Clark Howard’s Best….

Budgeting can seem a lot like dieting if you feel like you’re being deprived of something you’ve always had.  That’s why so many people never budget to begin with, which I believe is a big mistake.

Habits guide my spending decisions more than my actual budget.  When contemplating a purchase, I ask myself a few questions to avoid buying something that I might regret:

  1. Is this a want or a need?
  2. Can I afford it?
  3. Will this enhance my life?

When I choose to buy something after answering those questions, I can do so without feeling guilty.  I also don’t need to worry about overspending because of those savings habits I mentioned, which have become personal money mantras.

Here are a few examples to show you how I apply them in my daily life:

Know what things should cost

If you’ve ever watched “The Price is Right,” you know that half of America has no clue how much things cost. Once you understand the way retailers price items, you can decide what’s an acceptable amount you’re willing to pay.

Not all sales are equal

Retailers will plaster the word “sale” on just about anything because many shoppers will trust that they’re getting a good deal if it’s on sale. We know better than that. While I usually buy discounted items, I recognize that the word “sale” is part of corporate America’s marketing strategy to get you to spend more. Be a skeptical shopper.

Reject brand loyalty

Apple is just one example of a company that has enormous power over its customers. This is obvious by folks with perfectly acceptable phones who stand in line to trade-up to the company’s latest and greatest iPhone every September. Apple also has other expensive items to feed your addiction, such as the iPad and Apple Watch, which essentially perform the same functions as the phone. While these products may be great, think about how much money you could save if you considered what other brands have to offer.

Can I fix what I already have?

When something breaks, it doesn’t automatically have to go in the trash can. For example, wear and tear was taking a toll on a pair of my shoes. Instead of spending another $75 for a replacement pair, I used super glue to fix damage to the side of my shoes and then I used Mr. Clean Magic Eraser (generic version) to make them look brand new again.

Shop in store, buy online

A major downside to online shopping is that you can’t try on clothing or shoes before you make a purchase. That’s why I prefer to shop in brick-and-mortar stores and then go home to search for the best price on Google. This method also gives you more time to think about whether you really want or need the item in the first place, eliminating impulse spending.

Get every discount possible

One great thing about living in the digital age is that we no longer have to wait for a Sunday newspaper to clip coupons or find out what’s on sale. It’s all just a Google search away these days. In addition to maximizing store incentives, I save on online purchases by using TopCashBack, Ibotta, Swagbucks and shopping portals linked to my credit cards.

Banking should be free

Banks need our deposits in order to continue making loans, which earns them billions of dollars through interest. In return, I believe basic checking and savings accounts should be free. After all, the banks aren’t paying out much interest on our deposits, so why pay them? Consider a checking account like Capital One 360 to avoid being hit with monthly maintenance fees.

Your credit card should pay you

Like commercial banks, credit card companies are in the business of making money, but they’re not making it from me — they’re paying me. Right now, there are at least a dozen good rewards credit cards on the market, including some that pay 2% cash back on all purchases. Find a card that suits your lifestyle and pay it off in full every month to avoid interest charges. That’s the only way to go.

It doesn’t matter what other people think

This mantra has probably saved me more money than all of the other things I’ve mentioned in this article combined. My goal in life is to pack in as many experiences as I can, not to accumulate fancy cars, expensive clothing and silly gadgets that “everyone else” is buying. You have to define what really matters in your life and surround yourself with people who share similar beliefs. I’ve never met anyone who was happy trying to be someone else.

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