• Ward says developing spending systems can help make the process feel more controlled.
• She likes making lists of potential splurges outside of her monthly budget and then reviewing them all at the end of each quarter before deciding whether or not to buy the item. That way, she’s not constantly spending excessive amounts on unplanned items.
• “It makes it more special. You’ve waited for the item, and you’re rewarding yourself,” she adds.
DEVELOP A SUSTAINABLE SPENDING SYSTEM Establishing certain habits, such as reviewing your spending regularly and cutting back in areas that have crept upward, such as subscriptions, can be a helpful way to create a sustainable balance of spending and saving, Ward says. “Maybe you have a roommate, spouse or friend and you can learn together or share savings tips once a month,” Ward says. “Instead of a book club, have a money-saving tips club. We can learn so much from each other.” “I’ve seen success when people have systems for their paychecks and they build in some fun money into that system,” she adds. For example, perhaps 10% of your paycheck can go toward a discretionary category that allows for some splurges. And if you receive a windfall in the form of a tax refund, bonus or inheritance, Ward suggests applying the same concept.
“Give yourself permission to spend up to 10% on something you love that’s meaningful to you,” she says.
KIMBERLY PALMER writes for NerdWallet. Email: kpalmer@nerdwallet.com Twitter: @kimberlypalmer The article How to Create a Spending Plan originally appeared on NerdWallet.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. and Inceptia do not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
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