Whether you earn cash from a weekly allowance or neighborhood jobs or you’ve been saving up all your birthday and holiday loot, you want to make the most of your money when it’s time to spend it. Smart spending means budgeting for what you need or really want, shopping around for the best value, and avoiding impulse buys you might regret later.
What Do You Need and What Do You Want?
When you’re getting ready to spend money, consider whether your intended purchase is a need or a want. This isn’t easy to figure out. While new video games or concert tickets are wants, certain other purchases can fall somewhere in between.
For example, you need food and clothing. You need a shirt, but you want your band’s favorite concert shirt. Or you may need a bike to get to school or practice, but you want the same bike your best friend has, with all the newest features.
When you’re young, your parents often take care of many of your needs, like your house or apartment, food, clothing, and much more. But you can learn a lot by talking to them about their own spending decisions. How do they prioritize their spending based on the needs of your family? You’ll find that they focus most of their spending on needs like:
- Paying a mortgage or rent
- Covering monthly utility bills, like electricity, water, etc.
- Getting gas and oil changes for the family cars
- Paying for doctors’ visits and medicine if someone gets sick
- Paying for repairs if something breaks in your home
Adopt Some Smart Spending Strategies
There are some things you can do to make sure you’re making good decisions with your money. Here are some simple strategies to consider before giving away that birthday and allowance cash:
- Think before you buy. Is your purchase worth it? Will a bike or those guitar lessons make you happier than an overpriced new video game?
- Set spending limits. Decide how much you want to spend on certain things – like snacks, activities with friends, or new clothes – and then try to stick to those limits.
- Consider the item’s or activity’s value. Should you buy a cheap scooter or bike that you can afford now, but that’s more likely to break easily, or save up for a while to get one of a higher quality?
- Shop around and look for deals. Technology makes it easy to compare prices and find discount codes, coupons, and deals.
- Wait before you buy. If you’re thinking of buying something big, give yourself an extra day or two to consider whether the item or activity is worth your money.
Avoid Impulse Buys Whenever Possible
Do you know why stores put so many fun things by the checkout line? Because they want adults and kids alike to make impulse purchases – the things you buy without planning for them. These can add up quickly if you’re not careful and can throw off anyone’s budget.
You’re more likely to spend money impulsively if you’re feeling stressed or sad or if your friends are encouraging the purchase.
Buying something on a whim that you don’t need (and probably don’t even really want) can leave you discouraged. These impulse buys can set you back in your quest to afford the things that matter to you. Here are some tips for avoiding the impulse trap:
- Create a shopping or activity list and stick to it.
- Only bring the cash you need for what you set out to buy or do, plus a little extra for emergencies.
- Don’t head to the store or shop online if you’re feeling bored, stressed, or very emotional.
- Find ways to have fun that don’t always involve spending money.
You Can Be a Smart Spender!
Smart spending is about understanding the difference between your needs and wants, taking time to budget, and considering each purchase’s value. Getting started with good spending habits now will set you up for a lifetime of financial stability.
Smart spending is just one piece of your financial health. There’s always more to learn about earning money, saving, setting up a savings account, and more. We’re happy to help you become a pro at managing money, and we encourage you and your parents to reach out.
