Smart Spending

Focusing on Needs

A key to managing your money and your expenses is to make sure that you understand the difference between needs and wants. Yes, everyone knows the difference but do you really live by it?

A need is something that you cannot or should not function without. Needs are going to include things like a place to live, food, water, heat, electricity and some others.

A want is something that you can do without. Some wants include things like cable, Internet, cell phones, gym memberships, getting your nails done or maybe even a car.

When evaluating needs and wants, don’t forget that some “needs” may actually be wants – You may need to buy cereal… and you think that you need to buy name-brand, but that’s a want. Buying top-of-the-line or name-brand items are wants. Buying new instead of used is a want.

If you’re serious about saving, you will need to make the tough call as to whether or not your basic need can be met with something that costs less. You can save yourself a ton of money if you focus on the needs and cut out some of the wants.

Finding the Best Price

So you’ve determined what the things are that you need and what you want. Now its time to go buy them… but before you make a purchase, you’ll want to make sure you are getting the best price.

Shopping around, using coupons and bargain shopping are some of the most important tactics when saving money. You can find great deals online, in your local paper or even at the store just by doing some research.

Some stores will price match the competition and most offer weekly specials. Most stores that offer weekly specials have coupons online too – check their web site before you go make the purchase.

Most importantly, if you feel you could get a better deal somewhere else or that something is too expensive… don’t buy it!

Avoiding Impulse Purchases

Impulse purchases… the ultimate threat to keeping a good budget!

Impulse purchases are those items that are not listed on your budget but you feel you absolutely “need to have” when you’re out shopping.

Typical culprits are items that are on sale, by the cash register or under $50. All of these are sales tactics to get you to purchase items that you don't actually need.

If you know you have a problem with impulse purchases, do some detective work. Do you always make impulse purchases when you're shopping with friends, when you go out on pay-day or when you visit a certain store? If so, avoid those situations. Sit yourself down and have a stern talk – just tell yourself "no!" (and mean it).

Infrequent, small impulse purchases are okay but don't make them a habit. Stick to your budget — it’s there for a reason!