How to Spend Wisely when Money is Scarce

In a slow economy people hold onto their money because they fear if they spend, then they’ll be out on the street. Many have been spending less since the 2008 recession, but many gleaned whatever lessons were to be learned and moved on cautiously. Before the downsizing, people were making all kinds of money. People were overspending, and borrowing money to buy things and make additions to their home that they couldn’t afford.

The recession happened because all the stops had been pulled out of the market and people were no longer advised not to buy but to buy more and more. That free for all came about because the deregulation of banks and people were encouraged to borrow; they weren’t thoroughly checked to see if they could make the payments should they be unable to work at the same pace as previously, nor were they advised to be careful. The outcome: Their homes and their savings went to pay their debts.

Less spending

When money is hard to come by, less spending is advised. Know where every dollar goes and make sure you get the best deal for the money spent. Budgets are necessary to know how much can be spent and how much can be saved. At the end of the month when you tally up what went out and what comes in make sure that little something is left over, even if that little something is only $10.

Study the market

Not every wage earner invests his money to earn money, but for those that do they should study the market and know how to invest. Investors that make money in the stock market understand the risk, and the wise ones only put money in when that money can be spared; they do not invest money put away for children’s education, nor do they sacrifice their rent and food allowance. Diversify your portfolio.

Diversify your portfolio

Diversify your portfolio is the well-known advice given to all who invest money in order to make money. And that takes in about everyone because no one hides their money under the mattress anymore. The money you save for your children’s education must be put in long-term investments such as bonds that will mature about the time your children are ready for college. All other savings will be put in short-term investments, and hopefully areas of investment where there’s little risk.

Invest long term

Long-term investments are best although they most likely bring in less my they are more secure. Learning about investing makes good sense. has an excellent learning site labeled for Beginners. They have a long list of topics designed to educate those knowledgeable about how to protect their money.

Relax and enjoy life

Enjoy your life while at the same time not getting your expectations about what you would do if you had lots of money out of control. Money never guaranteed happiness, and in fact it causes lots of misery and worry over what to do with it, and who among one’s friends are out to use because there is money to finance their lifestyles. That’s the wrong use of money.

Therefore, make a list of what you need your money for, and work toward that goal. That will at least be a better guarantee on living your days worry free, and having enough money for food and rent. With adequate planning you’ll have enough money to see you through whether the times are good or bad. Also, you’ll have enough money to donate to worthy causes and help a friend in need occasionally.