One of the ways to find yourself in financial trouble is to waste your money. In order to get your finances back on track, you need to be able to identify money wasters in your budget, and then make an effort to stop spending money on those items.
Will you spend some time today to improve your financial picture? Here are some questions to ask yourself as you attempt to determine what constitutes a waste of money:
Do You Need It?
The first question you should always ask yourself is whether or not you need the item or service in question. Carefully think about the difference between needs and wants. A need is something that you require for survival. This includes food, shelter, basic clothing, and transportation to a job. While things like TVs, cell phones and other consumer products might be pleasant to own, they are in no way needs. Even some “needs” aren’t really needs.
You can convince yourself that it’s ok to eat out all the time because you “need” food. But is this really the case? You can save more money if you plan your meals and purchase fresh ingredients to prepare your food.
If you have good public transportation that can reliably get you to work, you don’t actually “need” a car. And it’s extremely rare for a family to “need” a McMansion when a smaller home has adequate space. Be realistic about your needs; if it isn’t a need, it could be a money waster.
The examples are endless. Is cable TV a need? It’s certainly a common expense that almost every family pays for, but a monthly subscription is definitely not necessary. How about a cellphone? Maybe that qualifies as a necessity, but the high price plans that most people pay for month-to-month can certainly be reduced.
Will You Use It?
Let’s get back to that beloved cable TV subscription for a second. Of course, you don’t have to restrict yourself to just the basic necessities of life if you have enough money to purchase a few wants. However, it can still help to reduce your financial waste by figuring out whether or not you will actually use the product or service.
What is the point of having 500 channels if you only watch the same 10 channels on a regular basis? Even if you can afford the premium cable package, the fact that you really aren’t using it means that you are wasting money that could be used elsewhere. Consider the use you will get out of something before you buy it.
Is It Important to You?
Finally, consider how important something is to you before you make a purchase. What might seem like a waste to one person is actually a wise purchase to someone else. Examine your personal values, and try to spend money in a way that reflects your priorities.
If you really enjoy the experience of eating out for lunch once a week, spend your money on that, rather than on some less enjoyable activity. Rank your expenditures, and decide what is most important.
Bottom Line
Everyone has different circumstances and different spending priorities. You can’t base what is considered a waste on what is important to someone else. Forget about what the world tells you is crucial to have. If it isn’t important to you, it might be a waste of your money.
And once you have determined your needs, and have those items covered, it’s time to figure out where you might be wasting money. Cut back on the financial waste, and you will have more money to spend on things you really want.
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Will you use it? Definitely the best advice. Even if you want it, or others seem to have it, doesn’t mean you’re getting the value out of it. Great advice!