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How many time have you heard that you can’t spend any money at all if you want to be financially secure? Of course, you have to pay your bills and outgoings, but luxuries and fun item are out in most people’s plan for financial success. However, I’m here to tell you to throw all that advice out the window, and instead focus on selective spending.
To find out more, read on.
What is selective spending?
The idea with selective spending is that contrary to popular financial advice, spending nothing on fun isn’t good for your bank balance. In fact, it is demotivating and can lead to people breaking their budget more easily, and give up with their planned financial resolutions because it is too restrictive.
That is where selective spending comes in. Selective spending is about ensuring that there is enough in your budget to treat yourself to the things you love. Of course, these things will be different for everyone, and you do have to limit both what you will money on spend on, usually your valued interests, and how much you will spend. Hence the selective part.
How can I identify my valued interests?
For some of us, answering this question is easy. We have one valued interest or hobby that comes before anything else. If we love boating, then putting aside money for something like one of these outboard propellers every month is a no-brainer. After all, it is vital bit of kit that will allow us to continue doing the thing that we find fun.
However, for others of us that are less set on one single love and hobby, it can be a bit harder. In this case, it can help to make a list of the things you enjoy or even the projects that you want to compete in the coming months. Then use the budget you have set aside to do each one in turn on the list. This should work too, as it’s still motivating you to keep to your general budget, as you are giving yourself an allowance to spend on what you enjoy right now.
How can I stop impulse buying?
Lastly, one of the biggest threats to selective spending is impulse buying. This is when we see something and think we just have to have it right now, even though it’s not part four spending plan.
Waiting 10 days before any fun purchase can help curb impulse buying.
Luckily, there is a way that you can help limit impulse buying with the 10-day rule. That is when you never buy anything on the spot, but have to wait 10 days before you hand over the cash.
This can work brilliantly because you don’t deny yourself anything, while also giving yourself a cooling off period. Something that allows you to see if you really want to spend your limited budget on that item, or whether you are just getting caught up in the moment and being unselective in your spending choices. Something that we know can affect the viability of your financial plan overall.