MANY people have resolved in 2010 to cut spending and reduce household and personal expenses in general. It’s a great idea whether it was spurred by the rigours of the current recession or just plain ‘hard times’. So, we can make a fresh start, let’s stop and think of how much you could keep in your pocket if you stopped “mindlessly wasting money” Just imagine the funds you save from rectifying the error of your ways could become millions when you begin to save and invest!

Here’s what to look out for:

Buying Unnecessary Items

You enter an appliance store and you spot that neat gadget you’ve seen advertised on Cable TV. You examine it and realise that at home you have a similar device that performs the same function, please don’t buy it. Many of us allow ourselves to get drawn into the 21st Century hype with its latest fads that seem to be ‘must-haves’. This is a sure way of wasting your money, especially if it isn’t a part of your budget. So here’s the thing, analyse the situation and see if you really need to have a particular item or are you just buying on impulse. If you are buying on impulse, simply don’t get it.

Eating Out

In some homes, sitting down to a nice hot family dinner is a thing of the past. Fast food has become an essential part of our lives. Naturally, ordering a pizza and going to a restaurant for dinner, is so much easier than slaving away in the kitchen. However, be certain that this is also a sure way to waste money. Think of how much you could actually save by simply cooking a meal. Face it, eating out every day is extremely expensive and should be something we do occasionally.

Refusing to Shop Around

You would be surprised by how much you can save by shopping around. Don’t purchase the first $4,000 outfit you see, or the first car that appeals to you, before checking other retailers. Shop around and you may see something similar that costs less. So keep an eye out for bargains.

Gambling

While it may be okay to spend $30 on the hope of winning a $30 million lottery, gambling away most of your salary is not advised. Remember it is important to think ahead and plan for the future by saving a good portion of your salary. What better way to achieve your financial goals!

The credit card

It’s useful to have them around, but be careful as they can really prompt you to spend. The interest rates are usually high, and if you always use your credit card to purchase an item, this increases the amount you owe on them. Therefore, to minimise your credit card debt, use it sparingly and avoid using it whenever possible.

Super-Size Spending

Don’t get me wrong here, buying in bulk can definitely allow you to hold on to some extra cash, but only if you’re shopping for a large family where it’s guaranteed that all this excess food will not go to waste. The key is to shop wholesale wisely.

Aim to think before spending. “Do I need this?” “Will it benefit me in any way?” “Is the cost worth it?” Then be comfortable with your purchase. When you realise you’ve managed to save a decent amount, how about investing it, then your money would be put to good use in the future.

Written by Vanessa Reid Boothe

Vice President — Sales & Service

Scotia DBG Investments Ltd.