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How to Monitor your Expenditure to avoid Wasteful Spending

By Chantal

One of the greatest needs of life is the desire to have money. Money is a major part of our daily life. Spending money in a meaningful way is more advantageous than wasting money. To spend money entails the use of it to meet life’s needs. Hence spending money is simply solving a problem or need or challenge. Wasting money is not just an abuse to the money but also an abuse to the producers. Money should not change a person. It should simply make more of whatever the person really is and help the person impact the lives of others. The world today has lots of people who know how to spend money but little knowledge on how to work it. Hence, wasting money has become inevitable. It has been observed that those who work really hard to have money hardly engage in spending money unproductively. They always avoid shopping addiction because it greatly ruins their money leading. To spend money judiciously requires a thoughtful or conscious consideration so as to gain maximum satisfaction with the little money that one has. Having money is one aspect of life but spending money properly should be prioritized because that is one of the things that gives fulfillment or/and satisfaction in life. Money plays lots of roles with respect to humanity: with it we bargain, trade and exchange our way through life, afford shelter, food, pay bills, education, investment and even self provisions. One great writer by name Mike Murdock in his book titled “The Wisdom Commentaries” says money is a basic method of communication between human beings. To him, in war or peace, love or hate, etc. money speaks. Being obsessed with having money easily leads to shopping addiction in some people.

What is money?

The history of money has greatly evolved from when there was the use of metals like gold and silver and cowries. Before the trade and barter system was used whereby one needs to take a commodity, and then look for someone who has what he needs and needs what he has. Nowadays when we talk of money we are refereeing to coins and banknotes. Different countries have different currencies such as FCFA used by CEMAC countries, Dollars in US, French Franc in France, Naira in Nigeria, Yen, Pounds, etc.

The value of money is what money can really buy. For money to be of quality it needs to be generally accepted, divisible, durable, stable in value, recognizable, not easily counterfeited, etc.

Sources of money

People get money from various ways some of which include monthly salaries in paid jobs, payment in piece rate and time rate. Some people get money through gifts, awards. Others get their money through dubious means such as scamming, stealing, bribery and corruption, embezzlement etc. However one can predict that the way people waste money depends on their source or income. It is quite difficult to see someone who works quite hard to have shopping addiction when it comes to spending.

What you should consider when spending money

Spending money wisely requires skills just like that of a medical doctor, auto mechanic, plumber etc. When someone is engulfed with a shopping addiction, the person will not consider his spending habit and so ends up wasting money that would have been used for more productive purposes. Note the following points when spending money.

    Consider your spending habit. Shop wisely by identifying leakages on where you spend money that gives immediate satisfaction but do not help you reach financial goals. If your money runs out before your next paycheck rolls in, redress your past spending habits. The results of past actions are often good motivators for changing your present way of spending money.

    Consider your spending behavior. This is influenced by drives, stimulus, decision, response and consequences in spending money.

  • Learn to recognize the drive that places you in a spending situation. The drive is your inner force that creates a situation in which there is a temptation to spend.
  • Try to avoid or reduce your exposure to things that tempt you to spend. The stimulus is the cue that attracts your attention and encourages you to develop a shopping addiction
  • When you shop, have a purpose or a plan. Make a list on how to spend money before you go to the store. Stick to the list when you get there so as to avoid wasting money
  • Limit the number of trips you make to the store or the shopping mall. Stay away from the store except to buy the things you absolutely need.
  • Before spending money, think through the decision-making process. Before you buy, ask yourself what are your financial goals and priorities? What are your alternatives? Should I buy or do without, continue to use what I have to make instead of buy, borrow someone else’s, substitute something less expensive, rent instead of buy, etc.
  • Learn to say no to items that don’t rank high on your spending list, items that are too expensive for your budget, friends or relatives who are selling things.

How to monitor your spending

Money is meant to have value as well as have an important purpose for our lives. The misuse or waste of money can be destructive. Hence, to have a maximum satisfaction when spending money, one needs to monitor his or her spending habit. In spending money, some people might chose to be thrifty while others simply embrace a shopping addiction.

Holding or spending money should be for three main purposes as Economists say which include: Transaction, Speculation, and precautionary motives. Being conscious of the reasons for holding money will also guide us on how to spend the money. Spending should be guided by the above three views as proposed by Economists.

Functions of money

Identifying the role of money gives everyone a direction on how to spend the money. Four basic roles or functions of money are as follows:
Money as a medium of exchange. This means that we spend money to buy goods and services and to settle debts.

