After you’ve budgeted for your home, utilities and expenses, you’ll often find that the money left for spending on other purchases is lower than you’d like. However, there are simple ways that you can make this money stretch further. Here are just three:
#1 Don’t be Seduced by Sales
We’ve all done it. We see the ‘sale’ tags and the ‘50% off’ stickers and think that we’re getting a great deal. Although these shops can be incredibly tempting places, you need to ask yourself two questions:
- Do I really need this item?
- Is this deal really that impressive?
Behavioral economists believe that we’re conditioned to react differently when we see a red sign saying ‘flash sale’ or similar because we believe that the item is in short supply. However, you’ll often find that these items will be reduced further at a later date. So, ask yourself those two important questions to remove any irrationality and emotion from the situation. After all, a half-price dress is only a good deal if you’ll actually wear it.
#2 Shop Around for the Best Deal
The better the deal you get, the more spending money you effectively have, as each saving keeps money in your pocket. If you’re shopping online, this couldn’t be easier; with price comparison sites and competitors only a couple of clicks away. Once you’ve found the best deal, make sure you check voucher sites before you buy. Chances are, you may be able to get the item for less simply by spending two minutes doing some research.
Likewise, if someone is offering a deal, make sure it’s the best available. If we look at gambling, for example, not only do odds differ when we compare one bookie to another, but things like welcome offers do, too. So, compare these to ensure you’re making the most of offers. Much like you wouldn’t pay over the odds for something, you should always make sure you’re getting the best odds available.
#3 Use Cash Not Contactless
Behavioral economists have also linked spending to another key point of the human psyche, one known as ‘the pain of paying’. Research has revealed that if you physically pay cash for something, you’re more likely to realize that you’re actually spending money. As a result, by using useful apps like Apple Pay or contactless payments, you’re more likely to spend more money because plastic purchases are less tangible than cash purchases.
For this reason, if you have a dedicated amount of spending money for a day or week, you should carry it in cash rather than having it on a card.
Follow the behavioral economists and our top tips and you’ll have no problem budgeting your spending money correctly. Remember that small savings make a big difference. If you can save $10 a week this way, that equates to $520 a year, which can pay for all your Christmas presents and a New Year’s Eve night out as the year comes to a close.