How to Make the Most of your Money

Making the most of your money is probably one of the best things you can do for your finances. It has nothing to do with avoiding spending, or saving the maximum. What I’m talking about is being savvy about what you choose to buy and when. The following tips are just places to start, and ways to get your own mind to start thinking this way anytime you go shopping.

1. Patience. This applies to all spending categories. Be patient! Wait for what you want, and wait for it to drop in price, go on sale, or for the store to have a “going out of business sale”. Whatever it takes. It’s worth it, and for me, it only makes that purchase more enjoyable and rewarding.
2. Don’t give in to a good sale if you haven’t already got something specific in mind. I can’t tell you how many times I’ve seen someone buy up a handful of “things” simply because they were 50% off. I doubt that person even thought to ask themselves why they needed them. Maybe they figure they’ll need them someday. Who knows. But, I’ll tell you those kind of sales are tailored to the people who will buy ANYTHING if its on sale. It’s just a trick to get you to buy.
3. If you’re gonna buy something, do it right. When you’re shopping for a specific item, do your research. If you can find a decent pair of hiking shoes for $30, but you know that they’re cheap because they won’t last very long, consider opting for the $100 pair. It’s better to buy a more expensive item if you know that it will outlast multiple pairs of a cheaper version.

Here are some specific thoughts to keep in mind when you’re out doing all that shopping (and these ideas can be applied to everything I think):

• Bulk food. Be selective about what you buy in bulk. A 4 lb package of something that has a limited shelf life may have a cheaper unit cost on the front end as compared to the regular store size, but if you or your family can’t plow through it before it expires than its money down the drain. Example: I recently bought three bags of salad greens because if I bought three they were only $1.49 each (as opposed to $2.79). The problem? I failed to realize the date on all three and now I have one bag that I am not going to be able to get to. Better things to buy in bulk include canned and jarred items like spaghetti sauce and soup. Other good bulk items are things like paper towels and sandwich baggies- things you never have to worry about spoiling.
• Tech gadgets. I saw an article last week about how “thousands” were dropping their iPad originals for the iPad 2. It made me cringe. Everyone has something they’re in to, and something they’re willing to spend their money on. But shop and be smart first. Let’s say you want an iPad. What I would have recommended is to take a look at the iPad original to see what features were missing, and then I would have said only buy it if you’re content to live without them. From what I’ve read, many of the things that the iPad 2 has are things that people “knew” would be coming on the next model. A smart, savvy spender would have waited! Think about what you’re buying because if you can’t say that you’ll be content with it for years to come, wait until one comes along that will. I would also recommend the 30-day rule here (e.g.- wait a full 30 days before you buy it. If after that time you still really, really want it, it’s a good purchase for you).
• Cars. Same as tech gadgets. There’s nothing as wasteful as losing 30% of your loan value right when you buy a new car. If you must purchase new, make sure you’re buying something you’ll be happy with long term. Drive until its paid off (assuming you have to finance) and then as many years as you can after that. I would recommend buying “slightly” used. Let someone else take that 30% hit for you. If you take your time, you’ll find a car with plenty of manufacturer warranty left and you’ll save thousands.

Spending money is a necessity of life. Some people really want to live as tight as possible in hopes of retiring early. Others want to balance that out a bit more so they can enjoy some things now. I hope that this will be a little food-for-thought next time you consider making a purchase!

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