“Economy does not lie in sparing money, but in spending it wisely” Thomas Huxley
What techniques can we apply to our spending habits to ensure that we are getting maximum value for money when we do spend? I am all about finding creative ways to live a full and quality life and I am not really into extreme penny pinching as a way to build wealth. I believe we need to find a good balance when it comes to spending so as to derive maximum value and grow wealth at the same time.
Men generally seem to have no issue with this but for some people, like myself there are defiantly some complex psychological factors that drive how we spend money more than just pure need. This may be a need to portray a certain image of oneself to the world or just brainwashing from advertisements. For this reason, some things that I have bought in the past have ended up being a pointless waste of money, for examples clothes that were not right for my body type or situation, kitchen equipment that I never needed or used, pointless services like massage that did nothing for me.
Below are my tips on how to spend wisely and avoid wasteful spending:
- Beware of SALES: One of the worst things about sales is the pressure to buy NOW instead of at your own convenient time – this pressure to buy now can lead to poor decision making. You might be fooled into thinking that you are getting something that you want at a cheaper price when really you may be buying something that you will never ever want. The saying “cheap is expensive” comes to mind
- Know yourself and your needs: I will take the example of buying clothing, whether your fat, thin, short or tall, there are clothes out there that will suit you even though they might be harder to find. The mistakes that I have made in my life were looking and getting my dressing ideas from fashion magazines – these magazines typically depict styles for the thin and tall body type, so I would buy these clothes that were not designed for me at all and I would be unable to wear them. You have to be very self focused almost narcissistic – its not about you adjusting to fit the clothes that are being sold but rather the cloths must be the ones to adjust to suit you otherwise don’t buy them. Personal presentation is very important, “dress the way you want to be addressed” comes to mind. You do not need to spend a fortune to look good, which is what the big brands want us to think, as they want more and more of our money.
- Don’t be greedy: Greed is defined as the desire to have more of something, usually more than one needs, so in this instance I am referring to the urge to acquire more material processions than you really need. I think the desire to become wealthy or financially independent should be driven by positive desires such as financial security for yourself, family and community, the desire to share your talents and discoveries but not a desire to get more things so that you can show off and prove to people that you are better than them. Spending till your broke is highly inconsiderate because when you don’t have money to pay your rent or medical bills, it will be your hardworking family and friends that will have to bail you out.
- Know when to spend on quality: Don’t just buy things because they are cheap, know when to invest in quality. The other thing to bear in mind is that the price of something is not always related to the quality. Sometimes cheap things can be better quality, the main point is to put more consideration into what you are buying, ask questions and research before making your decision. An example I can give, is that a few years ago we decided to buy a generator – we looked at the generators that were being sold locally and found them to be rather expensive so we decided to “save” money and send somebody to buy it for us in China. Yes the generator was cheaper but when it arrived we found it to be so noisy and kept getting spoilt so we hardly ever used it. The better decision would have been to spend more and buy a quality generator locally, one that we could inspect first with our own eyes before buying and one where we could get service should it need repairs.
- Practice minimalism: Minimalism means leading a more simple life with less things and its closely related to my point on avoiding greed. The benefits of minimalism are not just financial but it also promotes better mental well being and allows you to get more done as your not constantly distracted by things. I love that feeling I get when I throw or give away something that I no longer need, or when I look at a space devoid of clutter and things. You should look to keep only the things that you use or that are beautiful to look at and don’t just keep things for in-case one day you need them.
- Buy for need: Don’t just enter a shop because it looks like it has nice things and then buy something nice, that you might use someday. Avoid this type of purchases, instead buy things because you identified the need first like say for example all your knives are blunt and you need something to sharpen them, that way you will only buy things that will be useful and add value to your life.
If we apply all these techniques and generally just get more aware of the reasons why we buy, we will find ourselves spending money only on things and experiences that we will value and enjoy. The whole point is not just about acquiring money but also enjoying life to the fullest.