Save Money by Understanding Why You

Save Money by Understanding Why You Spend It To save money, you simply need to spend less than you earn. It is easy to say, but why is it so difficult to do? To answer this question, you need to study the factors that keep you spending all the time. Easy access to credit For most people, this is the biggest reason for overspending. People can easily get a credit card, simply by filling out a short form in a bank or jumping on their website. They can borrow money from banks to go shopping, even buy cars or houses. When you aren't physically handing someone money or a check for a purchase, you will feel you are spending free money or you aren't spending money at all. Try using cash to get your spending under control. Misusing credit cards A credit card is an interest free short-term loan. When used as planned, this can be a powerful financial tool. The problem is when you begin to let the balance continue from month to month. If you make a $200 purchase on your credit card and find out that at the end of the month you can't afford to repay the full amount, this is when the high interest rates on the cards really begin to hurt you. That is no way of saving money. Giving in to temptation We all need to enjoy life, but don't waste your financial future for a few guilty pleasures today if they aren't in your budget. When you know that you can't afford an activity, don't give in. Instead, invite your friends over for a home dinner party, game night, or some other activities where you can still enjoy time together, but without breaking your budget. Spending to feel good Everyone enjoys getting something new — buying yourself something feels good. There is absolutely nothing wrong with this, as long as you don't go overboard. You'll feel good about your purchase whether you make it with cash or by credit card, but you'll feel even better when you don't have to spend the next two years trying to pay it off with 20% interest.