I’m sure it breaks your heart when mommy says you can’t have a new scooter or another Star Wars Lego set!
Have you hated them then?!
It’s hard when someone says you will not be taking home what you’ve set your heart on, and that’s what grown-ups call spending wisely!
If you’re wondering why you should “spend wisely” when you can buy lots of candy and enjoy playing with your Lego set, take a walk with us to understand this concept, why is it so important and how you can approach it.
Spending Wisely, Definition and Description
Sometimes we should cut back on some unnecessary expenses to be able to purchase the stuff that matters the most.
Imagine spending all of your pocket money on your favourite toy. How would you feel afterwards?!
You own what you wanted so much, but you can’t go to the cinema with your friends at the weekend because you don’t have anything left in your wallet or even your piggy bank.
The story you imagined is what happens to our parents in reality. If they keep on buying what they don’t need, finally they can’t purchase necessary things.
Now you may wonder, how can they determine what’s essential and what is not?!
What a clever question! Let’s see how our parents can decide buying security cameras is necessary but they postpone getting you a PS5 to another month?!
Learning the following subjects can help you understand the definition of “Spending Wisely”
Want or Need?!
The first step of becoming a financial expert when you are 12 is to learn the difference between wants and needs.
Need: is something that if we don’t have in our lives, we will face serious problems like food, water, clothes, etc.
Want: is something that you’ll feel good about after having it. But if you don’t have it, nothing terrible or dangerous will happen stuff like a brand-new iPad, or a pair of fashionable running shoes is considered a want.
The things that we need should be on top of our shopping list. They are the necessary stuff keeping us safe and satisfied. However, depending on various lifestyles, personalities, incomes, etc., anyone has different wants and needs. They even change over time. For example, when you were #2 years old, your “want” was diapers. But now, as you are 11 or 12 years old, your “want” is clothes or books.
The Pressure of Friends and Classmates and Emotions
I know you might feel you want the new Adidas backpack your friends just bought or feel left out for not having the latest iPhone.
All of us sometimes tend to have the same things as our classmates or friends, but the rational decision is to spend our pocket money on what we love or need and not just to look the same as our peer group.
Other people’s opinions can sometimes confuse us and make us believe we need certain stuff that we don’t.
In addition, sometimes the rush of excitement when we something nice can drive us to constantly buy something we don’t need. But remember, this passion can easily go away, and you find yourself wasting money on something you don’t need.
Is Advertising making you buy something?
Nowadays anywhere we go, we can see the footsteps of companies trying to make a sale. Advertising is a technique bands use to make us believe we need their products. To avoid misspending your pocket money, you have to be aware of the effect of advertising.
Highest quality-Lowest Price
We may think anything cheap is worth buying. But, the goal is to get the highest quality of what we need at a reasonable price.
Take buying shoes as an instance. Purchasing one pair with good quality and the proper cost is better than #3 cheap and mediocre ones.
If you know the value of money and the object you are buying, and the process of its production, you can make better decisions.
Find everything you should know about the value of money.
Now that you are familiar with the concept of spending wisely, you might wonder how to practice it. We’ve provided #4 smashing tips that help you in this process.
How to Spend Wisely?
- Write a shopping list: You can be the one reminding your parents to write a list before going grocery shopping. Write down anything necessary you need and stick to the list while shopping. That way you won’t be tempted to buy the stuff you don’t require.
- Compare Products: If you want to buy cereal for your breakfast, go to the aisle and compare different brands, see each one’s price, weight, and flavour and pick the one that wins the competition.
- Learn Marketing Strategies: Your parents know where to find the cheaper product, and you should know it too. It is a marketing strategy to put the most expensive item where the buyer can easily see it. Most of the time, the cheaper ones are placed on the lowest shelves.
- Family meeting: Attend your family meetings to talk about your wants and needs and ask for your parent’s opinion, let them help you decide which of the stuff you want to buy is more necessary.
As a 10-year-old you are old enough to understand how to spend your money wisely. Make yourself a list of what you want to have, then rate each one based on what you’ve learned here about wants and needs, emotions, advertising, etc.
Use your parent’s guidance and colour the items you need, use the shopping tips we mentioned and enjoy a wise purchase.