There are so many awesome things one can do with money! Save it, invest, inherit, donate – you name it. Obviously, you can also send money online. But as you know, there is always the other side to each coin, and money can also be lost or stolen. However, much more often it is simply spent – and in many cases, unnecessarily. Luckily, it is in your power to stop wasting money. Let’s have a look at some money tips that can help you improve your spending habits.
Optimise your space
Your home is perhaps the largest and most important asset in your life. It is also the most expensive one, whether you own or rent. The larger and fancier your place is, the higher your chances are to spend money frivolously. But do you really need that extra bedroom for your relatives to stay in? No, you can easily book them a hotel for that yearly visit. Is a prime location that necessary? Come to think of it, you can still find a less central, meaning less expensive option and enjoy life. And what about all that space that you need for your books? Just get an e-reader! A smaller place allows you to stop overspending on utility bills, maintenance, cleaning, and so on. Otherwise, think of having a roommate to share your expenses with.
Know your way around
Depending on where you live, transportation costs in your budget vary from tolerable to exorbitant. For a car, besides the actual purchase/lease price, you will be paying for insurance, regular service, petrol, washing, etc. Parking in a city turns into an extravagance once you learn how much they charge for an hour (and how much petrol you burn while trying to find a free space). And then, of course, there are traffic fines, which are a financial nuisance, particularly for those new behind the wheel. So, if you only need a car for family weekend trips to the countryside, consider how to stop spending money unnecessarily with renting or carsharing services. If you are in a big city, research your transportation options. There is probably a dedicated app that has the information about the routes, schedules and, importantly, disruptions which would save you much time and taxi money. Many European cities are also developing comprehensive transportation systems that allow you to efficiently combine car rides, city trains, scooters, buses, and other types of transport for faster, cheaper, and more convenient trips. If you have to move around a lot, make sure you check for monthly/season tickets, such as the recently introduced Deutschlandticket in Germany that enables you to use all public transport around the country for only €49 a month.
Shop responsibly
While housing and transportation expenses are harder to cut down on, the situation is different when it comes to shopping. Spending too much money on stuff we don’t really need is something almost all of us do, for various reasons. Some are easily swayed by marketing pressure (you don’t really need to replace your perfectly working espresso machine with the latest hyped model). Others hoard just because it’s on sale (no, there won’t be an occasion for you to wear that glitzy dress, ever). Yet others stock up on things, and especially food, “just in case” (of another pandemic, perhaps).
This is not to say that it must be prohibited altogether to spend money frivolously, of course not! Everyone deserves an extra treat, whatever that may be, from time to time. But work to make your shopping reasonable, for example:
· Make shopping lists – after an inventory of your stock and before you head out to the store
· Set a limit to how much you can spend and make it specific (e.g. on clothes this month) and track your spending to stay within the limits
· Look out for 1+1 and similar offers, but only for the items on your shopping list
· For more or less major purchases, take a couple of days to think it through
· Avoid very cheap options because most probably you will be paying for a replacement fairly soon
· Pay in cash whenever you can to have a more solid grasp of how much you actually spend
· And never, ever go grocery shopping on an empty stomach if you want to stop overspending on food!
Dream big
Yes! There is surely something you would love to have or do but never have enough money for it. Whenever you are about to buy something, ask yourself: do you really want/need this more than [insert the dream here]? Such an approach not only protects you from impulsive buying but also helps you stop spending money and makes your dream a step closer.
Don’t live on credit
Simply put, just don’t buy things you can’t afford. At some point, you might, of course, want to take out a mortgage and settle down. But when it comes to anything less vital, such as vehicles, home appliances, electronics, clothes, etc., find ways to stay within your available means. Living on credit is expensive, and avoiding it is a good way to stop wasting money. Credit cards are nice only until you have to pay for your overdraft.
Plan your budget
This might sound annoyingly obvious, but while looking for ways of how to reduce spending, the importance of proper budget planning is hard to overestimate. If you’re struggling to organise your spending habits on your own, there are plenty of budget-planning apps for you to choose from. If even that is a challenge, try applying a very simple 50/30/20 rule. It suggests that out of 100% of your income, you spend 50% on needs, 30% on wants, and 20% on savings. The amounts can, of course, vary depending on the circumstances, but you get the idea.
Stop wasting time
You may think it banal, but the age-old “Time is money” adage is there for a reason. The first step would obviously be to reduce the amount of time you spend on mindless activities like scrolling, binge-watching, channel-flipping, and such. You’ll be surprised how much time you have now to finally learn that new skill which might lead to a salary increase! Evaluating the so-called alternative costs is also a smart indirect direct way to stop wasting money: sometimes it is financially justified to ‘waste’ €50 on cleaning services for your apartment but free up the time for the job that pays twice as much.
Be digitally smart
When looking for ways of how to stop overspending, think of the routines you could turn digital. As already mentioned, books are one of those. An e-reader makes up for a whole library and saves you money as e-books are cheaper than hardbacks. The same goes for music: you might be an aspiring vinyl collector, but a premium streaming service subscription might be an acceptable alternative for now. If you are considering getting a degree or learning a new language, there are plenty of great online resources to choose from, both free and paid (a course on how to stop spending money might be a good start!)
The other side of being digitally smart is knowing how to avoid excessive spending. We have already discussed shopping, but what about all those ghost services you subscribed to 10 years ago? €5 a month might not seem like a big deal, but it all adds up. So, one of the good spending habits to acquire would be reviewing your recurring payments occasionally and optimising those according to your changing needs.
Be fintech smart
An extension of the above and, possibly, the best money tip of all: take advantage of new technologies, especially fintech. Prioritising online services over traditional banks is an effective way to prevent excessive spending and save money and time. A great example is Profee, an online money transfer service that allows you to send funds from Europe to 50+ destinations around the world. It takes you a couple of minutes to sign up and arrange your first transfer. With only a phone number, you can send up to €1,000, and there are simple verification procedures in place to increase your transfer limits. Profee offers the best currency exchange rates on the market thanks to its in-house monitoring system and does not charge any hidden fees: you always know the precise amount your recipient gets. Moreover, there is no commission on transfers from Europe to countries such as Armenia, Azerbaijan, Georgia (in lari), Kazakhstan and Moldova. The service is available both as a website and an app and you can switch between the two seamlessly. Visit www.profee.com or get the app from the App Store or Google Play to learn more and stop wasting money.
