Thursday, November 8, 2018

My Thought Process On Discretionary Spending

First of all, apologies for the lack of posting as I just came back from my trip from Taiwan which my friends and I did our main objective of the trip which is to cycle. 

During our time there, we also witness a nice fireworks display and we also walked around a few of the night market. 




The topic that I wanted to write today however is about controlled spending, and this came up because my friends who were with me were asking why my spending was so low and how I manage my controlled spending, even though some of the stuff that we came across in Taiwan was really tempting at one point but I walked away from purchasing it. 

I thought I’d come up with a post on how I liberate my thought process when it comes to discretionary spending. 

First, by clearly segregating my spending as discretionary vs non-discretionary expenses in my budget, this gives me an immediate avenue to think straight between a need versus wants. 

Discretionary expenses are clearly “wants” and a nice to have and by it’s very nature you can walk out of it and nothing significant will happen to your life. 

For instance, your first and second purchase for your shoes are probably a need but beyond that it will probably go into the wants bucket. 

But these are items that are very tempting to buy, we can understand. 

A lot of money is paid to marketers to promote, market and brand their products to lure consumers to purchase them. With many various designs and brands competing against one another, this quickly becomes a buyer’s haven as they have limitless products to choose from. 

This brings us to the second point, which determines what should we be considering should we decide to buy them. 

The first and foremost is to to have a quick consult with the budget in our mind to see if we can still afford them this month. 

This will help ensure that we kept our spending tight within the intended budget we plan at the start and it doesn't viral rapidly elsewhere. 

If this criteria is not met, then I would walk away from it immediately without pondering further. 

If the criteria is met, I would then ask myself the utilization utility of the product I wanted to buy. 

If the product warrants a frequent use, then perhaps it gets closer to the need than wants and I can shift the category around. 

The idea of doing this is simply to ensure that it isn't an impulse buy that are based on first impression or look without using them much often. 

For frequent shoppers, this becomes a very important point because they generally like frequent changes or updates to the things they buy or wear, such as phones or shoes. 

I would also at times check if there was a cheaper version online for the same product that I'm eyeing because there might just be. 

Last but not least, I would then try to maximize my spend by using my Citicard Miles reward, which gives me 1.2 miles on per dollar spend. 

Some may think it's such a hassle to go through so many consideration before buying but once you are accustomed it comes naturally to you at a finger of a tip. 

We can still live a fruitful lifestyle, indulge in infrequent luxury at times and still manage to get our budget financials in shape. 

That's the best of all scenario.

Thanks for reading.

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2 comments:

  1. Controlled spending is the way forward, I agree. How some people get pleasure (albeit short lived) out of blowing tons of cash on stuff they don't need is beyond me. People huff and puff about their working life being tough and monotonous and then they spend $100 on a roof top bar. Work hard and be selective with what you buy. From there, invest with the wisdom of a sage. Easy peasy lemon squeezy.

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