Overspending is not always bad. Splurging on some things can prove to be beneficial in the long run. Don’t believe us? Read on to know more.
We’ve always been told that overspending is bad. No matter what the situation is, splurging is always considered to be a bad thing. Well, if you keep spending unnecessarily on things you won’t use in the future, then maybe it’s not a great idea after all. But if you know what you’re doing and overspending looks like a good option, you mustn’t hold yourself back.
Additional Reading: 4 Possible Leaks In Your Budget
We know, it can be confusing. Should you splurge and buy the latest iPhone or save for a rainy day? Quite a dilemma, isn’t it? By saying ‘overspending is not always bad’, we don’t want to encourage you to spend left, right and center. Since there are high chances that you’ll give in to temptation and overspend on the wrong things, we’ll first tell you how you can resist these urge to spend unwisely.
Also, in order to be able to overspend on certain things, you need to be financially secure first. That’s where the magic of savings can help. So, let’s focus on building your savings first, shall we? Here’s how:
Set your priorities straight
Instead of randomly buying anything and everything, you must have a clear set of priorities in your head. It’ll help you as you’ll have a better idea of where to spend and what can wait for a while. For instance, if your bike is giving you trouble frequently and is really old, maybe you should focus on buying a new one instead of upgrading to the latest TV.
It’s all about setting your priorities in place. Not that difficult after all, isn’t it? The better you become at the art of prioritising, the more you’ll end up saving.
Set some goals—for yourself and your bank account
Like everything else in life, you need to have set goals for your financial future as well. Be a little systematic and plan things in advance. Make a list of your short and long-term money goals. Classifying them can help a great deal when it comes to making efforts towards turning them into reality. Identify your needs and see what you immediate requirements are. It’ll help you plan better.
Additional Reading: Financial Goals To Hit Before The Big Three-Oh!
Know when to spend and when to resist
No matter how tempting things look or how long you’ve wanted them for, you must know when to buy and when not to. Giving in and buying random (and expensive) things can hurt your monthly budget and affect your financial security as well.
Stick to your budget
Budgeting can save the day (and the month) for you. At the start of every month, you must prepare a budget and try sticking to it. How to plan it? It’s easy. You already have a list of priorities set, right? Just plan accordingly. If you have a big expense coming up, try focusing on that instead of trying to buy everything, all at once. Slow and steady wins the race.
If you follow these guidelines, getting your savings in place will be a cakewalk for you. Now that we’re done taking care of your savings and financial security, let’s move on to the next part. The part where we tell you where it’s actually a good idea to overspend. All set? Here we go:
Buying in bulk
While buying things in bulk, we often feel like we’re overspending. And instead of buying bundle packs and things at wholesale rates, we prefer going for smaller numbers and quantities. If you think that buying in bulk makes you spend more, you’re wrong! The key to being frugal actually lies in thinking big and buying in bigger numbers.
By asking you to buy in bulk, we don’t mean that you must buy anything and everything in huge volumes. We’re talking about things you use often and buy regularly, like groceries, cosmetics, etc. Instead of buying 500g of atta now and waiting for it to get over before buying more, you’ll find that it’s more economical to buy 5kgs. On top of this, it will save you the headache of having to buy the essentials every week and ordering in if you’re too tired to. Eating out or getting food home delivered costs a lot more than cooking at home. See! One right move can help you save money in multiple ways. How cool is that!
If you want to know the basic reason behind why buying larger quantities is cheaper than smaller packets, here goes. Have you heard the term called ‘packaging costs’? They form a good chunk of the total price of the product. If you keep buying the same product in smaller packets, you’re basically paying the packaging price over and over again.
On the other hand, if you buy the same thing in a bigger packet size, you pay the packaging price only once. That’s the magic of buying in bulk. Oh, wait! Before you rush to that nearest grocery store to stock up on all the essentials in bulk, you need to know this.
What if we told you that the savings that come with buying in bulk are just one part of the story? This can work in your favour only if you use the things you buy in time. If the items that you buy in bulk aren’t used by their expiry dates, they become useless. So, basically, you just end up spending unnecessarily for things you don’t even use. Therefore, you need to be careful about things you buy in bulk and use them in time.
