Readers' Tips for Financial Renewal, Part 2: How to Spend Wisely

spending habitsA few weeks ago, we asked our DailyFinance readers for their best advice on how to get your financial house in order. As many noted, part of living well is spending wisely -- after all, while saving money is vital for your long-term security, there are times when, like it or not, you'll need to part with a pile of cash. With that in mind, here are some great tips for making your money stretch further -- and fighting the urge to spend at all.

Many readers offered simple, no-nonsense advice. "DocDearth," for example, suggested that readers keep their cash in the bank -- and out of their wallets. After all, "if you don't have it in your pocket, you're much less likely to spend it." Similarly, "Joe the Tightwad" reduced intelligent spending to a simple equation: "Make two cents spend one, result: prosperity. Make two cents spend three, result: misery." Admittedly, as "Joe" noted, this wasn't his own quote -- it was adapted from David Copperfield.

Motivate Yourself!

Just saving money, though, isn't usually so simple, especially given the complex emotions that often underlie spending. "Frank S." suggests that readers have to "Stop the 'live up to the Jones's' syndrome."

But while it's easy to chalk up some purchases to a combination of envy and competition, the simple fact is that living within one's means -- or, as "Daniel W." suggests, living "BELOW your means" -- can often be difficult. The simplest advice, as "Donut999" notes, is to always ask yourself "Is this something I WANT or something I need?"

One big key is motivating yourself to save. "Whitney G." suggests that developing a long-term plan can help with short-term motivation: "Each year, make up a personal financial statement to see how much you have gained in net worth. If you spend one penny more than you take in, you're going backward!" For that matter, it also helps to have clear-cut goals: In Whitney's case, this was a brand-new car: "I drove second-hand cars until I was 50 and invested the couple thousand dollars I saved each year into land. Now I can afford to drive a new F-150 XLT!!"

"J.H." suggests working on the emotional spending problem from the other side of equation: Only desire things that you can afford. Channeling a hint of Buddhism's Four Noble Truths, he observes that "Cruises, skiing, and driving BMWs are all fun, but so are crossword puzzles. If you don't already have them, find things you enjoy doing that cost little or no money."

Pay Yourself ... Not the Bank

Another way to make your money stretch further is to avoid paying interest; after all, every penny that goes to your credit card company is a penny that doesn't go into your bank account. With that in mind, several readers suggested staying out of debt. "David A," "Fercoop" and "Donut999" all took this to a logical conclusion and decided to pay off their mortgages ahead of time.

That runs counter to what most financial planners suggest -- keeping your mortgage, as the tax deduction combined with low interest rates can often translate into a hefty benefit. However, as "David A" wrote, the lack of a mortgage payment "allowed us to weather a bad job move and steep drop in pay a few years ago." Similarly, "Fercoop," who has made extra mortgage payments to pay the loan off faster, notes that "I can begin to consider taking jobs that truly interest me, instead of worrying about how much money I'll make."

Speaking of lifestyle decisions, several readers noted that the condition of one's finances makes a big difference when it comes to the choices that one can make. "Bob S" offered a particularly clear-eyed and unsentimental view of financial responsibility: "No children until you can pay for them." Also, he suggested: "Get rid of bad debts. It may require a divorce."

Get Out of Town ... or Out of the Country

Some readers took the "modifying your lifestyle to improve your finances" path to an extreme. "Joel B" said that he and his spouse moved to Puerto Vallarta, Mexico, "where the cost of living is much less than in Los Angeles, our previous home." The L.A. equivalent for his $200,000 Mexican home, he says, "would easily have topped $1 million." As for health care, he noted that a recent root canal and crown implantation cost him $425. In L.A., he says, "the total would have been $2,700."

But even if you don't move to another country, you can still save by taking advantage of less expensive economies. As "Susan S" notes, vacationers can save a lot of money by "visiting countries where the dollar is strong." She and her family went to Peru, which she describes as "an amazing country with majestic mountains, ancient ruins, and a world-renowned culinary scene." Best of all, "The dollar is very strong, making travel more affordable."

