4 Reasons it Doesn’t Always Pay to Spend More

In today’s economy, there are lots of way to save money that keep you from spending more money than necessary. Even if you feel like you deserve to splurge a bit and buy something you might not normally buy, there are ways to keep yourself from overspending and stay within your budget.

Reason #1 – The Less You Spend, the More You Save

One of the biggest reasons many Americans are having financial problems is a culture of overspending in recent decades. Saving money by making smart spending choices can allow you to use your money more wisely and buy down existing debt. According to financial expert David Ramsey [http://www.oprah.com/money/Seven-Baby-Steps-to-Get-Out-of-Debt], the more money you dedicate to getting out of debt, the better off you will be financially.

Instead of buying things and putting them on your credit cards, only pay in cash or forego the purchase completely. Take every bit of money you can and put it toward paying off your credit cards and other debts. You can whittle down your debt by laying out all of your financial obligations and paying off the smallest one first. When that one is paid off, move on to the next one. Keep going until you have paid off all or the majority of your debts, with the goal of becoming debt-free.

Reason #2 – Some Day You Will Retire

Even if it seems like retirement is some day far off in the future, it is a good idea to plan for that day to come. According to US News and World Report [http://money.usnews.com/money/personal-finance/articles/2012/07/10/5-ways-people-sabotage-their-own-retirement], it is estimated that approximately 12 percent of women and 7 percent of women over age 65 live in poverty. Largely, this is due to lack of planning and failure to have a retirement plan in place for your golden years. Unfortunately, social security is not a good retirement plan if you want to live in comfort and outside the poverty line and many companies are ending company-sponsored retirement pension plans.

Saving money and putting it toward retirement is one good reason to not spend money today. Instead of spending money immediately available for a new car or on a lavish vacation, stop and think about what you would enjoy doing if you were in your late 60s. Take that money and invest it in a savings plan that will help you meet your financial goals for when you are older.

Consider that most financial advisors estimate that you will need a retirement income that replaces approximately 80 percent of your current income to be comfortable. The older you are when you start saving money for retirement, the more difficult it becomes to save an amount of money adequate for your needs. Instead of spending money now, it is important to save as much money as possible for the future.

Reason #3 – Emergencies Happen

The recent economy has shown many people that it is important to stop spending more money right now and start saving. According to Steven Ayers of the University of Illinois [http://www.news-gazette.com/news/business/economy/2010-01-24/importance-saving-money-hows-and-whys.html], having an emergency fund of money has become a priority for millions of people.

There are lots of ways to save money for an emergency fund. Start with small things, like saving all of your pocket change and depositing it regularly into a savings fund. Another method is to have an automatic deduction set up with your payroll department that is deposited into a savings account. No matter what your approach, it is important to have money set aside for emergency expenses of if you suddenly find yourself without a job and need funds to live on for an extended period of time.

Reason #4 – Expensive Does not Equate Quality

Spending more on many items is generally unnecessary. The reason that dollar stores have become so popular in recent years is because many people have discovered that they do not need to spend money on name brands to get the same quality products. It is entirely possible to bargain shop and save money without spending a great deal. Smart phone apps can help you save money by comparing prices in the moment while you are at the store and coupons from the Sunday paper can save you lots of money on name brands you routinely purchase.

The economy does not appear to be improving substantially any time in the immediate future. It does not always make sense financially to spend more money and get yourself deeper into debt. Instead, concentrate on saving money, buying down your current debt and planning for your future needs.

Denise Wallace is a bargain hunter and guest author at WebsiteHostReview.com, a site dedicated to helping you find the most affordable web hosting.

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