Smart Ways To Spend And Save

By Marta Maslej
[Personal Finances]
Is there a way to make budgeting less tedious and more enjoyable?  Marta Maslej shares a few easy tips to keep in mind when saving and spending your hard-earned dollars.
Whether you’re planning an enticing but very expensive getaway or just looking to be smart with your money, it is important to have a sound perspective on budgeting.  Unfortunately, the concept of saving money has negative connotations, bringing forth memories of endless lectures from concerned parents or trying to make it in the house unnoticed to conceal a cluster of bursting shopping bags.  This happens because we associate saving with completely depriving ourselves, living on generic foods and wearing clothing from seventh grade.  Consequently, we decide that no amount of saved money is worth this lifestyle and go back to our reckless ways.  The key, however, is not in the amount of sacrifices we make, but how smart our choices are.  Here are a few tips that will help you make practical decisions about your spending.

Tracking And Planning

An obvious starting point to creating a practical budget is assessing, very realistically, your financial situation.  After you have subtracted your necessary expenses, such as food, transportation, rent and bills, from your income, you will be left with a number that will determine the flexibility of your budgeting choices.  At this point, it is important to take into account any long-term goals.  If you are saving up for a concrete expense, such as school or a car, determine how much money you will need to set aside monthly to achieve your goal, factoring in a desired time frame.  This cash is best kept in a separate account; the harder to access, the better to eliminate unnecessary temptation.  As you track your income and expenses regularly, you will be able to make short-term plans.  For example, if your savings fall short one month, you will know to pick up a few extra shifts next month and vice versa.  While tracking every single expense is tedious and impractical, having a general idea of your financial situation will definitely allow you to make smarter choices regarding your budget.

Emergency Fund

While you may not have a concrete, long-term goal to save towards, it is always a good idea to have an emergency fund that you can rely on in times of need, a larger version of the ‘take a penny, leave a penny’ idea.  This can be kept in a separate account, if you wish, but make sure you’re not paying a fortune to access this money.  Most people misinterpret this idea and fail to see the point in leaving money aside for grave emergencies that probably won’t happen anyway.  Contrary to popular belief, this money becomes handy for more than just earthquakes, hurricanes or floods.  Its purpose is to help provide for an unexpectedly large bill or even in an instance where it’s less expensive to pay immediately.  In any case, it is nice to know that you can cover much of this cost, should it arise, without paying insane interest rates.
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