Do you buy a smartphone each time a new model is launched without checking your bank balance? Maybe you like to dine with friends every night of the week and then hit the malls on weekends? Are you the type to shop with a list or budget?

If you haven’t realized it yet, your spending habits could make or break your finances. Whether you’re just starting on your first job or have long been earning a steady income, it’s how you spend your money that will determine how much you get to save.

You can learn how to become a wise spender by monitoring your buying habits. Here are seven tips to get you started:

1. Set budgets. A budget gives you limits to your spending, especially for non-essential items. It also allows you to plan how and when you can get your next ‘major acquisition’, so that you don’t fall into debt. Let’s say you’ve set aside P1,500 for non-essential items per month, but you want to get the newest smartphone that has a price tag of P5,000. Knowing this, you can explore installment options that would let you pay no more than P1,500 a month for your purchase.

2. Know your priorities. It’s tempting to buy just everything you set your heart on, but you have to know your priorities and the exact things you need. Have a concrete shopping list. If you want to beautify your home, don’t go to the mall with a broad goal of home improvement. Instead, identify the exact things you need – a blue bed sheet for the kids’ room, a large flower vase for the living room, a non-skid floor rug for the toilet. This way, you don’t end up buying everything you see that will eventually not have real use for.

3. Take advantage of sales and promotions. Time your purchases to coincide with sales and promotions so that you can save. For instance, if you are planning a trip, then find a ticket being sold at promotional prices. Get to know store promotions too. Some groceries offer discounted prices for buyers who buy early in the day, while some bakeshops sell all of their items at a steep discount in the evening. However, don’t use sales as an excuse to overspend on unnecessary items. Remember that you should only get items that are on sale when you need these.

4. Compare prices. Before you buy anything, make it a point to compare prices. If you’re in a store, check between brands and among sizes. Sometimes, you can save up to 40% by buying items in larger packaging. House brands may also sell at very attractive prices compared to other brands. If you’re buying medicine, make sure to ask about the price of generics. Before buying anything, a quick internet search will also be helpful, especially now that almost everything, including grocery items, are being sold online.

5. Avoid penalties and surcharges. If you’re not careful, you can spend a fortune on penalties and surcharges. If you’re using a credit card, you incur late payment charges when you do not pay your bills on time, or when you go over your limits. Imagine how much you’ll spend if you pay late every month. For utilities and tax payments, late payments could result in disconnection which will require you to pay a reconnection fee.

6. Watch interest expenses. Installment deals are a cool way to buy big-ticket purchases, but do keep an eye on interest charges. If you are unable to pay your credit card bills in full, pay as much as you can before the due date to keep your fees low. Better yet, refinance your credit card debt so that you can keep interest payments low. Be especially mindful of interest rates when paying for tuition fees, as well as for your car and home.

7. Think before spending. Before you spend on anything, make it a habit to first ask yourself why you need to buy that item. Is it something that you really need, or is it something that you are just buying out of habit? Let’s say you always buy doughnuts for your kids—do they really like it or do they eat it only because you get it? Before you get fries with your burger, think if you really want the fries or you’re just getting it because it’s being pushed your way. In this day of mindless consumption, being able to pause to rethink each purchase will go a long way in helping you better manage your spending.

Keep in mind, saving is not only way you can grow your personal wealth. Wise spending means prioritizing your future instead of buying things in the present you may not even need today. Learning how to spend wisely is a lifelong process that you can harness as you go through life. With commitment, consistency and discipline, you can become a wiser spender.

----
Grow Your Money is an editorial partnership between News.abs-cbn.com and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances.

Visit www.citibank.com.ph for more information.