Wednesday, February 5, 2014

Spending Money for the Right Reasons

Spending money is something that many people like to do.  I’m not one of them.  Therefore, when I have to spend money, I do so for the right reasons.  You might be wondering how there are “right” and “wrong” reasons for spending money.  Well, there are.  And our family has learned that knowing right from wrong when it comes to spending our hard-earned money can add up to big savings and increased financial stability.

We use a coupon to save; we don’t spend to use a coupon
A close relative of ours often uses coupons to justify spending.  Whether it’s on food, clothes, or sundries, a coupon is an excuse to spend in this person’s mind.

This is what retailers expect; that’s why there are so many coupons out there.  But this sort of attitude can be dangerous to personal finances, and it’s exactly why we only use coupons when they are for products or services we already purchase and are one of the best values for our dollar.

For example, when we go out to eat, we already know the spots that give us the best bang for our buck.  However, if we can pair such a locale with a coupon when we’re planning to go, all the better; but we won’t go just because we have the coupon.  This keeps our monthly dining budget close to $50, where as according to Bundle.com, “The average monthly cost of Dining Out for people in the U.S. is $281”, and the median monthly expense is $135.”

We get rewards to use our credit card; we don’t use our credit card to get rewards
I see commercials for credit cards with people vying to purchase products with their cards so that they can get the rewards.  While rewards for card usage can certainly be a perk, it’s not why we would utilize a credit card.  Rather, we look at rewards as a benefit that comes with the convenience -- and at times safety -- of credit card use, not as a reason to use a credit card. 

Maybe this is why according to CreditCards.com -- and based off the TransUnion analysis of May 2013 credit files -- the average credit card debt per U.S. adult, excluding zero-balance cards and store cards is at $4,878, while our family’s credit card debt is at zero.

We buy used to save; we don’t save to buy used
We don’t have to buy used; we prefer to.  It’s not that we’ve spent all our money and are forced to save just to buy used, but if we have the option to buy something used, (but still in good condition) for pennies on the dollar of what we’d purchase it for in a retail setting, in most instances we will.

This helps us keep things like our clothing budget between $300 and $400 annually for our family of four (most being spent on shoes and undergarments), and buy things like books, video games, movies, toys, and even certain home furnishings for just pennies on the dollar compared to their retail counterparts.

I go on vacation to work; I don’t work to go on vacation
I know it might sound weird, but I get some of my best work done on vacation.  Having the motivation of getting out to the beach or pool to enjoy time with the kids often pushes me not only to be productive, but puts me in a better mood which seems to heighten my work output and quality.

Some people save all year to go on vacation for a week, maybe two weeks if they’re really lucky.  That used to be me.  I’d kill myself all year for a chance at a week of enjoyment.  And while I made better money back then, frankly, my life was pretty crummy.  Therefore, I made the move to self-employment.  Now I don’t have to work just for that one week, but instead enjoy my life and my work so that I don’t mind taking my work on vacation with me and I continue to earn even while enjoying time with the family.



Disclaimer:

The author is not a licensed financial professional.  This article is for informational purposes only and does not constitute advice of any kind.  Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.

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