In today’s day and age, it is straightforward to be smart with money. Company and product reviews show you who to go with and who not. Becoming a more discerning customer is your single biggest advantage on a day-to-day basis. Knowing what to spend your money on and what not can save you time and money in the long run. In 2018, it was straightforward to produce research on goods you plan to buy. This is especially easy on sites like Amazon and eBay, which offer product and seller details. In this article, I will explain how to become a more educated consumer regarding financial decisions.
1. Know the difference between elastic goods and inelastic goods
When a good is elastic, there are generally many substitutes for that good. Great examples of this would include shirts, shorts, shoes, and many others. An example of an inelastic good would be gasoline. Even though someone may be in a financial situation requiring them to seek a cash advance online, they will still have to purchase inelastic goods because there are no substitutes. You can correlate inelastic goods to oligopolies and monopolies. In the end, you must find the best deal with elastic goods. If a shirt is too expensive, it is easy to find a better deal. If gas is too costly, you have to pay for it.
2. Track what you pay
I know you think the day-to-day expenses don’t add up quickly, but they do. If you spend just $5 daily on coffee, that is over 1,800 dollars a year. It is important to create a monthly budget and stick to it. I use a Mint by Intuit app linked to my bank account. This way, it tracks every transaction I make. At the top of your budget, list your take-home pay. Then, list your expenses underneath it. You should finish with a cash surplus at the end of the month. You may spend too much on consumer goods if your money is too tight. You have an income problem if you aren’t bringing enough money home.
3. Big transactions require big attention
When making big transactions such as mortgages or car loans, it is essential not to be impulsive about these purchases. If you get super emotional, it can cause you to make an irrational decision you will regret later. For example, buying a car worth over half of your annual income is a bad mistake that can lead to bankruptcy. Also, let’s not forget about student loans. I wouldn’t take out any student loans. I would rather save cash and pay for it or get other financial aid forms. These big transactions should not be taken lightly, especially if you have other expenses.
All in all, personal finance is essential these days. It is more important than it has ever been. The good news is that there are many great sources to learn from, like Dave Ramsey and Grant Cardone. These guys are very knowledgeable about finances and will help you make smart consumer decisions. In the end, you have to control your financial destiny.
