don’t Spend it All It seems pretty simple, but spending less than you earn is an essential first step to stabilizing your situation and having something left over at the end of the month.

The easiest way to track this is on a monthly basis. Chances are you already know how much money you earn in a

month. Now get all your monthly bills you have to pay every month and add those up. After that, figure out how much money you spend on groceries, entertainment, and other day-to-day expenses throughout the month. Once you have it all added up, you’ll know if you’re saving money at the end of the month or ending up with a deficit. If you have a deficit at the end of the month, you are probably buying those extra items on a credit card with interest rates that will make you owe more money in the long run.

Stay away from a situation like that by being sure you spend less than you make every month. 2. Don’t Waste Money Having fun is important and everyone deserves to spend a little bit on entertainment and recreation every once in a while, but there are places in almost every budget where you can cut back without decreasing your quality of life. Take an honest look at what you spend your money on and find those things that are essential (mortgage, medical bills, insurance, rent, car insurance, etc. ). After that the most important thing is food.

That’s a little more complicated, because you have to buy food, but you probably don’t have to buy all the food you’re buying. See where you can cut out on junk food and other things you don’t need. Cook at home more often and eat out less. Use generic brand name products rather than popular brand names. All of this will save you money in the long run. If there are other places in your entertainment budget that you

can cut costs, do it. 3. Start Saving Early Once you’re able to put away some extra money at the end of the month, don’t spend it all at once on something. Instead, invest it in the future of your family and your own retirement.

If you put your money into a high yield savings account now it will end up paying off by a lot in the long run. How To Spend Your Money Wisely It is always important and necessary for you to understand your personal finances. Whether you like it or not, being able to learn more about your money makes you more confident in the decisions that you make in the future. When you understand these tips, your financial situation will improve. Build a budget based on your monthly income and costs. A budget is a tool to help you plan, prioritize, and manage your income and expenses.

Review your budget often and update it when you are experiencing a change in income and expenses. The key to building an effective budget is knowing exactly how much money your family earns every month. Everything you spend money on should be accounted for. Never spend more money than you have available. Take the time to record your expenses. Making a list of expenditures can help you to visualize where all of the money goes. Don't overlook expenses that don't occur monthly but are paid quarterly or twice a year. Add surprise expenses to your list, such as emergency or repair costs.

You should also include leisure and entertainment expenses on your list. Doing all of this will ensure that

you have an accurate portrayal of your expenses. Once you have established a detailed record of your household cash flow, you can create a feasible budget. Eliminate things from your budget that are not necessary. You can keep a lot of money in your pocket if you stop buying your coffee at a coffee shop or buying your lunch. Upgrades and improvements to your house can save money on your utility bills. Consider getting new appliances, like efficient washing machines or dishwashers, that use less water.

When it comes to delivering hot water, tank heaters are less efficient than on-demand or inline heaters. You should have the pipes in your home checked in order to find any leaks that may be costing you extra on your water bill. You may want to think about upgrading appliances with energy smart ones. Appliances that have circuitry that regulates their energy use save a lot of money over time. You should also unplug unused electrical devices when they are not in use. In the long run, things with the indicator lights can use quite a bit of electricity.

Another project that you can undertake is to increase insulation. You can do this by improving your walls, ceiling, and roof. You will find that your home will be able to store more heat, which can save money. This might take a lot of time, but the money saved is worth it. Although some of these suggestions may bring with them significant investments, it is still certain that they will be of worth in the long run. The money you spent on the initial invest will quickly be

returned to you in the form of lower bills. Over time, you will have a lot more money and financial freedom.

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Home — Essay Samples — Economics — Money — How Students Can Manage Their Money

How to Manage Your Money as a Student

• Categories: Money Personal Finance

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Published: Feb 8, 2022

Words: 824 | Pages: 2 | 5 min read

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10 Tips to Spend Money Wisely

W e all want to be wise with our money, right? Sounds good in theory, but how do you actually put it into practice? Let’s take action today. These quick, little improvements can have a big impact over time.

I’ve used better spending habits to help me go from a zero net worth to having over a million saved. Let’s improve your spending today with these ten tips on how to spend money wisely:

1. Make a list of what you value.

The best way to spend more wisely is to align your spending with your values .

