9 Ways to Spend Wisely
June 26, 2018
Did you receive a tax refund this year? Did you make some financial goals way back in January? Do you want to reach a new level of financial security? If you answered yes to any of these questions, then this article is for you. Check out these monetary goals to make sure you are on the right track, monetarily speaking.
First, a full emergency fund. “Spending” your money on savings is always good strategy. Plus, it will help you relieve your worries about not having a financial cushion should you find yourself in a tight spot due to unexpected expenses.
Second, while you might not think having unpaid debt as “spending” per se it really is because you are paying interest for the price of borrowed money. Using “extra” funds will help you put more money in your pocket over the long term.
Third, rev up your retirement. You’ve heard of it so many times that it’s easy to tune this one out. However, here it is again. Topping up your retirement accounts (or starting one if you haven’t already) is one of the wisest ways to spend any disposable income.
Forth, create additional income streams. If you have a business in mind or want to purchase a rental property to create an additional income opportunity, spending your money here is a wise move. This is especially true if you use the additional income to fund one or two of the first three goals above.
Fifth, ensure your insurance is adequate. While you certainly don’t want to have too much insurance, making sure you have enough coverage, particularly when it comes to life insurance, is important. If you need to add additional coverage, make sure you check your rates at the same time to see if you could be getting a better deal.
Sixth, run a spending deficit. While you are thinking about finances, even with extra cash in hand, it’s a good idea to identify areas where you could spend less. This will help you get into the habit of allocating income for savings, investments and paying off debt.
Seventh, dampen your desire for more “stuff”. An often-overlooked way to spend wisely is not to spend at all. If you find that you buy a lot of things that end up collecting dust, it’s time to put an end to this kind of spending. Instead put the money you would have spent in your bank account.
Eighth, plan to share your wealth. If you have a desire to support a cause or charity, having extra money from a tax refund or your own savings can help. You may want to talk to a tax or financial professional to learn about the regulations around charitable giving, especially if you are looking at contributing a considerable sum.
Ninth and final tip, create a will and put your financial house in order. An important part of money management is making sure that your family and any debts or financial obligations will be taken care of upon your passing. This is a goal that should be on everyone’s financial list. It’s also another area where talking to a financial professional can help you navigate the tax laws related to estate taxes and other considerations.
Spending wisely and reaching your financial goas is all about making these habits a priority. Consider the goals and strategies laid out here and put at least a few of them on your financial to-do list. Spending wisely will benefit you now and into the future.