Putting your health first
Staying fit is a crucial part of your life. Not merely because it helps you stay healthy, it also helps you save. How? The more you take care of your health, the slimmer are your chances of falling sick. As a result, your medical expenses drop considerably. If you’re still in a dilemma about getting that gym membership, maybe you should think again. No doubt, it might cost you a bit now, but it’ll also help you stay in shape. Your chances of falling sick drop. Not just that.
Staying fit helps stay clear of diseases like diabetes, cholesterol issues, etc. It could also save you from unnecessary medical expenses later in life. Being physically active isn’t enough to ensure good health. You also need to eat well and ensure that you consume high-quality food. These might not always be economical. You might have to choose quinoa over white rice, and that’s not a cheap substitute. You’ll also have to consume a lot of fresh fruits and veggies. The point is that you shouldn’t you’re your health lightly even if it means spending a little more. Don’t shy away from doing that.
What you can do it cut down on other expenses (like your junk food or parties) to compensate for the increased expenditure here. But don’t compromise on your health.
Planning your future
Do you love to live in the moment? It’s a great approach to life! Sadly, it doesn’t quite work when it comes to managing your finances. You need to think about your present and future simultaneously. Retirement planning, therefore, must be on top of your list. In a way, that means more spending.
Putting a decent amount of money into the right retirement plan isn’t always easy. At times, you might even feel like you’re blocking your money for no reason. But don’t give into the temptation of breaking that Fixed Deposit or dipping into your Provident Fund. You can survive without the latest smartphone now, but you definitely can’t survive without a decent bank balance later. Don’t put your financial security at risk. You’re more likely to be financially vulnerable in your old age.
If you have just started earning, you can take baby steps towards retirement planning. Don’t wait too long. The earlier you start, the better for you. Start by opening a Recurring Deposit and to keep some money aside for your future. You can also consider investing in Mutual Funds. There are a couple of other savings options to try out. If you aren’t risk-averse, investing in the stock market is one such option. Get your basics right, and start trading.
Additional Reading: Your First Steps To Investing In The Stock Market
Building an emergency fund should be a part of your plan too. You never know what’s going to happen in future. Better be prepared, right? Stack up some money in the right places (and no, we don’t mean under your mattress).
Choosing quality over quantity
Whether or not you are a brand fanatic, you shouldn’t compromise on quality. We know buying high-quality goods can be a little expensive. But let’s not forget that high-quality goods also last longer. Therefore, you don’t need to keep buying the same thing over and over again. Buy a high-quality product now and it’ll last you a couple of years. A low-quality item might only last you a couple of months. When it comes to the more expensive things like electronic gadgets or automobiles, you can’t overlook the quality of the product.
Get your research right and choose the best available products. If it’s an electronic gadget, you must check the necessary product specifications beforehand. Don’t buy anything just because your friend bought it. Analyse your needs and requirements, choose the right brand and buy accordingly. Whether it’s a pair of jeans or something bigger, ensure that you get the best quality. It’ll last longer than the cheap roadside stuff (provided you use it well). Buying long-lasting products is the best way to save more. Don’t believe us? Try it for yourself and see.
Buying something that can help you earn
If buying something expensive now can help you earn more in future, go for it. For instance, if buying a particular, expensive laptop is going to be an asset that will help you with your designing work and help you make more money in the future, then consider getting it. You might feel that you’re unnecessarily blocking a lot of money. But don’t let such thoughts disrupt your rational decision-making capabilities.
If investing in your dreams now can help you make more in future, go ahead and make that investment. If you’re a businessperson, and buying a particular set of equipment can help you increase the production and ultimately your profit, buy it. It might not be an easy and economical choice to make, but it’ll sure help your profits in future. Whenever an added temporary expense helps make way for better future prospects, it’s ok to spend.
Overspending might not be the best thing to do, but there are situations where it absolutely makes sense. The magic lies in identifying those situations and acting accordingly. Following this approach also requires a lot of proper planning and execution. If you don’t have enough saved for a rainy day, you can’t think of overspending anyway. So, make a note of all these scenarios and spend that little extra when you see a benefit on the horizon.
Need a handy little tool to help manage your expenses? A Credit Card can help you shop better and earn cashback and rewards. Ready to explore our awesome offers? They’re just a click away!