Some people believe the only way to spend money wisely is to never spend it in the first place, but this is too much of a drastic approach to personal finances. The key to spending prudently is to get as much as possible out of every penny earned, and this can be achieved by means of thoughtful spending and speaking with a financial consultant. San Diego residents may appreciate the following recommendations that can help them get the most out of their money.
Understand the Time Value of Money
Without getting too deep into economic theory, the time value of money is a principle that states currency will always be worth more now than in the future. If you consider that the United States Federal Reserve estimates an annual rate of inflation of about two percent, the value of your money will be 10 percent less in five years. With this in mind, you will get more out of spending smartly than stuffing cash under your mattress.
Research Generic Products
Those store-brand products at your local supermarket may be of a higher quality than you think. Read the fine print on bags of coffee and packages of pasta. In many cases, the manufacturers or distributors are the same as those that appear on the fancy packaging of premium brands. Ask your doctor to indicate generic medications when writing a new prescription.
Spend Money on Making More Money
Depending on your career, spending on education and training is one of the smartest decisions you can make. Think about how much more you could earn after getting your MBA, completing a professional certification curriculum, or getting a specialty license.
Plan for the Near Future
Whenever you feel money burning a hole in your pocket, think about spending it on something that can benefit you and your family for months to come. If you see a good deal on a large box of laundry detergent, go ahead and buy it now. If you can afford a comprehensive auto insurance policy with full coverage, enjoy the peace of mind along with low deductibles for the next six months.
Avoid Redundant Expenses
Take the time to evaluate the on-demand programming your cable company offers. If it matches your Netflix viewing habits, it does not make sense to pay for both subscriptions. All the same, if you are constantly streaming films on your smartphone data plan, you may want to drop your home broadband plan.
Young families in Japan are practicing the art of living with fewer material possessions to save money and reduce stress. When you make a conscious decision to live with less, you may think more about your purchases since the idea is to avoid adding more things to your life.
When living in San Diego, financial planning is an important aspect of maintaining a high quality of life. If you need help managing your finances, reach out to Jan Gleisner, a reliable local financial advisor. Don’t hesitate to get in touch today.