Have you ever imagined how life would be if you could have everything you want and need?
The good news is you can – especially with good personal finance management. Once you’ve mastered that, you can discover a balance for yourself without sacrificing too much! In this article we’re going to cover a few important points on how you can make better spending decisions, know when to splurge on your wants, and remind you how effective budgeting is.
Hopefully at the end of this article, you’ll be able to enjoy life as you have imagined it to be!
Making Better Spending Decisions
The magic to truly enjoying the best of both worlds is the financial decisions we make daily. Here are a couple of examples on how you can make better spending decisions between your wants and needs.
Scenario 1: Satisfying your food cravings.
Got a craving you must satisfy? There are many smart ways to do it and here’s how. More and more restaurants are collaborating with banks to offer their customers all sorts of promotions. In order to satisfy your cravings and save at the same time, spend smarter by paying the bill with your card instead of cash to enjoy discounts and free food! Besides that, lunch set menus are also a great option. You’ll get a main course of your choice, a drink, and a dessert – all for less compared to single items on the menu. This way, you get what you want and still have extra cash in the bank. Not too bad, right?
Scenario 2: Sales Shopping
It’s tempting to buy things when they’re on sale especially if there are signs like “Buy 2 get 1 free”. But hold on for a second, do you really need to stock up 3 bottles of shampoo? A sale is supposed to help you save, not spend more than you should. Hence, always ask yourself if you really need something before purchasing it. Remember, if an item is $100 and it’s going for $70, you did not save $30. Instead, you’ve spent $70.
Know When to Splurge
Needless to say, we want to be able to enjoy all life has to offer. We want the latest iPhone, luxury branded goods, the best travel experiences, and the list goes on. It’s natural to have many wants, and there’s no shame in that. It’s exciting to buy and experience new things! However, how do you differentiate what’s worth splurging on and what is not?
Here’s a rule of thumb we would like you to know. A good practice is to ask yourself if an item has a promising resell value. How much you would pay if the item you’re about to buy is sold to you second-hand? These simple questions can teach you to become more mindful of where your money is going. For instance, if you’re buying gold, you’ll probably have be able to get a good resell value. On the other hand, if you decide to splurge on a branded plain white t-shirt for $500, chances are you’re not going to earn as much if you decide to sell it later on.
A worthwhile idea to consider would be splurging on meaningful experiences. You can consider this as investing in yourself, and in life! It could be travelling to a place you’re unfamiliar with to explore a different culture. You could even do something special for your loved ones like taking them out for a buffet or buying them gifts. Not only will this strengthen the bond you have with them, but it also allows you to build a better relationships, which in turn create more meaning in life.
Remember to think carefully before spending and choose to splurge meaningfully so that you have more to spend on other things that matter. After all, you wouldn’t want to throw away your hard-earned money. In the long run, you’ll only have yourself to hold accountable for.
Budget and Track Your Spending
You’ve probably heard about budgeting a thousand times by now. If you’re already doing that, great job! But if you haven’t, the best advice would be to start now. A lot of people have the misconception that a budget sheet is restrictive, but that’s not exactly right. The true purpose of budgeting is allowing you to spend freely without having to lose sight of your financial goals. That sounds like a win-win situation to us!
A clear overview of a budgeting sheet allows you to track your spending habits, it reminds you of what the bigger picture is. Perhaps yours is achieving financial freedom, opening a business, or early retirement. With your goals in mind, you’re able to plan, monitor, and adjust your finances accordingly. A budgeting sheet enables you to achieve those goals. So, treat it like your little personal finance assistant.
If you don’t know where to start, don’t worry. We’ve built a savings calculator based on the 50/30/20 budgeting rule. All you have to do is enter the amount you spend on a monthly and weekly basis for all your wants and needs. At the end, we’ll provide you with the a recommended budget for you to kickstart your budgeting journey. Wave goodbye to guilty spending!
People who often achieve great heights, often have great self-discipline. With good financial management skills, you too, can afford to get what you desire and at the same time pay for your needs. You could even expand your constraints and grow your income to enjoy more wants and pay off more needs. Either way, don’t forsake your your long-term goals for short-term pleasure. Remember, having a balance is always more important (and realistic!) than ‘having it all’.