Are you even aware of your personal values?

Take a moment to write down the things that are most important to you in life. Is it security for your family? Is it success in business? Is it helping others?

Like me ( see my values ), you likely have a combination of values.

Write these values down and then ask yourself this question: “am I spending my money on things I value?”

Then, ask “am I spending my money on things that aren’t in my value system?”

Doing this little exercise will give you some clarity and help to guide you into thinking consciously about your spending.

2. Make a list of things you really enjoy.

Along the same lines as #1, you should be using your money to bring joy to your life. You define what “joy” is. Go ahead and write that down.

What brings you happiness? Identify those things and then ask yourself if you are spending your money in those areas. More importantly, ask yourself why you are spending on things that aren’t on that list.

Bottom line: avoid spending too much money on things that aren’t at the top of your “joy” list.

Related: It’s Okay to Spend Your Money on Things You Really Want

3. Make a list of places, things, or people that cause you to make poor spending choices.

Can you identify the triggers to poor spending in your life?

Think about your spending over the past couple of weeks.

• When did you make the worst decisions (i.e., spending money you didn’t have, spending on things you don’t value, etc.)?
• What was the cause of your poor choice?

If you can identify these weak points, then you can begin to live your life in a way that helps to avoid some of these spending hot spots.

“Too many people spend money they earned..to buy things they don’t want..to impress people that they don’t like.” –Will Rogers

4. Review your regular spending for things to eliminate.

When was the last time you wrote down your list of monthly bills? Take a moment to do a thorough spending review now.

List out all of your required spending for the month. This includes rent or mortgage, insurance, debt payments, utilities, services, etc.

Is there anything on that list that you don’t need or want?

It sounds absurd to ask such a question. However, I’ll be the first to admit that in the past, there were things on my list of monthly expenses that I didn’t need or want anymore.

Odds are you have one or two yourself. If you find something to eliminate, do it. There are several negotiation apps can help you identify expenses you may be able to eliminate.

5. Review your regular spending to identify things to reduce.

Next, take a second look at that list of monthly bills and see if there is a way to reduce the cost of any of them.

• Could you call the provider and ask for a better rate?
• Could you call a competing provider to see if you can reduce your rates by switching?

If it’s a debt, could you do a balance transfer or consolidation that would help you reduce your rates and eliminate debt more quickly?

6. Create a budget.

On a basic level, a budget is simply a plan for your money. If you know your expected income next month, write that number down. Then start applying that money to different things.

Start with taxes (if it isn’t already taken out), giving, and savings. Then move to basic necessities: housing, food, insurance, utilities, and transportation. Finally, apply the rest of your income to other things you need or want.

Open up an account with an online budgeting tool like Mint.com to streamline this process.

7. Start writing down each purchase you make.

Tracking brings awareness to any situation. Use your iPhone or another device to take spending notes throughout the day. There are Apps for that I’m sure.

Or simply carry around an old-school pad and pen to jot down your spending. Do this for a week and see if your spending improves.

Related: Use These Psychological Tricks to Spend Money Wisely

8. Switch to only cash.

If you have a severe problem with credit spending, this is the way to go. Some folks swear by this method even if they don’t necessarily have trouble with credit cards.

Like tracking your spending, going to a cash-only system , if only for a week, will bring a heightened consciousness level to your spending.

9. Implement a “sleep on it” rule.

Decide today that for any purchase over X amount, you will “sleep on it.” It could be one night, a week, thirty days, whatever.

Just allow some breathing room between your desire and your decision to buy. Obviously, this gives you time to evaluate the purchase against your values and your budget.

10. Put future spending on a calendar.

Pull out a calendar and look at your upcoming events and life changes. Will spending be necessary? Is so, then make a note of that and start building a list of future spending requirements.

This is somewhat different from a monthly budget because it looks a bit further out. This does two things: (1) it allows you to prepare by saving for the spending requirement, and (2) it allows you time to shop around for the best price and lock in the lowest rates.

Have more tips? Add them to the comments below.