Standard for deferred payment:The use of money permits credit sales to be negotiated and payments made in future. It makes it easier for borrowing and lending.

Money is a unit of account. It helps in expressing the value of different goods and services.

Money serves as a store of value. Wealth is stored up in the form of money and can be easily converted to any asset in future. The value of money will fall when there is inflation and rises when there is deflation.

How do I avoid wasting money?

Wasting money is often associated with shopping addiction. When money is not properly and efficiently allocated, waste becomes inevitable. It’s very painful to work for money and the money cannot work for you. Hence whatever is to be done so as to maximize one’s expenditure, a careful analysis should be put in place. However the following ways can be used to avoid wasting money.

Avoid walking around with huge sums of money. Walking with huge sum of money increases ones appetite for spending money in that what ever the eye appreciates on the road side, it will desire to have and spending money will become the end result. With the advancement in technology, credit cards (ATM cards) are now available in most commercial banks and this greatly help to avoid theft and people walking around with money.

Learn how to Save. It is good to belong to a financial institution where saving can be done. Saving in a commercial bank or “njangi” house is a way of postponing present consumption for the future. When saving is done, it is believed that there will be an interest such that one can plan to achieve something greater with the future huge sum than what is in the present.

Consider your friends: Friends with shopping addiction easily influence our spending such that if care is not taken, we find ourselves wasting money. Avoid making friends with people who do not have any plan on how to judiciously use money to attend maximum satisfaction.

Always draw a budget. Draw a plan on how to spend money on a daily, monthly and even yearly basis. It helps us monitor our expenditures; both monthly expenditures and those that come up now and then. It’s very important to have a scale of preference as to what needs to meet at any point in time. Seasons change as well as the requirement for such seasons. Hence, it is advisable to go in for what is pressing at that point in time. Putting together a basic budget can help to manage and control our approach to spending money. This means that it is important to track your expenditures.

When you know your monthly average income, drawing a budget to avoid wasting money becomes vital. It is good to take track on regular expenditures such as food, rents, transport, entertainment, loan payments, education, etc. However some unforeseen expenditures could come from insurance, gifts, health care, vacation etc.

Steps to building a budget

Regardless of the budget you build, there are some basic budgeting tips that might help to reduce shopping addiction. Some of these include the following;

  • Build your budget on the basis of what you need and not what you want. It should be based on your pressing needs, what you spend money on – what you are hoping to achieve. It should be noted that people are different so are individual budgets needs to be different.
  • Use your budget to help make your decisions about spending money. If you build a budget, but don’t use it, it’s a waste of energy, time and resources.
  • Your budget should be flexible. This is because things change and income change thus affecting expenditures on goods and services.
  • Be honest and realistic in drafting a budget. If you aren’t honest with yourself in preparing it, you are only fooling yourself. Be realistic in terms of what you are to spend on and what you might have to forgo or do without, or trade off if you are going to get something else in the future or build up your savings.
  • Always keep accurate and clear records on how you spend money. Good record keeping is a key part of good money management that prevents waste.

Another aspect that will avoid the waste of money is to spend it on philanthropic gestures like supporting or providing assistance to the orphanages, prisons, widows, educating the girl child, supporting communities in providing portable water, electricity etc. Hence, using money in these ways helps to avoid shopping addiction where purchases are often done on irrelevant things.

Advantages of money

Many people see money as a source of power, influence, achievement and security in life. However the knowledge on how to spend money effectively and efficiently should be the most important. It is generally believed that the poor spend money judiciously than the rich and the rich often find themselves suffering from shopping addiction.

Disadvantages of money

Money often brings in pride. Most of the evils or crimes committed in the world are related to money. Such crimes include scamming, stealing, corruption, embezzlement, fraud etc. This runs down the image of not just the individual but the entire country. Money has made a lot of people to look down on others as desperate and not well to do in the society. Its quite ironical to see that even in social, cultural, political gatherings, people are voted into office not because of their knowledge as to what is required of them but of their financial ability; While those with money to spend get positions, the poor are bound to remain on the pews

It takes self-control and time in order to monitor your expenditure so as to avoid wasting money.  Developing self control is a gradual process, but you can do it by readjusting to a spending habit you want to change, choosing some strategies you can use to change your habit of spending money, look for specific things you can do to reduce spending as well as set some deadlines for yourself.

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