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Tuesday, January 24, 2012

Ways to Cut Budget: Buy Only What You Need

In financial management, in order to keep our financial in healthy condition, growing money via investment or increment is not always the best solution. Many times we need to spend below our means rather than spending within our means. But then again, of course everyone is asking to increase income because by increasing income, you do not need to sacrifice a lot of things.

Well, I have been quite free the last few days that I managed to read Reader's Digest and find out one article which is very suitable for this. It also serves as a good reminder for myself as well, as I will be cash strapped throughout this year as big portion of the money will be used for house renovation as well as to pay the house down payment.

The following are the ways to cut budget:-

Buy only what you need
This one sounds obvious, but how many of us really buy what is truly necessary? A lot of us often buy in bulk in order to reduce our costs but sometimes we ended up wasting what we might not be using it after all. This happens a lot on products which have expiry such as food. Of course, if you intended to buy in bulk, make sure you share the cost with family or friends as this is part of the smart spending strategy to cope with the inflation.

Another thing is, majority of us usually buy expensive gadgets with additional features, although we seldom use the feature when we actually can get the same gadget with about all the feature that we wanted for a whole lot less money. In the end, we are actually paying for the research and development of the features that we might not be using it throughout the lifespan of the gadget. What I would suggest is, rather than getting the highest end segment of the product, why not look into the mid range? Of course I will not encourage getting the gadget from the lowest end segment as most of the time the replacement parts of the gadget might even end of life or we are staring at the product which might already not in production anymore and there is no support for the hardware or even the software.

Finally, we always buy something that we deemed cheap - actually I was one of the victim as well until I realized that last year I actually bought a lot of clothes for Chinese New Year, and the total of the whole purchase could be even more than thousands. The fact that I bought those clothes during cheap sales or buy one free one season made me think I actually save a lot, but in actual fact I am spending a whole lot for clothes that I might not even wear it throughout the year. Should I have not spend it, I will be having additional savings or cash for other purposes.

Guess that's all I have to share now. I will post more on ways to cut budget moving forward.

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