Saturday, April 22, 2006

Know your main expenses

There are many people out there still not aware of the importance of knowing where their money flows out. Then, at the end, they will suffer as not having enough money even for food. Actually, it is not that hard to study our expenses. All we have to have is our bank statement, a calculator, a pen and a piece of paper. Then, let’s begin our mission for today- controlling the money outflow.

First, have a bank statement in front of you. This can be a hard copy or just an online bank statement. Look for the highest amount of outflow. Then, look at the item that you purchase with that amount of money. Let me give you an example. For me, my highest expenses are for cigarettes and foods. So, I will write cigarettes and foods with the amount of money I have spent on the paper.

Then, sum up the total money that you spent for that particular of things. This should be in a month period of time. Let say, I have spent $80.00 for cigarettes and $150.00 for the foods.

After that, look between these items that you can cut off the spending from them. For me, those 2 things are really essential for my life. But remember, our goal here is saving some of our money from over-expense on the main source of money outflow. So, I have to find solutions to this problem.

What I can do are reducing smoking activities per day and reducing buying junk foods. Before, I use to smoke whenever I want (minimum of 20 cigarettes a day). Now, I have to reduce it to 10 to 20 per day. That is a lot, but if I think again, I can save more money from it. Moreover, it is good for my health. For the junk food, I can substitute it with bread or other foods that can full my stomach. And as you know, bread is cheaper than junk food.

So, take your action now before it is too late. Know your main source of money outflow and construct strategies to overcome it. You should see the difference from your account balance next month if you try this.

Good luck!

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Thursday, April 20, 2006

Don’t pay more than you have to

Yesterday, on the way back from buying some groceries, I saw this advertisement on a van which said ‘don’t pay more than you have to’. At first glance, it was just as same as other advertisement, but when I think of it again, it gives a very deep meaning to me. So, I think it is good to share my thought here with you guys.

Price and quantity

This is the first things that came to my mind. Usually, if we pay less, we will get fewer goods. But, in this case, I think it means than you pay less than you normally have to. If so, then that is good. But, then I thought about seasonal sale than often occur in Wellington. When it comes to summer or winter sale, the price will drop drastically. That is why I always save my shopping time for this occasion. I can save tremendous amount of money that I can use it to buy other things. Then, what about the quality of the goods?

Price and quality

This is another important thing to look at. Since we buy cheap goods, sometimes they are not reliable. Take an example from my friend’s experience on buying a pair of cheap shoes. He bought these shoes during the last summer from a second-hand shop. Because they were so cheap, he bought them although it was obvious that one of the shoes seemed to be a fake one. Then, after wore the shoes for about 3 months, he suddenly realized that he cannot walk when the road is wet as one of the shoes is leaking.

Price, quality and quantity; what should we do?

Actually, all of the 3 things play very important roles in shaping our shopping style. But, to perfectly achieve all of them is quite impossible. So, what we can do?

First, the most important aspect is quality. Quality goods usually last longer, so you can use it over and over again. For example, I still have and wear my pair of shoes that I bought 4 years ago and I wear them everyday. But, if you are the type of people who like to buy new clothes every 2 or 3 days, this I not really important to you as you may interested more in price.

The next thing is price, which is closely related to our money flow. For me, I prefer to look around for the cheapest and high quality good than just buy it straight away. And we are lucky because we can access almost everything through the internet. So, besides saving our money, we also save lots of our precious time.

Quantity comes last as it is not quite important to have so many things in a house. Personally, I think it is a burden to have so many things in my home as I have to do maintenance regularly for each and every thing that I have. The easiest example is to have too many shirts. We will not wear 3 or 4 shirts at once, so there is a possibility of not wearing some of them. Then, we ended up with buying the clothes without using them at all.

So, make your decision wisely as every step we take will determine our future to become the next millionaire.

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