In the quest to save money, many people go to great lengths to find solutions that will work for them. Often, it can take months or even years of hard work to come up with a plan that will actually work and help you inch towards building a savings, and it’s not uncommon to stumble upon a number of obstacles throughout the process. Perhaps one of the biggest mistakes people make when attempting to save money, however, is believing that the answer is to spend less.
It stands to reason why one might believe that limiting their spending will help them to save money, and in some ways, they’d be right. The problem, though, is that many people take the route of buying cheaper versions of things they may need in order to satisfy their desires to spend less. One may need a new bedroom set, for example, in which case they might potentially go for the cheapest available option as a method for saving money on the purchase. When it comes down to it, however, this is one of the worst decisions a person can make regarding their finances.
When you start looking closer at the mileage you’re getting out of your money, it often becomes clear that spending more may actually be preferable to spending less as a method for saving. Understanding why is the first step towards gaining more control over your financial health, and it’s not nearly as confusing as you may think.
Pay more for quality
Most people don’t want to admit it, but the vast majority of “budget” purchases tend to be made in vain. It can be tempting to spend half as much as you might on a premium item, but it’s important to remember exactly what this means in the long run. Paying less almost always means you’ll be ending up with an item that is of less quality, and quality often translates to lifespan. If you decide to buy a $200 bed, for example, you could find yourself needing a new one in short order, where a $1,200 bed could potentially last for decades if properly cared for. Paying extra upfront, then, would be the preferred route to take in this scenario.
Spend more on charitable causes
For those who find themselves drawn towards a particular charitable cause, there’s nothing more satisfying than making a donation. Charitable donations come along with a number of perks, and the more money you’re able to donate, the better. For one, you’ll benefit from the good feeling that comes along with making donations, but that’s far from being the only perk. Many charitable donations are actually tax-deductible, which means you can end up saving money in the end by making them. Be sure to look into all of the details that come along with making charitable deductions before you jump in, however, as you don’t want to make a quick decision that you might end up regretting.
Look towards investing
When it comes to finding ways in which to spend money, there’s no shortage of different routes that can be taken. One of the best ways to capitalize on the money that you already have and work towards saving more in the end is to consider making investments. Investing in something worth your while can pay off exponentially over time, and the more money you put towards a wise investment, the more you stand to gain. Many find that buying stocks is an excellent way to enter into the world of investing, and this is just the tip of the iceberg in terms of what’s possible.
For best results, you may want to consider working with a professional to determine which forms of investing will benefit you the most.
Find a high-interest savings account
As one might expect, the best possible way to save is to open up a savings account. What many people don’t realize, however, is that no two savings accounts are created equal; there is always some form of variation that needs to be taken into consideration. Some savings accounts, for example, come along with exceptionally high interest rates, which help you to make a fair amount of money on the money that you put in. Online savings accounts, for example, often feature very attractive interest rates, which makes it more than worth one’s while to deposit as much as possible.
The more you spend building your savings account, then, the more you actually stand to save over time.
Embrace a buy-sell mentality
Just as one might expect from playing the stock market, there’s a chance to make quite a bit of money simply by buying or selling something. A lot of people don’t realize that this doesn’t necessarily have to be done in the form of purchasing stocks, coins or certificates, however; you can apply a buy-sell mentality to a great deal of what you might encounter in daily life. While you most likely won’t be able to quit your day job, there’s no reason why you can’t constantly keep your eyes open for great deals that you might stumble upon, whether it be on vehicles, technology or otherwise.
Making a purchase for a price that seems too good to be true means you can turn around and “flip” the item for more money, which is a great example of how you sometimes have to spend more if you’re looking to save. Some have built entire businesses around this philosophy, although it typically stands as being a good way to make a little extra money on the side.
Saving money will always be top-of-mind for most people, especially considering how much of a challenge it can often be. Cutting back on your spending, however, may not be the solution you’re looking for, as spending more is often the best way to work towards savings. So long as you’re careful with the purchases you make, you can stand to gain quite a bit from spending just a little bit more than usual.
Erik is a staff writer for MyBankTracker.com, who specializes in real estate, consumer banking and personal finance.