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Businesses and households alike employ various strategies designed to help control spending and generate the most benefit from available income. While there are many approaches to personal finances, the ability to develop a workable budget that accounts for all essentials and helps move the household or business closer to its financial goals is key to achieving and maintaining financial stability. Within the overall budgeting process, methods that help control spending by regulating purchasing or even stopping spending when necessary are essential, especially during periods in which adverse financial conditions threaten to undermine that security. Among the best ways to control spending are the need to develop responsible spending habits, pay attention to detail, and employ what is known as the 48 hour rule.
Developing responsible spending habits is easily one of the most important aspects of learning how to control spending. This begins with creating a workable budget and having the discipline to stick to that budget. At times this may be difficult, especially if there is an unanticipated increase in expenses associated with a given line item, such as food or utilities. When this type of event takes place, household members must be willing to cut back or even curtail certain activities or purchases in order to stay within the budget. For example, an increase in food costs may mean cutting back on the amount spend on dessert foods, diverting those funds toward the purchase of meats, fruits, and vegetables that compose the main portion of the meals.
Attention to detail is also very important when it comes to learning how to control spending. This often translates into comparing rates and prices on different goods and services on something of a regular basis. For example, instead of simply renewing the current auto insurance plan, a person should take the time to compare the premiums and the scope of coverage with plans offered by competitors. In the supermarket, he or she should compare not only unit prices on canned goods, but also the amount of product found in different brands of the same item. By being detail-oriented, households can save a great deal of money each month, making it possible to enjoy a decent standard of living even as more money is saved and diverted into some type of interest-bearing account.
Impulse buying is one of the easiest ways to become enslaved by out of control spending. In order to avoid this type of situation, people should make it a point to employ what is known is the 48-hour rule for any potential purchases outside the budget. The idea is that by delaying the purchase for a period of 48 hours, the consumer has the chance to get past that first rush of desire and can consider the purchase with a greater degree of objectivity. In many cases, delaying the purchase by a couple of days makes it possible to see that the item is not needed and is not likely to result in any type of long-term satisfaction.
Different people require different methods when it comes to learning how to control spending. Some find that paying in cash rather than using debit or credit cards is helpful. Others tend to go through cash quickly, but are more conservative with the use of checks or debit cards. Identifying what does and does not work for a given household may take time, but in the end the effort to control spending can mean a more comfortable life style that is relatively debt free and possibly also result in at least some savings tucked away for a rainy day.
People must stop buying stuff that they just do not need. Ignore the legal lies that is advertising.
Bill Bonner: "The entire world economy rests on the consumer; if he ever stops spending money he doesn't have on things he doesn't need -- we're done for."