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3 Ways to Build Your Finances With Minimal Sacrifice

Money is an ever important facet of living in human society. As they say, “money makes the world go ‘round,” but it often seems like your bank account is never full enough to meet all of your needs, let alone desires.

By Craig MiddletonPublished 4 years ago 3 min read
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3 Ways to Build Your Finances With Minimal Sacrifice
Photo by Chronis Yan on Unsplash

Money is an ever important facet of living in human society. As they say, “money makes the world go ‘round,” but it often seems like your bank account is never full enough to meet all of your needs, let alone desires. However, there are methods available to help the average person get ahead of the curve to improve their finances and otherwise build their dream lives. Here’s what you need to know.

Financing Luxuries

When thinking of financing, one tends to think of a house or a car. This service has been integral in providing the working class with things that are necessary but prohibitively expensive for quite some time. However, there are other scenarios in which financing expensive products can be the best way to balance smart financial decision making with living your best life. For example, you can finance swimming pools to get the summertime recreation and relief you desire without spending a fortune on it in the moment. By spreading that cost out over time, you can bring your vacation to you without breaking the bank. This principle can also apply to many high end electronics, such as iPads, and it can also apply selectively with general retail products via layaway programs. Using these methods, you can gain the advantages of living beyond your means without actually taking the risk of doing so.

Reducing Costs

One of the most important methods of saving money is by spending less. Some might argue that refusing to spend money on creature comforts and luxuries is the right choice, that is only partially true. While some luxuries can be eliminated, those that enrich your life are important to maintaining mental health. Instead of making meaningful sacrifices, costs can be cut by simply buying less expensive alternatives to costly staples. Name brand products often fill that role, but you can often get the same value at a lower price by choosing off brand products instead. While there is some prestige to these name brand products, there is often not much else of substance to prevent you from buying competing products. It may take some experimentation to filter out products that are noticeably lower in quality, buying off brand products often entails little to no sacrifice in quality and can save you a ton of money over time. Another important method of reducing your living expenses is by cooking more. Processed foods are convenient, but they also typically cost you much more than making that product from scratch. Essentially, you’re paying more for convenience, and cooking your own meals trades your own time for that additional monetary cost.

Building Your Savings

Owning a savings account is perhaps the most crucial way to secure your financial future, but it also takes discipline to build up your funds over time. By simply separating your savings from your spending account, you’re giving yourself a psychological advantage. By cordoning off your savings and making them slightly less convenient to spend, you’re reducing the likelihood of spending your savings outside of emergency situations. However, adding to your savings is also important, and it runs counter to human psychology. The best way to increase your savings over time is to estimate your income for a given period and then deduct a percentage of that amount to put into savings, no questions asked. For this to work, you’ll also need to estimate your average expenses including food, utilities, and rent or mortgage. By doing this, you’re ensuring some growth in your savings over time, even if it’s less than you might like. Again, it’s critical that you don’t spend your savings unless you absolutely need to, as the primary purpose of the account is to accrue long term wealth.

Making the most of your finances can seem tricky at times, but there are several methods of increasing your financial security over time. It just takes knowledge and discipline to meet your financial goals, and these tips can help you with the former. Now, you just need to make your plan and stick to it.

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