Philip Taylor is a CPA, writer, entrepreneur, and founder of FinCon. Philip has been quoted and featured in multiple media outlets including The New York Times , The Washington Post , Forbes , Fox Business , and more . Connect with him on Twitter or LinkedIn .

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13 Comments

Sounds very complicated but with determination and right amount of discipline this is surely doable.

These are really great points! The sleep on it rule is really my favorite! It works best together with being aware of your budget!

Interesting story, Janette. Thanks for sharing.

Actually, if you tend to use a debit card (as I do), you don’t need to write down every purchase so much as keep your receipts.

Recently took a trip with only cash (#8). It was a bit scary to carry that much cash. What I found was the amount I spent on the trip was much less than normal. I paid for EVERYTHING in cash- from gas to hotel room to eating out to groceries. Next time I will just put $1000 in an account with a debt card, but I needed to know what it felt like to touch the money We travel to see family four to six times a year (#10). They all live between 1500 and 2000 miles from us. We spend, on an average, $1500 for the two of us on each trip. Now that we are retired, knowing that budget is important and paying in cash is the best way to handle it for me. After this trip I really realized that going on “other travel trips” (#3) are nearly impossible if our priority is to stay where we are and still see our family. We no longer journey to Target or the mall in our spare time (#3).The children, mom and grand baby are all worth it!(#1and 2). Well written numbered list!

Swith to only cash – you mentioned this is good for people who struggle with credit cards, but it’s also great if you struggle with DEBIT cards. We always seem to have enough in our checking account to spend on misc items with our debit card, but that money was allocated towards something else in our budget. Plus research shows that when you “swipe” your card to pay (debit or credit), you spend MORE money on purchases, many times without even remembering how much you actually spent. It’s much harder to part with cash. You can see it and feel it dwindling in your pocket (or envelope) as you spend it, knowing it won’t be replaced until the next budget cycle.

@Jason – Excellent point. I didn’t think about that but yes, long after you’ve stopped tracking you’ll have better awareness in general. @Jon – Some recommend a 30 day rule for larger purchases.

I like cash-only.

#9 is the single best piece of advice I have heard. Sleeping on it has saved me a nice sum of money. Typically, I end up waking up and realizing that I don’t really need to buy it!

I think the 7th rule is the best, because that way you actually think about what you’ve done instead of just forgetting about it. This will create valuable spending habits in the future.

love the “sleep on it rule.” Saved me bunches.

The sleep on it rule has always been a huge money saver for me! Even better is to have to save for it. I’ve always waited to buy big purchases until I’ve had the money and tried to find it online cheaper in the meantime!

At some point, we all need to create a budget to control our spending. This blog is actually helpful helpful to analyse my expenditure and sections where I can control my transactions. Someday, I might want to try the online budgeting tool to ease the process. I will need some dedication to follow these steps, but will surely try my best.

Comments are closed.

Test Resources

TOEFL® Resources by Michael Goodine

Sample toefl essay – spending money, the question.

Some people like to spend their money as soon as they earn it, while others think it is better to save their money for some time in the future. Which do you prefer? Use specific reasons and examples to support your opinion. Do not use memorized examples.

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The Sample Essay

           Money concerns are a major cause of stress and anxiety in the modern world. In my opinion, it is a really wise idea to save money for the future.  I feel this way for two main reasons, which I will explore in the following essay.

           To begin with, older people are able to make better financial decisions than youngsters due to their experience and maturity.  Young people, who have very little worldliness, are prone to spending their money on products that are mostly useless and which they quickly tire of.  Older people, on the other hand, know which purchases will result in long-term happiness and satisfaction. My own experience is a compelling example of this.  When I was young, I spent a tremendous amount of money on video games and comic books which I enjoyed only for a short time. Later, when I enrolled in university, I did not have enough savings to pay for my tuition, and was forced to take out a significant number of student loans.  Even today, several years after graduation, I regret not saving much money as a teenager. These days I am a lot more conservative when it comes to spending, and carefully consider all of my future expenses.