As many readers noted, saving money is all well and good, but ultimately, financial security may lie with spending well and wisely. What's more, they pointed out, the possessions that you think about the most carefully -- and the gratification that you delay the longest -- often become the most rewarding. In the end, perhaps one secret to a life well lived is a budget carefully considered.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at, or follow him on Twitter at @bruce1971.

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Reverse Mortgages are designed for seniors over age 62 who are house-rich but cash-poor and desire to remain in their home. Seniors having substantial home equity and wanting to remain in their home should consider a reverse mortgage to be used to supplement retirement income or structured to provide funds for unexpected needs.

July 16 2013 at 12:28 PM Report abuse rate up rate down Reply

. Mr. always right and every one else wrong,******* I rest my case. Either you're a narcissist or or a moron, most likely both. What ever your lot in life you're a loser --------------------------------Every libtard I've ever met does this, acusing others of the sins they themselves commit. Trying to justify your ugly personal attacks instead of losing the debate. That's called ad hominum mr cranky pants educated in a libtard college.

February 06 2012 at 9:38 AM Report abuse rate up rate down Reply




February 05 2012 at 9:21 PM Report abuse +1 rate up rate down Reply

Keep all your money in the bank not your wallet so we "The Banksters" can rob you again! I recently opened a new checking account and was asked if i would also like to open a savings account. My reply was NO, i want to open a spending account!

February 05 2012 at 4:37 PM Report abuse +2 rate up rate down Reply

Steo one:
Get rid of Obsama.
Step Two:

February 05 2012 at 4:17 PM Report abuse -2 rate up rate down Reply

You gotta love it ! Our Social Security funds have been pilferred to the point of non existance,, 401 K funds mysteriously dissappearing, & yet heres another article telling us sheep to pucker our butt cheeks around our wallets I would much prefer reading a article about some body taking the time to follow the paper trail leading to the real reason why we are being advised to cut our spending. There is no doubt in my mind that some type of criminal activity is involved here. We are expected to get by with less so others can prosper ? Is this the new American way ?

February 05 2012 at 3:17 PM Report abuse +1 rate up rate down Reply

Interesting news today: apparently the national GOP is now implicated in Wisconsin nazi-boy's crime ring. The plot thickens..

February 05 2012 at 12:23 PM Report abuse +2 rate up rate down Reply

UHHHHHH!!! the sky is falling, your economic procrastinators continue to be DEAD WRONG. States do not have the authority to issue currency, and your so-called "legal tender' is just traded like it is anywhere else. There is no hyperinflation, and the only depression is the one caused by fraudulent right wing economic policy, i.e. raygundubyanomics.------------------------1 replies to MOFKER''s comment--------------------------------
Unlike individual communities, which ARE allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it ALLOWS the states to make "gold and silver Coin a Tender in Payment of Debts."

legislators who are proposing state-issued currencies, that means gold and silver are lawful said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.

The state gold rush: Utah became the first state to introduce its own alternative currency when Governor Gary Herbert signed a bill into law last March that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment. Under the law, the coins -- which include American Gold and Silver Eagles -- are treated the same as U.S. dollars for tax purposes and eliminates capital gains taxes.

Since the face value of some U.S.-minted gold and silver coins -- like the one-ounce, $50 American Gold Eagle coin -- is so much less than the metal value (one ounce of gold is now worth more than $1,700), the new law allows the coins to be exchanged at their market value, based on weight and fineness.

February 05 2012 at 11:16 AM Report abuse +2 rate up rate down Reply
1 reply to Mike's comment

The future of U.S. currency: The states' proposals have been gaining steam among Tea Partyers and Republicans, many of whom also endorse a nationwide return to the gold standard, which would require the U.S. dollar to be backed by gold reserves.
Tea Party "father" Ron Paul is sponsoring the "Free Competition in Currency Act," which would allow states to introduce their own currencies, and rival Newt Gingrich is calling for a commission to look at how the country can get back to the gold standard.
Individual states that ARE really get the ball rolling, said Vieira.

February 05 2012 at 11:36 AM Report abuse +1 rate up rate down Reply

Buy Am.
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February 05 2012 at 4:33 AM Report abuse -1 rate up rate down Reply