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Tuesday, May 26, 2009

Resolve to be smart with your money

Resolve to be smart with your moneySocialTwist Tell-a-Friend
Resolve2day…
To sort out your finances and be a good saver

Hi, I’m Clare, a friend of N.C. Ronia’s from England and I am Resolve2day’s guest blogger today!
The topic I’ve chosen is: Resolve to be a good saver – I hope the following tips will show you that it is a lot easier to manage your money than you thought.

I can’t tell you how you can get rich, and you don’t need me to tell you that the way to save more money is to spend less, because everyone knows that. But I am going to give you a few tips on how smart management of your money can help you keep more of it! These methods are ones I use myself, and they work for me.

1. Set yourself a budget – this is the best way to stop yourself ‘frittering’ your money away. Work out how much you earn per week/month, how much of this you need to save and spend on bills and necessities, and then how much you have left to spend on yourself. Ultimately there’s no one but yourself to stop you buying that pair of shoes that you can’t really afford, but setting limits really does help with the self-discipline.

2. Write it down – making a note of what you buy lets you see exactly where your money is going. This means you don’t have those moments when you look in your wallet and think: “Where did it all go?” Personally I think that one of the most effective ways of turning yourself from a reckless spender into a good saver is to simply keep tabs on your own spending.

3. Do the maths – a good way of stopping yourself buying things you don’t really need is to think about what you could spend the money on if you saved. Each individual dollar/pula/pound that you spend may not seem like much, but it all adds up. For example, maybe you buy a coffee every weekday morning for $2.50. If you stopped doing this and made your own coffee at home or work, you would save $50 a month and $600 a year! That’s a pretty decent amount to save, or it could pay for a holiday or go towards a car. In short, that $600 could go to much better use than an over-priced coffee.

4. Practice delayed gratification – that is, waiting for something you want. The opposite is instant gratification, i.e. getting what you want NOW. Psychologists think that the ability to practice delayed gratification is linked to intelligence – that is, intelligent people are better at waiting for (working over a period of time to obtain) the things they want, and less intelligent people are less able to wait. The thing about delayed/instant gratification is that it usually means a choice between having something good now or having something GREAT later. This fits in with number (3) in this list.

5. Don’t buy without comparing prices – it is pretty annoying when you buy something and then see the same CD/jacket/book somewhere else at a cheaper price. This won’t happen if you compare prices. This is particularly easy to do online. I often buy DVDs from Amazon, Play.com or HMV.com (these are UK-available sites) and I always check the price of a DVD on all three sites first and buy it from wherever it is cheapest. There are also loads of comparison sites that do the work for you. You just type in the product you want to buy and the internet compares loads of online stores and tells you which is cheapest. As for when you are actually out at the shops, some bookshops, DVD stores, music stores etc. are much cheaper than others. Don’t spend more than you need to if there’s a shop round the corner where you can buy the same product for less.


To summarise, I think that being AWARE of your own spending is one of the most effective ways of spending LESS and saving MORE. When you keep an eye on your finances it doesn’t necessarily mean you don’t get to buy the things you want, it just means you give a second thought to opening your wallet and are more conscious of what all the small amounts add up to. I hope some of this is helpful to you and I wish you happy saving!

Clare

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