In a world where people spend a lot on luxury, pleasure and popular branded items, money management is one thing people fail to learn.
While you are wondering how to be financially prudent. This article explains six ways financially stable people manage their money. Continue reading to discover things people who are good with money never buy.
1. Non-commercial houses
While real estate is a good investment, people who are good with money don’t invest in non-commercial houses. Non-commercial houses are residential properties used as a living space. They won’t spend money on a higher priced house that won’t return the value of their investment.
Compared to the annual return of commercial properties, which is about 6% and 12% higher than the purchase price, non-commercial houses’ annual return is between 1% to 4%. People who are good with money spend their money on more financially rewarding properties.
Houses are a long-term purchase, so they ensure they get the value of their money in the future.
2. Paid TV subscription
TV subscriptions cost people a lot of money, especially young individuals. TV subscriptions are little things that can cost a lot of money after summing up how much you spend each month. People waste an average of $300 per year on subscriptions they are not using. The top services they subscribe to include food, beauty, and entertainment.
However, people who are good with money don’t spend their money on things they are not using. They don’t have the unhealthy streaming habit most people have by paying for services that are not useful to them. Instead, they cancel any subscription services that they aren’t using.
3. Latest fashion trends
Many people spend a lot of money to keep up with the latest fashion trends. People who are good with money don’t waste money on costumes. Instead, they buy functional clothes to serve multi needs while maintaining their bank account. It is financially unhealthy to spend a lot of money on piling clothes in your closet.
When you match your clothing to the newest trends, old ones have already been replaced by new ones because trends change quickly.
You will not be getting value for your money by spending so much on the new fashion trends.
4. High deductible health plans
People who are good with money opt for a less deductible health insurance package. They ensure they don’t subscribe to an elite medical plan or private Medicare, which is usually expensive and may not guarantee the best healthcare.
Lots of people spend a lot of money buying exotic medical products, however, financially prudent people ensure they follow the best health practices, such as: sleep well, eat fresh food, exercise regularly etc. This enables them to avoid health issues that would take a high percentage of their money.
5. In-app video game consoles
In-app video game consoles are another thing people who are good with money don’t buy. Video games are expensive items that give any value.
There is always an introduction of a new generation of pricey game consoles in the market. While game consoles vary in price, they can be expensive ranging from $500 and $399. Even at a decent price, if you get one of the last consoles, you’ll need a replacement much sooner.
6. High energy consuming electronics
The amount of money people spend on electricity bills is at a record high. This is a result of high energy consuming devices. People who are good with money don’t spend their hard-earned dollars on these types of electronics, rather they opt for smarter devices with less energy requirements. Further saving cost.
It’s very important to follow this strategy and reduce unnecessary cost of energy and power.
Like Warren Buffet always said: “Savings up, expenses down-No.1 rule“.
You don’t require much, before learning how to put your money to good use. Separating your needs from your wants and recognizing your purchasing power is crucial. You should focus on maximizing your gains and the value of your money by spending your money on quality and durable items.