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5 Great Ways to Save Discretionary Money

The money you set aside for discretionary purposes is a truly wonderful part of your budget. It’s that little section of money that you feel is truly yours. All other amounts are the sole property of your debtors. A few thousand go straight to living expenses that can’t be avoided, ex. mortgages, car payments, utilities, and food.

While some financial experts will say that as long as you have debt you should never be setting aside any discretionary money, it’s important to not let your budget feel as though it’s strangling you. If you feel that your budget is too strict it will usually lead to just losing your budget altogether.

As long as you are working towards paying down your debts and your immediate financial responsibilities have been paid such as short term or payday loans that are due, the discretionary money is yours that you can use for anything, and that comes with a truly freeing feeling. Wouldn’t it be nice therefore if you could stretch that discretionary money to encompass more things?

Luckily you can. There are a lot of ways you can save money on things you would already be using your discretionary money for. Here are 8 of the best ways to do it.

Save Money on Entertainment

Begin by getting a library card. For those readers and movie watchers, a library card allows you access to nearly unlimited literature and cinema for free. With the recent advance to e-book checkouts, you can check a book out without ever leaving the comfort of your own home and read it on your e-reader. After a normal checkout period, your book will automatically delete itself from your system.

You already pay for the library system with your taxes; why not take advantage of the resources that are rightfully yours? Get a library card and check out a book or movie before you buy it.

Most of the time, you won’t read or watch these stories again. Why buy them if you’re never going to pick them up again? Library cards will help you filter out the books and movies you would like to own.

Once you find the media you can’t live without, you can use your discretionary money on them. Until then, don’t waste your money on them yet.

Ask a Friend

Second, share entertainment amongst your friends. If you don’t own a particular movie, someone you know likely does. Ask to borrow the movie for a weekend and return it promptly afterwards. With an extended network of friends, you can get your movie fix without having to purchase it.

Timing is Everything

Third, stop paying for the more expensive entertainment when there are cheaper options. A Friday night movie is nice, but a Saturday afternoon matinee is cheaper.

When the difference in price comes down to the time of day instead of quality of product, the choice can be a no brainer. Go see that movie you’ve been dying to see, but see it at a cheaper price.

Make Your Hobbies Pay

Fourth, invest in something that will turn a profit when it’s time to sell again. Turn a hobby into an income. If you’re interested in guns, make that into a money maker. Buy a gun, modify it, use it to your heart’s content and then turn around and sell it for more than you spent on it.

Just as long as you’re using the gun for your own use before selling it, you won’t have to create a business out of it. It’s just a way to make money off the investments you put your discretionary money into.

Turn whatever you are purchasing with your discretionary money into something you can sell again later. Some ideas will be more obvious than others, but with enough of a creative idea, you can learn to make money instead of just spend it. An additional source of income is never a bad thing either.

Look For Free Entertainment

Fifth, find as many free things to attend as possible. You can find outdoor movies, meetings, plays, and celebrations going on all the time, especially during the summer. Don’t be afraid to try something you wouldn’t normally do either.

Go to see things simply because they’re there to see. You will enjoy a more rich and diversified life if you get out there. You will learn more about the world, even if all you learn is that you don’t want to be a part of that experience again.

Wherever you live, free events are going on all the time. Get involved with the community and you’ll know where they are.

Just because your money has been marked for free use, doesn’t mean that you have to use it without thought. The occasional night on the town is a great activity to use it on. Most of the time though, why not stretch it a bit to get maximum enjoyment?

You might find better uses for that money if you don’t use it on the first big idea that pops into your head. Other times you’ll make something more with it than you ever thought possible before.

Tip of The Week: Don’t Bank on Financial Windfalls

One of the most common daydreams among people both young and old is having a large amount of money dropped in your lap out of nowhere. Whether it’s a sudden inheritance or a hefty tax return it’s easy to let yourself dream about all the things you could use a large financial windfall for, whether it’s a new car, larger house, home improvement projects or a dream vacation the list can go on and on. While it’s fun to dream about financial windfalls coming your way, it’s important to understand the difference between dreaming and reality when it comes to your budget.

financial windfalls

As a lot of people start working on their personal budgets they start daydreaming about how they can pay certain bills or mortgages off faster if they had a financial windfall come their way. Sometimes if people aren’t careful they’ll start banking on these financial windfalls coming their way and justify new purchases based on the hope that somehow they’ll get a bunch of money out of nowhere. Some of the most common windfalls that people bank on include:

Tax Return- This is by far the most common windfall that people seem to bank on. Tax returns can be an amazing way to quickly build up your savings but because of all the marketing directed at people on how they should spend their tax return people usually end up throwing away their tax returns on more consumer debt such as a bigger tv, new appliances, etc… While there are sometimes legitimate uses for your tax return such as fixing a leaky roof, vehicle repairs etc.. if you are truly trying to improve your financial situation you should use your tax return to either pay down your consumer debt or put the money into savings.

Salary Bonus or Raise- If you’re fortunate enough to have a job in this economy you should consider yourself lucky. If you are even more fortunate to work for a company that is doing so well that it has a surplus to offer as bonuses to their employees you are very fortunate. A downside to bonus or a raise is that it can lead people to irrational spending. If you know that a bonus or raise is coming your way it can lead you rationalizing big purchases with the thought that you’ll be able to pay for it once your big bonus comes through. The problem with that thought process is the fact that you never know for sure how much your bonus or hopeful raise is going to be, another thing that a lot of people don’t want to think about is that sometimes when bonuses are supposed to be released, companies will sometimes do layoffs instead because they’ve been looking at the numbers and they realize that they need to do something drastic to improve the numbers for the quarter. If you make several big purchases leading up to a raise or bonus and end up getting laid off instead it can put you in a very tough spot financially.

Unexpected Inheritance- Time and time again you’ll see this windfall used as the source for movie and television show storylines. The classic story of a distant relative leaving millions of dollars to you is a nice story but not likely to happen. With so many movies and television shows using an “unexpected inheritance” as a storyline it’s no wonder that so many people think that it could happen to them. While it’s fun to dream about, it’s just not realistic to spend irresponsibly with the hope that a distant relative is going to pass away and leave thousands or millions of dollars in your name. As crazy as it may sound, sometimes people don’t even bank off of a distant relative leaving them a large sum of money, sometimes people will dig themselves into a large financial hole thinking that their elderly parents or grandparents will pass away soon only to find out that there was little or no inheritance to be had. In addition to just being distasteful it’s a poor financial move as well.

Lawsuit Settlement- With this point we’re not discussing frivolous lawsuits, but the fact that sometimes people find themselves the victim of an accident or have been injured in some other way and are workings towards a settlement that will help them overcome the pain or injury caused by the accident. Sometimes people will look at a lawsuit settlement as a great way to get have some extra money but what they need to take a serious look at is that even though these settlements will cover the major medical bills, you’re most likely only rewarded money for “damages” if they feel that you’re going to have some ongoing pain or discomfort as a result of the accident which could mean future medical bills and other expenses. So while it may be tempting to spend your new found money on consumer products, set the money aside, maybe even in a different account to help pay for additional medical bills that may come in the future.

Regardless of whether or not you do find yourself the beneficiary of a financial windfall in the future, the key is to be disciplined and stick to your personal budget. If you have some money land in your lap unexpectedly, pay down your debts or put it in the bank and act like it never happened. That way you will be able to move closer to your goal of financial independence.

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