When I was a young little chap, I was terrible when it comes to handling money. I would spend my money freely like a celebrity on Complex’s Sneaker Shopping episode. I went out and sprayed my hard earned money on clothes, shoes, dining out and partying - it was bad. I definitely didn’t understand the value of money. 

However, as I got older, I learnt from my poor financial behaviours and decisions, where I believe I’ve become a lot better with still plenty of room for improvement. Life is about constantly learning and growing. Even my girlfriend said to me the other week that she mentioned to her mum how diligent I was with my finances. That would have not come out anyone’s mouth 5-8 years ago haha.  

I want to share these experiences and knowledge with you to help you develop healthy financial habits for the short and long term future along with avoiding my own stupid mistakes too. Here are eight tips on how to spend and manage your money better:

Buying sale items because they are on sale

Who’s guilty of impulse buying something just because it was on sale? I used to be a regular culprit, but and still occasionally do this. Don’t buy something simply because it was on sale. Was this on your wishlist? Would you purchase it if it was full price? If the answer is no, most of the time, it’s not worth it. You’re not saving money if you didn’t want it in the first place, you’re still spending money, regardless of the discount. 

Consider cost per wear/use 

When it comes to spending, saving and managing money, it’s not always about purchasing the cheapest available. It’s about getting the most value out of the product or service you’re purchasing. Lets use two examples:

Buying tech items such as a phone or laptop - these are expensive purchases in the short term, but in my opinion, are regularly used every day, so they have high long term value. Hence, despite them hitting the wallet hard when initially purchased, because they are regularly used, the cost per use would be very low. In comparison, purchasing a designer jacket that might be initially cheaper than those two tech items may have a higher cost per wear over time. Firstly, it’s a seasonal item that has numerous alternatives such as a jumper, hoodie, along with many other jacket styles. Considering this, the cost per wear of a designer jacket will be much higher than a phone or a laptop unless you plan on wearing the jacket everyday which is highly unlikely. 

Sell off old/unused items 

Rather than have these items sitting at the back of your wardrobe or in a spare room, sell them on online marketplaces such as eBay or Facebook selling groups to make some money that can be saved or spent on something you like now. Even though, it may be viewed an overall loss, it’s better than having that item sit somewhere unused/unworn. For example, lets say you have a hoodie that you purchased for $150 that now is sitting somewhere in your wardrobe where you haven’t worn it in over 12 months. If you sold it for $50, even if it’s still a total loss of $100, It’s better than letting it sit there and having a total loss of $150 right? 

Buy what you like and can afford 

Wear what you like, and buy within your means. Don’t purchase products or services that you can’t afford to impress others. The few compliments here and there aren’t worth it in the long run. Your ego might get temporarily heightened but your bank account might be in strife for a long while. 

Download a money tracking app 

In order to manage your spending, you need to be able to visualise the incomings and outgoings of all your money. Download a money tracking app such as Expense, where you will be able to see how your money is spent across several categories. When you’re able to see the overall picture, it will assist you in knowing things like what to cut down and what bills are coming up. 

Building a positive relationship with credit cards 

I was horrible with credit cards. I got approved for one at 18 and spent it like I was a celebrity. I honestly thought I was loaded. I was studying and working full time, so I believed that I deserve to spend all my hard earned money along with the bank’s money. It was such an immature mindset to have and this put me into some credit debt which took me a while to claw back. 

However, this hasn’t pushed me away from using a credit card. I learnt my lessons, and I’m glad that I learnt them at a younger age where I didn’t have many bills to pay and there were less consequences. 

Credit cards have a multitude of benefits such as cashback options, shopping vouchers, flyers points and helping you build a credit score. The latter is a crucial factor that the bank uses when you’re applying to borrow large sums of money to buy something such as a home. 

When you have a credit card, my number tip is to ensure you pay your bill in full every month. Treat it as a debit card. Don’t pay the minimum because the interest adds up, and it’ll take you a long time to pay it back. You’ll end up paying more money back than you originally used. 

Build an emergency fund 

You never know when you might run into some money trouble, where you lose your job or have been financially hit hard in your life. Having an emergency fund as a backup/safety net will assist you in these tough situations. 

Here’s a simple way on how to build your emergency fund. Find out the total cost of your bills for 3-6 months and add a little extra for breathing room. For example, if your total bill is $500 per month, save up $1500 plus another $1000 for a 3-month emergency fund. 

Unsubscribe/unfollow emails/accounts that encourage you to spend money 

Save yourself from those unnecessary temptations. Declutter your inbox and purge the accounts you’re following on social media. You don’t want to be constantly reminded or promotions and sales, where it increases your likelihood to spend on impulse purchases. I understand there are some occasional amazing deals, so I’m not advising you to remove all the emails and accounts from your favourite brands. Keep a few and learn self-control to only purchase the items and services you truly want.