Keeping Spending on Track

Q.1. How do I avoid overspending?

In order to keep spending on track you need to have a plan. That means that you need to establish a budget and keep it up to date. Always make a list before you go shopping and shop according to that list. Avoid impulse buying but be prepared to take advantage of sales that will help minimize future costs.

Q.2. How do I know if I am spending too much?

Often, people spend money to reward themselves and feel better and many times, that spending is beyond what they can afford. There are indicators which help you decide if you are spending too much on a regular basis. It is important to monitor your spending habits to ensure that you do not overspend.

Q.3. What’s the difference between expenses and spending?

Expenses are costs that are required for you to maintain your lifestyle. Spending is an optional activity that you choose. In other words, the difference is between what you need to have and what you want to have. Smart money management ensures that expenses come first.

Q.4. Is there such a thing as smart spending?

Certainly, there are smart ways to spend money. Making a wise investment which will grow in value, such as purchasing a home, is an obvious example. Buying sale items which you need and will use is another example of smart spending. Other spending which will help you have a better future, such as pension plans, is smart investing. The key to smart spending is to spend your money on items of lasting value and do it with care.

Q.5. What are some ways of keeping my costs down?

Know the difference between needs and wants. Comparison shop before you purchase and do not overbuy, that is, unnecessarily purchasing a more expensive item. Shop off season because items are always cheaper at the end of the season. Check flyers and newspaper ads for coupons and sales. Consider buying generic items rather than name brands.

Q.6. How do I keep my entertainment costs down?

Enjoying life is important. There are ways of keeping entertainment costs down without eliminating the activity. It just requires some creative thinking and comparison shopping.