How to be a smart spender?
Improve your financial health with these important tips
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We live in a consumer-driven society where we’re constantly bombarded with messages that tell us to spend. In 2016, the term, YOLO (You Only Live Once) was officially added to the Oxford English Dictionary and ever since, we’ve seen countless marketing campaigns using this word to entice consumers to spend more.

While there is no harm in exchanging our cash for things that will make us feel happy, we need to balance our spending to make sure that we aren’t splurging beyond our means. Coupled with the rising costs of living and inflation rates that are at a historical high, perhaps it’s time to take a step back and revisit our finances so that we have our needs covered, before addressing the wants.
Identifying our needs and wants
Before we can decide how to manage our finances, we must first identify what the needs and wants are in our lives. Essentially, needs are the necessities to live and function daily. Wants, on the other hand, are the nice-to-haves, and things that can improve your quality of life. However, they are also things that we can live without.

Identifying our needs may seem straightforward, since we all know that it is important to have a roof over our heads and food on the table. But even when looking for a place to live, expenses can vary significantly depending on the type of housing we choose. Work out a range you can comfortably afford before being tempted to buy or rent a home that will wipe out half your paycheck. Similarly, don’t lose sight of your objective when looking to get a car. Since its purpose is to get you from one place to another, it shouldn’t matter if the car has a sunroof. Consider second hand cars as well for a wider range of options, maybe even saving you quite a bit of money. The best thing to do is to create a list of your key expenditures and objectively categorise them. Ask yourself: is this something you can live without? If so, they fall into the wants category.

Depending on our life stage and priorities, some of our needs and wants will change over time. But be careful of making the mistake of identifying a want as a need. For example, do you really need to have a barista-made flat white every morning, or would home-made coffee be sufficient? Is dessert after every meal necessary? Cutting back on the few extra dollars every time you dine can quickly add up to quite a good amount over time.


For parents, it can be tempting to give your children “the best,” by being financially generous. But before you book the next birthday party venue, think about whether your child needs to host her friends at that lavish indoor playground, or if a home party is sufficient. Instead of pouring hundreds or thousands of dollars for a one-time event, maybe the money is better placed in an education fund for their future.

Saving for a rainy day

The rule of thumb is to save 20% of your monthly income. At the very minimum, you should aim to save at least 10%. This is because we never know when we’ll need to dip into our savings. In other words, always have a “trigger button,” for when the unexpected happens. For instance, if a family member requires treatment for a sudden illness, or if you happen to get into a minor car accident and need to fix your bumper. Ideally, most of us would already have insurance to cover these mishaps, but there are always loopholes so it’s prudent to have some spare cash on hand. By being prepared financially, you can also keep a better frame of mind when facing any unwanted situations.

Killing two birds with one stone
Spend wisely. You’ve probably heard this one too many times, but being wise about our spending is important, because it means that we can stretch our dollar for the things we need, freeing us with more leeway to spend on the things we want. A simple example is when purchasing groceries at the supermarket. Occasionally, brands run promotions and if you can be flexible enough to take advantage of these promotions, you’ll find that it can amount to quite a significant amount of savings. In turn, you’ll probably get to include that tub of ice cream into the checkout basket without having to pay more than your budgeted grocery spend.

List down your savings and expenses

We’ve probably all been there at least once in our lives – where we wonder where our money went at the end of the month. Did we dine out a little too much or make too many purchases that seemed harmless at the time we swiped the card? Was it a holiday that we might have overspent on? Make it a habit to list down your expenses so that you know where your money goes. This can also help you identify if you’re spending more on items that fall into the needs category, or the wants category.

By being aware of our pitfalls, we can be more mindful of our spending habits. For example, if you’ve identified that shopping is your weakness, the next time you browse your favourite ecommerce website, pause and think before clicking “add to cart” so you’ll be less tempted to buy yet another blouse over lunch break.

Loans and the potential rabbit hole that comes with it
With banks offering interest-free loans like our 0% Instalment Plan, it’s easy to get our hands on things we want even before our next paycheck arrives. But while there can be many benefits to getting a loan, it’s always a good idea to pause and ask yourself why you are considering one.
Avoid buying big-ticket items on impulse. Sleep on it for a few nights, and go back to it only after you’ve weighed the pros and cons so that you can make a more informed decision.

Ultimately, there is no right or wrong in what you choose to do with your money. It is your hard-earned cash, after all, and you deserve to spend it the way you want, on the things you want. As long as you’ve budgeted well and have all bases covered, you’ll be able to splurge on the additional wants in life, guilt-free.

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