How Making Smart Budget Decisions Can Upgrade Your Lifestyle

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There’s an odd disconnect between how people perceive frugality and the reality of living your life in a financially savvy way. It’s not about depriving yourself of pleasure at every opportunity, but rather being smart with your money to make it go further.

This is a skill you need to learn, and of course some of us are naturally more astute when it comes to budgeting than others. So if you’re on the fence about the idea, or you don’t know how to pursue it proactively, keep reading and we’ll explain the whys and the hows in detail.

Where you Might be Going Wrong

The primary point to pay attention to is the part of your spending habits which might seem sensible at first, but which break down under the gentlest scrutiny.

Take buying a car as an example. If you pick up a new model as part of a finance deal, you’ll be looking at getting a loan with an interest rate within the average range starting at 5.64% and rising to 14.78%. Given that the typical asking price of a fresh model is a little over $47,000 at the moment, with monthly repayments sitting at $726 per month, you’ll see a sizable slice of your budget taken up by this.

In comparison, if you check out quality used vehicles at a reputable local dealership, significant savings are possible without sacrificing anything in terms of the choice of options, the level of equipment, the technology or the safety systems. For instance, a visit to a Duluth car lot will give you variety and value in equal measure, so whether you buy cash or get a loan to pay for a second hand vehicle, your budget won’t be weighed down in quite the same way.

It’s just a case of recognizing that the kudos of having a brand new car is fleeting, and once the initial thrill wears off, you’ll be stuck with recurring payments that will impinge on your lifestyle in all sorts of other ways. Meanwhile buying used is a no-compromises affair – and if you’re feeling self-conscious about the model year, you can always add a personalized plate to hide this from all but the most observant automotive enthusiasts.

Car purchases are a big ticket budget item to consider, but there are others:

Daily Coffees: That small expenditure on daily artisan coffees adds up. Opt for making your coffee at home and save the café visits for special occasions.
Subscription Services: Take stock of all subscription services – streaming, magazines, apps. Cancel those you rarely use and consider sharing memberships with friends or family.
Grocery Shopping Without a List: This often leads to impulse buys. Plan your meals, make a list, stick to it, and watch the savings add up.
High Energy Costs: Simple adjustments like switching to LED bulbs, fixing leaks, and proper insulation can significantly reduce monthly utility bills.

How your Lifestyle can Flourish if you Balance your Budget

We’ve talked about the opportunities for saving cash that are out there, and which don’t require you to tone down your lifestyle choices too drastically. Now’s the time to discuss what you can do with the disposable income this should free up.

The data reflects a problematic trend in terms of savings at the moment, with just 3.6% of spare cash siphoned into savings. This is a pity, as it’s not just a case of putting money aside for serious things like retirement or a rainy day. With the right attitude and clear goals, your cash can be used for other things, such as:

Holidays: Why pour money down the drain with over-the-top payments on a new car, when buying used lets you reassign this money for a vacation fund. The memories you make traveling will be a lot more satisfying in the long term – and you can either push the boat out with pricier accommodation, a more distant destination, or more meals out. Just be money-savvy when planning vacations as well!
Home Improvements: Sprucing up your pad is inevitably expensive – but it’s an investment rather than lost cash. While a new car quickly loses value, a renovated home will be more desirable and saleable, so it’s a win-win.
Hobbies: How we use our free time is just as important as how we spend our money, and if you have more disposable income because your budget is better managed, you can justify pursuits that might previously have been out of your reach. Whether you’ve been lusting after a new guitar to jam on, or you want to get into horse riding, the savings you set aside by being smart with your cash month by month will unlock these opportunities and many more.

Final Thoughts

Hopefully it’s apparent that you can make smarter decisions with your budget without having to live like a monk. Being financially literate isn’t a miserly choice – it’s one that lets you live more freely.