Developing better habits with spending money

Landing your first job and earning a salary for the first time are some of the initial steps to enable growth and build independence. However, along with these new opportunities comes greater challenges and responsibilities.

Earning money entails greater rewards, but if you give yourself too much freedom with your spending habits, you could develop toxic habits and poor values surrounding money. This could lead you to spend your earnings rather than build savings.

That is why it is very important for the youth to learn about money and spending habits. This way, they will understand how they should manage their earnings as it can help them in the present and the future.

Knowing when to spend your money

Developing habits with money starts early. If you can learn how to use your money wisely, you will be more equipped to take on financial responsibilities in the future.

Before you begin to spend your money, always ask yourself some questions first. Ask yourself questions such as, “Do I really need this right now?” “Can I afford this with how much I am making?” “Is it worth buying this now?” and “Can I wait for another time to get this?”

Second-guessing yourself is not a bad quality to have when it comes to spending money. It just means that you can recognize the situation you are in and weigh your options.

Figuring out what to spend your money on is difficult as everyone has their own financial situation. It is important to understand your unique financial situation, needs, and what you need to spend on currently.

Always prioritize essential things such as spending on transit for school, ways to contribute to your family, or purchasing school materials. Personal objects such as entertainment, clothing, or social events should not be prioritized. Instead, try to consider whether or not you need these items at the moment. This will ensure you have extra money for essentials.

Staying away from temptations

One bad habit that the youth can develop is spending money on things they are tempted to buy.

Once you start earning money, you may feel you can spend it on whatever you want. However, keeping this belief could develop into a bad practice, and you will burn through your money faster than you earn it. If you are not careful, this bad habit could lead you to accumulate debt, which can affect your credit score.

You can avoid temptations when spending by understanding when and how to spend your money. Asking yourself questions about the items you are interested in is a great way to start, and you can build off that.

You can also generate a list of things you need, identify your spending weaknesses, and track your spending. Some banking applications can help you track your spending and determine what you are spending the most on.

Regularly engaging in these steps can help you understand how to manage your earnings.  This will help you avoid spending your money impulsively and wasting it on non-essential items.

Saving and budgeting

In order to build better spending habits with money you can try to save as much as possible, set up spending limits, and create budgets for yourself. 

Understanding budgeting and limits is an essential part of making money. If you can implement this habit early on, it will help you in the present and future when you need to spend your money on something important such as tuition. 

If you are someone who likes to spend their money from time to time on things you enjoy, then try to set spending limits for each month. You should start by being strict with yourself and try to stay under your limits each month.

As you better understand how to manage your money and what you should spend it on, you can start giving yourself more room with your money.

Budgeting and saving does not necessarily mean that you should avoid spending money on things you want entirely. It is good to practice this so that you know what to spend your money on, and it will help you avoid impulse spending. If there is something you really want to buy, then learn to save your money for that item and not buy things so freely.

For example, if you want to go to a concert with your friends, set aside a budget that is enough for the concert ticket. Between the present and when that concert is, you should save as much of the money you earn as possible. During this time, you should prioritize essentials and only spend when you need to for things such as transit, school, or food. 

Developing good spending habits takes time, patience, and practice, but it will help you avoid incurring debt that can lead to major consequences in the future. Buying things for yourself occasionally is fun, but being financially stable is more important in the long run.