I created this site to give a fast and foolproof guide to staring a smart money spending lifestyle, without having to learn difficulty investing formulas and boring formulas.
I also wanted to help you the expensive mistakes that most people do before reach financial happiness.
About me:
I discovered on my late 20s, how money works. I thought about it since I was teenager and I discovered some very important things. Am I rich or wealthy? I am both wealthy by money and rich by money intelligence.
The object of this write up is to bring you think about your money spending with the motive to provide some smart solutions that you should spend your money on.
P.S. This guide is 1,200 words long which means roughly 5 minutes of reading. So grab yourself a coffee, tea or juice (whichever you prefer) and start with STEP 1. If you get stuck, send me an email and I’ll do my best to help you out.
Ready to achieve a financial happiness? Let’s get started…
INTRODUCTION
Starting from a question that knocks everyone’s mind; What is saving? and coming up with its very simple answer, when your expenditure is less than that your earn.
But, it does not happen that much simple. And quest to find its answer make me face giggling words like, money savings, 50 tips for saving money, smart money decision, become financially smart, smart money spending etc.
If anyhow, I succeed to understand these highly technical words another cluster of alluring words like smart investment, spend money wisely etc. were standing ahead. And try to educate me regarding best utilization of my savings.
It drags my simple thoughts to complicated ones and their difficult answers. But, I tried to come by this making it simple again.
Related: Where to start investing
CONSUMPTION BEHAVIOR
Starting from looking into our consumption behavior, it is evident from my monthly outlay that we spend our money income in two ways;
First: on necessities that includes our needs i.e. grocery, utilities, accommodation and traveling.
Second: part is that we like to do including our hobbies, recreation, ambitions or things that we are interesting in.
The first one are the things essentially connected with our living. The second category includes non essentials. Being a lively and free nation we are found of spending on non-essential goods.
Statistics shows that average (inflation adjusted) median income of house hold is America remain around $50,000 and spending statistics shows that major part of our income goes to housing, then Food and Clothing, Traveling and then recreational activities.
So the first thing that grasp our will to spend more on non essential goods, is housing. And it’s the first major concern. Think if one has the pleasure of owned house, a major portion of his income can be saved and be spared to spend on hobbies, recreation and other ambitious purposes.
Here emerges another question i.e.
How can we save money?
It’s very easy to earn money and more easy to spend it but, usually thoughtless spending of money cause to stress with money crunch at the end of weekend (pay cycle). I figure out following ways to spend smart ways and save;
First of all I need to form savings. How savings can be maximize?
When meant to save money it is clear that cushion to save is less from essentials. Simply means that we cannot reduce spending on goods that fall under essential category in our purchases. Anyhow a little cushion of saving can be created from this category. But anyhow some tips can be exercised;
How saving can be created from essentials?
- Housing: Here from housing I mean housing arrangement that one has if we can find out cheap housing arrangement according to need or can save to purchase a house it can raise a cushion. Kind of sharing living arrangements can be looked into to save money.
- Utilities: Like electricity, sanitation arrangement. US household spends more than UK household on utilities. These gas and electricity usage are directly associated with temperature. Like in summer for air conditioning and in winter for heating and warming. Taking appropriate measures like avoiding thermal envelope, air leak. Using less consummated appliances.
- Gas: Traveling cost specially through public and private conveyance can make visible difference in gas cost. Maximum use of public conveyance like metro can save a good amount of money.
Spending less on non essentials can easily be adopted. Saving today and then investing it on productive places will give a long way to earn more and spend on desired non essentials.
Smart ways to spend your money on
Saving can be multiplied by investing them in useful and productive ways. This is what we aim to figure out.
YOURSELF – FUTURE (INVESTMENTS)
When saving today we aim to enjoy it in future. While sacrificing our ambitions today we aim to enjoy bigger ambitions in future. But our agenda should be to save and spend for your-self. What do we mean from spending on your-self?
SPEND MONEY ON YOURSELF
Spending money on your-self refers to spend money for your personal needs. Not the housing, electricity, utilities, grocery. Especially for women it’s like doing shopping, purchasing for kids family and making fashion, up keeping personality, Dying hears, piercing nose, ear or Bally button.
To earn money seems a conventional thing but to spend money and especially on your-self seems something that brings confidence in your personality.
What possible plus points you can enjoy spending money on your-self?
1). It generates a positive sense of confidence in your personality.
2). It broad your vision by interacting with new people, new places and new systems.
3). It increases your knowledge by visiting various options of the things available, their marketing gigs besides telling their features educate you a lot and give confidence of decision making.
4). It helps to know and plan new consumption patterns keeping in view the market trends.
5). It helps in making you happy, satisfied and hence prospers.
If you don’t invest to yourself, then it’s hard to make wise money decisions for future and entertainment. Like life should be learning cycle;
LEARN SOME NEW SKILLS (SAVE-INVEST)
Develop some skills of saving money which you have even small talent. These May be you have skills which human kind is looking for?
Saving through controlling your budget, how?
Budget your weekly, monthly and yearly expenditure, how?
- Write a diary of your weekly expenditure for two months every season
- Consolidate it for quantity, type and amount of money spent on each item
- Convert it to major heads like grocery, utilities, gas and entertainment
- Identify occasional needs like Christmas, Easter and community (kitty) parties
Make pockets for expenses
- According to your estimated needs from budget prepare pocket for each expense’s major head
- Strictly try to spend from those pockets.
- Don’t mix changes or allotted money to other pocket expense
- See what expenses can be avoided from pocket expenses. Manage saving from those pockets which falls under non essential category.
HOW TO INVEST MONEY WISELY?
Ooohhh! At last saved a lot on our advice but where to invest it? It’s the question coming in my mind right now….. Let us figure it out together. Investment can be simply of two forms,
1st, long term investment
2nd, short term investment
1st, Long term investment payback high returns but thereby you are supposed to fix your amount for at least a year (financial). And it’s better to go for it if funds that you are going to invest are that much spare.
2nd, short term investment payback less return but it’s usually for less than a year. Probably six months and the most decisive feature of it is that it’s liquid (liquid means can be converted into cash anytime)
If you are in America or anywhere in Europe? We can suggest you the modes of investment (short / long) if you provide some basic information.
How to Save money When You’re Broke? Read more Here