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Spending Your Money Wisely

With a professional background as a civil engineer and writing as my hobby, I hope to help others with their own projects.


Spending Your Money Wisely -Differentiate Between Needs and Wants

Once you have money in your pocket, you do not think much before spending it. This can lead to financial problems later if you have not been careful about what you are buying. You need to be sure that what you are buying is what you need, and not just what you want.

What is the Difference Between Needs and Wants

Needs are those things that you need to survive while buying what you want can probably make your life more enjoyable. You will spend your money wisely if you use your money to give priority to what you need, and buy things that you want, only when you are in a financial situation that leaves you with a surplus.

Every person has some basic needs that can include food, a home, clothing, and probably some means of transport. Even here, there can be a lot of differences in the quality, variety, and of each item, which can be related to the lifestyle that a person is accustomed to. Spending even on such essentials needs to be done wisely.

Wants are those things that a person feels good owning or consuming and enhance the quality of life. Eating ice cream, going on a holiday or vacation, buying new clothes or a changing your car is not really essential, unless there is an emergency that converts the want into a need.

How to Assess Your Needs and Wants

Spend money only after you make a thorough assessment of the item you want to buy, especially if it is a thing that needs you spend a lot of money. This can be difficult, because the media today is filled with advertising and marketing that is designed to create a need in people. Also, the easy availability of money through the use of credit cards, loans and other means often leads people to take wrong decisions, without thinking of the consequences.

Take time to assess your needs and wants. Be aware of your lifestyle and the society in which you live and have to spend most of your time in. Needs can vary as your lifestyle changes. Spend the money for what you consider essential, and plan for what it is that you think you need to have. Makel the best of the limited resources that you have. Set priorities.

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Carefully make out an income and expenditure statement for the past few months. It can be of great help if you list your expenses every time you make them, it is very easy to do so, nowadays, with the many apps that you can even use on your smart phone. Income, if a you are a salaried person. Is not difficult to track of, but if you have various streams oof income, you may need to record them also, as the money comes in. Many people think of some fixed saving every month as an expense.

Compare income and expenditure. Income should always be higher. Review all your expenses to make sure that you have not spent on any unnecessary things. This will allow you to spend your money wisely, and not cause any financial problems in the future.

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