Why do you need financial literacy to be able to spend money? The answer is simple: To make informed spending choices. You should know your rights as a consumer, as well as how to research and compare products. It’s important to be able to read through manipulative marketing made to convince you to buy stuff. You should have a basic understanding of what companies have your best interest at heart and what companies are only looking for creative ways to drain your pockets. Some credit cards, for example, require a minimum monthly payment whether or not you have a balance. This could be a huge red flag in the long run. Car dealerships use a similar concept. Why do you think car dealers always tell you about the bi-weekly price? Because “Only $150 bi-weekly” sounds better than “Only $35,000.”
It is also important to understand the basic principles of saving money. You need to know how to successfully save money on your purchases. Make sure that you are getting the best deal for your bargain. Never take the first deal you see. Instead, do your research on similar products and companies. Some other examples of ways to save your money on purchases including couponing, reviewing sales ads prior to the sale, comparing making the purchase online compared to going to the actual store location, downloading the store apps on your cell phone, and researching social media platforms by joining groups that provide tips and resources.
In the long run, these tips and tricks can make your future a lot easier. You’ll be able to spend your money freely while also watching more money grow within your bank accounts. But remember to budget before carelessly spending. This is the trick of it all. Planning for spending can help people make informed choices. Develop a budget plan for spending, saving and managing income. Always remember that costs are things that a decision maker gives up. Benefits are things that a decision maker gains. Make an informed decision by comparing the costs and benefits of spending alternatives.
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