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How to Make Better Spending Decisions

Spending money is not a problem in-and-of itself. It’s how you spend money, and what you spend it on, that can get you into trouble. Just ask the 71 percent of Canadians who say they regularly dine out or the shocking detail that over half of Canadians are only a couple hundred dollars away from not being able to pay their bills. The truth is, we can all get better about our spending decisions. So, where do we start? Right here! Check out these tips to help you begin making better choices with your money.

 

Step 1: Find Out How You Spend Money

Believe it or not, our spending habits have a lot to do with our emotions. Bored? Let’s go out to eat. Insecure? Let’s buy those new shoes. Feeling like something is missing? Let’s fill it with things. Then there’s just simple convenience purchases, those things that we buy to spend less time making or doing something.

In order to find out how you make spending decisions, there are two things you can do.

  • Take this spending decisions quiz. It will ask you just a few questions such as how spending makes you feel and what you do when making a big purchase, for example. The quiz will tally up your score and provide you not only information on what kind of spender you are but a quick tip or two on how to improve your spending habits.
  • Compare your receipts and bank statements. Let’s say you go to the store to buy a few household items. In reality, your bank statement should reflect the cost of those purchases. But if you pull out that receipt, you might find several items on there that were entirely unnecessary. If you add up those impulse purchases each time you shop, you might find a startlingly high dollar amount that could’ve been put towards your savings or to pay off an outstanding debt. If you are willing to practice this approach each time you pull out your wallet, you might find that you can put the wallet back before you get to the counter.

 

Step 2: Decide Which Spending Habits to Focus On

Because each of us is unique, we likely have different spending habits that might need to be corrected or broken. To begin the process, we need to look at where we individually go wrong. Despite our uniqueness, there are some common ways we are all guilty of going over. Every Dollar offers a few common spending habits to help you get the brainstorming process started:

  • Going over your cell phone plan’s data limits
  • Eating out at restaurants when there’s food at home
  • Buying a duplicate of something because you forgot you already have your own at home
  • Impulse online shopping
  • Thrill shopping the sales section

Finding out which bad spending habits you have is not about judging or being harsh on yourself. It’s simply a chance to be honest with yourself with the belief that you will make the changes you need to get back on track.

 

Step 3: Make the Switch to Good Habits

Once you’ve determined what kind of spender you are and where you make your bad spending choices, the next step is working towards creating healthy spending habits in place of the bad ones. So instead of quitting cold turkey, you are just swapping out the negatives for the positives. Over time, those good spending habits will start to become routine, hopefully replacing your bad spending habits. Here are some tips from My Money Coach to help you take this last, challenging step!

 

How to Avoid Impulse Spending

One of the easiest ways to avoid putting things in your cart that you don’t need is to create lists before you go to the store and stick to them. If you find yourself tempted to purchase things that are not on your list, try to limit how much money you take with you to spend.  Instead of taking your debit or credit card, try taking only cash instead.

 

How to Avoid Eating Out

Each week, we often tell ourselves that this is the week we’re going to buy food from the grocery store and eat it all week. This is done with good intentions, until Wednesday, when we’re sick and tired of the simple food we bought. The solution to this is to treat yourself from the grocery store itself. Buying in bulk doesn’t have to mean you eat the same boring things every single day. Plan better with several recipes that will stimulate your appetite and keep you looking forward to your lunch each day. Simply put, pack tasty, enjoyable food in with your healthier, less exciting options. Try to take a few hours each Sunday to meal prep through Wednesday, and spend some time Wednesday night preparing the remaining week’s options. Set aside one or two meals each week that you know you’ll need to eat out, say on a busy day or one weekend night.

 

How to Avoid Overspending

Instilling better spending habits doesn’t mean we never spend, it just means we get smarter about how much we spend. Plus, purchases that are larger in cost will inevitably need to be made. So, how do you get smart about spending? By not overspending. That means comparison shopping, taking the time to research your options and the various costs at different stores. It can also mean looking into buying used items. For example, a used washer and dryer can cost hundreds less (if not thousands) than a brand new washer and dryer and they still work great. The same can be said for buying a used car versus a new car.

 

How to Avoid More Debt

It’s a given that by not spending, you will avoid more debt. But that’s not the only solution. You can also avoid more debt by buying back the debt you already have. Each time you feel like splurging on something you don’t need in order to resolve an emotion you are currently feeling, turn instead to your credit card or student loan debt and make a payment. Not only are you solving your need to spend money, but you’re doing it in a way that is helpful to your financial situation both now and in the future. The more often you do this, the more likely you will begin to get that satisfying feeling each time you pay down your loan a little more.

 

How to Put Yourself First

The same practice of buying back your debt can be done in your savings account, too. Whenever you put money into your savings account, you are buying a bit more financial security for yourself. It’s a self-care practice that does more for you than any blouse or pair of shoes can do for you. Again, whenever you feel the impulse to purchase, put yourself first and buy independence, safety, and security for your future.

The path to making better spending decisions starts with you! We all have the power over our own impulses, even if that means simply trading the bad impulses for good impulses. This new way of spending won’t happen overnight; be patient with yourself and keep trying, even if you veer off track. While you take these steps to better spending, 310-LOAN is here to help you get through with Canada’s fastest payday loan. For more spending and saving tips, check out the 310-Blog section now!

 

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