Smart Spending

We all spend money each day on things we need, want, and maybe neither need nor want but still spend the money anyway. If we are going to be spending our hard earned money, we might as well be smart about how we are spending it to get the most value. For many of us, we trade time for money. We work 40 hour weeks for a set salary or we make a set amount per hour for every hour that we are clocked in. We should think of spending money in terms of how many hours of work are required to achieve the thing we want to purchase.

To get the most out of your purchases and consider the money well spent, there are a few things to consider when making purchases.

Making My Money Go Further

Shop Deals Only For Items I’d be Buying Anyway

Just because something is on sale doesn’t mean you should buy it. If I walk into a store not planning on buying a mattress, chances are, my mattress is fine and I’m not looking for a mattress. If I see a mattress for 30% off of $2500, this appears to be a great deal. I would not save $750 by purchasing the mattress but rather, I’d be spending $1,750. I’ve almost fallen victim to this many times as marketers know what they’re doing to instill urgency that generates sales. Life is filled with unnecessary upgrades that won’t make you happier, healthier, more comfortable, or fix areas that are lacking for other reasons.

Avoiding Impulse To Make Better Purchasing Decisions

When I see something being advertised, a friend gets something, or someone recommends something to me, it can seem like I must have it and I start running through justification in my head for why I should get the said thing. Waiting a few weeks and gauging whether or not I still desire the product after some time has passed will help me determine if I still need or desire it enough.

Buying Items Second-Hand

There are people who purchase various items that then sit in a closet, garage, or shed. These items are later sold on Marketplace, Ebay, Craiglist or at yard sales in mint condition. Whenever I need to find sporting goods, tools, materials, electronics, and some other things, I will see whats available on the used market to start. Here are just a few of the many things I’ve purchased used either online or in person meeting up with the seller:

1 year old Taylor Made golf clubs (saved 60% off new)
Gas powered, self propelled lawn mower (saved 70% off new)
Canon 70D DSLR camera (saved 40% off new)
2007 Chevy Silverado pick-up truck
Complete combo kit of Craftsman cordless power tools (saved 90% off new)
A never installed replacement window for a house (saved 65% off new)
Used outdoor patio pavers (saved 90% off new)
Various computer monitors (saved 40-50% off new)
A washing machine for a rental property (saved 70% off new)

Credit Card Points and Rewards

Use Credit Card Points For Travel Expenses

One of the best uses of credit cards is redeeming the points for products and experiences that give you the best redemption rates. This is usually found when redeeming for reward travel.

Take Advantage Of Card Protections And Insurance

Primary rental car coverage
Lost or delayed baggage insurance
Purchase protection that includes extended warranty or extended return timeframe
Cell phone damage or loss protection
Event ticket protection

A Small Leak Can Sink A Big Ship

Subscriptions Are Another Monthly Bill

More often than not, subscriptions are not used to their fullest each month. Don’t let unused subscriptions steal $5, $25, $69 or even $200 each month from you. I always analyze my statements to see how much I use subscriptions over 6 or 12 month periods. It’s better to cancel, miss it, and sign up again than let it stay active because you think you’re going to use it.

Unnecessary Luxuries

Uber Black
Business Class flights
Door Dash / Uber Eats / Grubhub / Postmates etc.
The latest iPhone
Designer Clothes
High-end car paired with a high monthly payment
Expensive restaurants / clubs

The Small Things Add Up

What hurts personal finances lies less in the occasional big purchase and more in the small purchases made very frequently. The $7 latte every day, the Uber rides all weekend, the cocktails at the bar after work, and the food delivery apps can end up being a pretty big hole in your piggy bank.

Building A Budget You Can Stick To

The best budget is the one that allows you to spend on everything you want to in order to live the best life possible. I view a budget as something that tells me how frequently I can do something rather than saying I need to cut certain things out of my life entirely. My budget consists of a yearly vacation or two, dining out, going to concerts, getting coffee at nice coffee shops while also being able to invest for income and retirement, have an emergency fund, pay my necessities and other essential needs.

Tracking All Expenses

I like to track my expenses using a few different tools and methods. With AI, I can upload my monthly checking account and credit start statements to have it run some data analysis. Sometimes, certain spending categories will jump out as high while other times I find some unused funds allocated elsewhere.