1. Set your budget (expenditure, Savings, Income and Wealth)
Draw up a budget. A budget is a plan on how you will spend your income or wealth. Since a person without a project plan has no direction and, therefore, no control over their resources, write down a list of regular and irregular expenses. That will help you track your needs and wants and how they impact your pocket. The budget also enables you to keep up with the inflation trend of your consumption basket.
Maybe you are consuming expensive goods, while you could substitute them with equivalent goods at a lower price. Regularly check whether the maximum expenses are respected. Make sure you cut your court according to your size. Save where possible. Gain control over your money with a budget. Setting up a budget helps you to enhance your personal finance and liquidity by helping you avoid impulse buying.
A budget is like a coin, meaning two-sided. On the one side, you will find your expenditure and savings, and on the other, your income and wealth. Budgeting helps you to balance between
2. Remember to save (liquidity)
The bigger the package, the more you save. Generally, it will cost more to process and package 4 bags of a product (weighing 1kg) than it would cost to package the same product in 1 bag (weighing 4kg). How do you plan your buying strategy? A bulky bag will cost less per unit (1 kg) than a smaller package (1 kg). Remember that the discount on more oversized packages isn’t usually a valid discount. The seller offers you the cost-degression-effect incurred by the large bulk-buying-behavior. But also ensure you do not overbuy and end up wasting products by having them expire on your shelves.
To implement your saving plan (creating wealth), ensure you have adequate arrangements to keep your savings away from your spending accounts. In modern times there are many means of creating wealth, ranging from classical banking services to digital solutions. Depending on your saving horizon, you should consider using several means of saving. Classical bank products such as saving accounts help ensure short-term access to liquidity, while shareholding and investment banking help you to enhance personal finance and liquidity in the long run.
3. Inform your self about the market
Do some window shopping. Strap on your walking shoes and head out for some reconnaissance. Do more than simply checking prices. Ensure the product’s quality and beware of knockoffs, imitations, and counterfeits. Ask for discounts and information about upcoming offers (Read the next tip). The more you know the market, the better your ability to make informed decisions. Therefore inform yourself about how goods are produced, just in case you also want to consider buying sustainable goods. Also, remember, high prices do not always signal high quality. Another confusion to avoid is the belief that local or global is the best alternative. Instead, we should look deeper into factors that justify local over international options.
4. Headhunt seasonal sales and discounts
Seasonal Sale! Different products will experience varying demands throughout the year based on weather & climate, fashion trends, availability of raw materials, etc. Stores usually look to clear-out their shelves before certain seasons begin in a bid to make space for the new seasons’ products. For people living in the Northern Hemisphere, a good example would be cold-weather products being on sale in February as stores look to bring in summer products. Do some research on your area and find out which products are on sale in each part of the year.
5. Differentiate between needs and wants
Do you plan for your needs beyond your basic needs? Differentiating between your Needs and Wants is vital when drawing up your budget. First, consider your basic needs. You need shelter (rent money), food for vitality, some clothes for warmth (and common decency), and Education to safeguard your future. Secondly, assign a portion of your budget to serve needs beyond your basic needs (Maslow’s hierarchy of needs). For instance, you should also budget for your hobbies.