           Secondly, life is full of unexpected emergencies which can cause a lot of anxiety if we do not have a lot of money saved up.  According to reports in the media, more than seventy-five percent of all bankruptcies in my country are the result of medical bills. I am totally aware that it is humiliating to lose our financial independence in this way.  For example, last year my uncle suffered a major heart attack which required him to undergo very expensive cardiac surgery. He did not have enough money to pay for this procedure, so he had to ask his elderly parents for a loan.  They were able to help him because they had resisted the urge to spend and saved money through their entire lives. He felt extremely embarrassed about begging his parents for assistance, especially as he could have avoided the situation by emulating their frugal behavior.

           In conclusion, I believe that it is better to save money for the future rather than spend it right away.  I feel this way because we gain the ability to make better financial decisions as we mature, and because saving money helps us avoid the humiliating effects of unexpected financial emergencies. (405 words)

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The Impact of Professional Scholarship Essay Writing Services on Academic Success

I t’s hard to overestimate the usefulness of writing services for someone who needs a good essay for a scholarship application. At the same time, there are some concerns about the probable negative impact of writing services on academic success. Let’s consider both the potential negative and positive impact of a scholarship essay writing service to decide what’s stronger.

One of the most widespread concerns about the impact of essay writing services is the ethical side of use. Evidently, it is improper if people will provide someone’s work as their own. Even though such concern cannot be called groundless, it’s a matter of choice. Writing service is a tool, and it’s only the customer's choice how to use it. A person can buy a knife to cut fruits and vegetables or to take someone's life. This is not about the tool but about the ethics and decisions of the particular person who uses the tool.  

Another concern is related to the dependency. When people overuse writing services and outsource their own tasks to other experts, it rather decreases their own skills that ought to be developed with the assignments. It’s once again about human conscience and ethics. In this context, it can be useful to compare writing services with coffee. Sometimes, this drink can be very useful to help you wake up or not fall asleep for longer. However, with excessive use, it can be harmful to health and be addictive. And, if you are regularly using coffee to wake yourself up or to stay awake, you probably have to reconsider your time management.

One more concern is about the money. Writing services obviously don’t provide their help for free. Hence, the frequent use of it can cause a financial burden for people who use such services. Thinking this way, one can assume that any type of purchase can cause a financial burden. Most writing services insist on price transparency and the absence of any hidden additional increase in the price. One can see the price before placing an order and deciding whether this money will harm the budget.

As you can see, although the concerns about writing services aren’t baseless, they’re more about the weakness of human nature than about the negative impact of writing services themselves. People who can act unethically will find their way with or without writing services. And if a person has trouble managing money it will be evident from the different aspects of life, not only the use of writing services. You can be careful using writing services, but not more careful than with anything else in life. 

Except for the concerns considered above, writing services can also positively impact academic success when used properly. A person who needs to write a scholarship essay often faces the problem of procrastination and blank page syndrome. In such a case, help from a writing service can be incredibly useful to overcome the problems. A person can use the paper from the writing service as an example to follow or, in contrast, decide that everything must be written differently. Most importantly, one will start working on the scholarship essay instead of waiting for inspiration or being lost in anxiety. 

• The positive impact on mental health comes from the previous advantage. Applying for the scholarship is a stressful process. A person is concerned about all the papers that must be gathered and forms to be filled out in the proper way, about the future if the scholarship will be obtained, and about the development of the events if not. Writing services that provide personalized examples of scholarship essays can help reduce stress and anxiety and, hence, have at least a small positive impact on mental health. 
• Expert guidance can be crucial for a person who needs a scholarship. Yes, you can find free examples of scholarship essays on the web, but you might not be sure which is most suitable for your particular case. Writing services have professionals who often write scholarship essays and know their specifics. In addition, a personalized example is the most useful one to understand what and how you can write to succeed. 
• Time management is the last but not the least point in this list. Writing services have short deadlines of just a few hours, which allows a person to get a ready example on the same day it was ordered. This saves time that a person might spend reading and understanding the nuances of the scholarship essay. Instead of that, one can take this time for other no less essential papers or activities related to getting a scholarship.

Final words

As one can see, scholarship essay writing services can potentially negatively and positively impact academic success. Such services can be a powerful tool to save time, avoid stress, and get a well-written personalized example of a scholarship essay. However, as well as in the case of any tool, it must be used wisely and ethically.