Spend Wisely to Save Money

“Its is not what you earn, but what you keep that matters.” Is this true?

Yes, it is. This is a collection of money wisdoms that will help you keep your more of your money;

1. Always buy the best that you can afford when buying a multiple use product. You will otherwise wind up buying the cheap item again and again and again, spending a lot more in the long run. Example; Cloths, if you have two sons and will they both wear the same pants, spring for the ones from the catalog from Maine or that Minnesota brand or other tough wearing brand name. They will cost a bit more now, but they will be worn by both of the boys and they will still have some wear left in them when the second son has outgrown them. You get to pass them on to another family or puit them in a co-signment shop to have them pay you back again. They will be out grown not worn out.

2. If something is only going to be used once or for a short time, go ahead n buy the cheap one. It will not need to be used beyond that one or two times so it does not need to last. Example; A foil turkey roasting pan that you plan to take to a potluck supper does not need to be the high price brand name one. Chances are good that you will leave there, a basic generic foil pan will do nicely. Once the label is pealed off, only your wallet will know the difference and your fine cooking will still taste great.

3. Always think twice before spending money, is it a need or a want? If it is truly a need, go ahead and spend it. Think; “Is it is a want?” Weigh the cost carefully, is that box of gourmet cookies really worth $8. 50? Or would you enjoy a bag of sweet grapes just much and spend just $3.00 plus be healthier for it? The small purchases count just as much as the big ones so always think before you choose to buy.

4. If a major cost item is due to be replaced, figure out what you paid for the original item? How long did you have it and use it? What will the replacement cost be? Would it be wiser to repair it or would that just be, “throwing good money after bad.” For example; If a car’s breaks need replacement and the car has other major problems, are the breaks really worth the cost of the repair? Perhaps riding the bus or carpooling for a month or so would be wiser. In the mean time you can save a few dollars and find a good reliable replacement ride.

5. It really is about what you keep! And what you throw away. If you have a unique item, one that has notoriety, be it negative or positive notoriety or if it was recalled immediately after it was put on the market for reasons other than safety, keep it, it’s value will go up. If there were a few million of something issued it will gather no value with time. If an item is sold nation wide, it will probably never be a valuable antique, there are just too many of them out there. Money and increasing value will follow the rarity not the commonly occurring item.

7. Learn the value of compound interest and use it wisely. Pay less interest out and acquire more interest into your account. For example, only use a credit card if you can pay it off that month. If you let a charge sit on your bill, the interest will destroy any raise you get at your job and the cost of the purchase will probably outlive the life of the original item. Your three year old will not remember her Disney vacation when she is nineteen. She will know that she can not afford college because her parents have high credit card bills that began with their unwise money choices and that early vacation.

If you are still young, put just a little money (as little as $10- a week or even $20- a month) regularly into a compound, high interest account or a 401K. Let it sit, let it grow and get ripe, keep track of the interest bearing and move it if you find an insured account that pays higher interest. It will ripen very nicely as you age and when you are ready to retire you will smile happily at the wisdom of your youth.

8. Know when to invest, if the market is way down and everyone is running the other way; it is time to put your cash down. Find a few secure stable stocks, do the research and buy a few shares of each when they are cheap. Let the stock dividends go back into the pot to buy more shares (this is known as a DRIP or dividend reinvestment plan). In ten, twenty or thirty years you will look back with satisfaction on the day you made that original stock purchase as you cash it in to pay for your first home, your child’s college tuition or to fund your retirement.

9. Frugality is a virtue. The expression, “Waste not want not.” is valid. Do not waste your hard earned funds, small or large, that impulse purchase will not be worth anything tomorrow. Keep your eyes and ears open, learn what ever you can about financial issues. If you choose to invest, do so with a highly qualified, certified and trusted investment planner. The best financial planner is one who does not sell any specific products, just his or her services. Make sure they have that, “CFP,” after their name, it means that they are a trained and Certified Financial Planner.