Once you are in a saving mindset, it can be difficult to part with even one dollar without scrutinizing the value and impact of spending. While carefully considering where your money goes can undoubtedly help you save, there is more to improving your personal finances than penny-pinching.
It can be challenging to strike the right balance, especially when you have hit the initial milestones in your savings plan. Seeing your hard work reflected in your savings account balance is a great feeling. Once you’ve established this strong foundation, it is time to be brave! Making further progress in your savings plan should now come from spending money as well as saving.
Since it’s often hard to know where to start, we decided to put together some information that will help you make decisions, and you give you a little nudge in the right direction. After all, money in the bank is not the end game, but rather a means to an end. Whether you’re saving for your future, a big purchase, or the next generation, here are our tips on how spending helps you save.
Although we seem to be stating the obvious, many people still shy away from researching and purchasing the right insurance. Even if you have to expand your budget a little, buying the appropriate coverage can save you money in the long run.
The first question to ask yourself is what you need to insure. This largely depends on your lifestyle, but the basics will most likely include car insurance, home insurance, and life insurance. An important factor to consider is what you are dependent on for your livelihood; would you be lost without your car, electronic devices, or perhaps you need liability insurance for a home business side project.
Now you’ve identified the areas for insurance; you should have an idea of what it would cost you to cover those elements, such as car, house, etc.without insurance; remember to factor in the time and inconvenience too. This amount can serve as a guide when looking at policies to ensure you get value for money. One of the best ways to understand your options for different types of insurance and get a good deal is to use a BrokerLink insurance site to get more information.
Parting with your hard-earned cash can feel the most counterintuitive when it comes to investment. You are spending money on what feels like a risk, with no guarantee of return. Although we are looking to speed up and boost your savings plan, that doesn’t mean it is time to seek a big return over a short space of time.
Investing to boost your savings can be done carefully with less risky investments that slowly grow over time. If you haven’t already done so, look into high-interest savings accounts or certificates of deposit. You might find an account that requires a minimum monthly payment to top up your balance, but that delivers significantly better rates. Since you are saving anyway, why not put the money out of reach but where it can gather interest.
If the idea of deciding where to invest your money is a bit daunting, you can save yourself the research and stress by getting someone to invest it for you. When you go beyond savings accounts and national investment schemes, the next safe step could be a money market mutual fund or a fixed annuity. The money experts or insurance companies use your money and pay you the return; the only thing you need to look into is which fund or company you choose.
Spending money on yourself has probably become a rare occurrence now that you are saving. We aren’t talking about splurging on a couple of drinks or new shoes. There are times when you can make calculated purchases that will reap the rewards.
View spending money on yourself as another form of saving. You are saving money for a better quality of life, and any money you spend on yourself should bring about the same result. It comes down to discipline and thinking long term, but it is one of the best things you can do for a little time, money, and effort.
There is a range of things, big and small, that you can do to invest in yourself. The best way to get started is to pick one or two key areas. You might want to advance your education, learn a new skill, or improve your health. All of these things can help you in your career and save you money in the long run.
The Bottom Line
There are ways to spend money to make money. Don’t let that completely destroy your mindset and your progress to date, but do consider your options.