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Top 10 Tips For Smart Spending In 2021

Many people struggle with learning and practicing smart ways for spending their money wisely. It can feel like an uphill battle when you are constantly spending more money than intended and never having enough of your paycheck to put aside for those unexpected emergencies that crop up in your day-to-day life. Most things in life have a cost attached to them and it can feel overwhelming. 

Most people, especially those who earn a low income, when they first try to put aside money get overwhelmed looking at their finances. The constant worry over money and paying your bills on time make it so looking at your bank account is a terrifying experience. Eventually, you just stop looking and pretend your money troubles don’t exist and that is a huge mistake. It makes much more sense to know what you are bringing in and what you are spending and ways to cut back, eliminating your debt, and planning for the future.

With a little financial knowledge, you can not only spend your money more wisely, but you can also start saving, even if there are necessities that need paying for, like those bills that you need to pay monthly. 

Below are 10 tips that will help you spend your hard-earned money more wisely no matter your income or if you haven’t been able to save before.

Read more: 14 Frugal Living Tips You Can Implement Today and Save Thousands


10 Tips for Smart Spending

Learning how to spend your money wisely is important once you start having a steady income. More often than not, people don’t really understand the importance of having and keeping to a budget, which can lead to disastrous consequences. When you spend your money in smart ways, it causes you to spend less of it and save some money overall as well. Knowing how to spend it, on what purchases, and making better choices is essential for smart spending and keeping more of your money in your pocket. Below are ten ideas for how to spend your money wisely. 

Prioritising your purchases

Chances are, you don’t have enough income to buy all that you need and want at the same time. You can probably only afford one or two things. Setting spending priorities simply means focusing on what is important to you rather than buying everything on your list. This may mean that you cannot spend any money on leisure activities because you have to pay all your bills. It might also mean only buying a pair of shoes and not the dress and necklace along with it. 

Patience is a spending virtue 

Sometimes life happens and you have to buy an item immediately, like in the case of unexpected car repairs. However, where possible you should hold off on buying an item. “That way you can wait for discounts, any special sales coming up, like Black Friday, or wait until it’s in less demand, which lowers the price. Doing this when you can, helps keep you from overspending on items and saves a ton of money in the long run,” says Barbara Jackson, a writer at Academized.

Define your long-term spending goals

Having long-term spending goals makes it so much easier to know when a purchase is worth it or not. You can weigh each decision against your goals and decide on a case-by-case basis whether you can go ahead with the purchase or not. If the purchase will drive you further along toward reaching your long-term goals, then it is worth going ahead and buying the item or service you need. This can also help you save money as well, as it can make it easier for you to put money aside every month. 


Pay down your debts

This is a common piece of advice and it’s a really good one to bear in mind. If you have credit card debt, outstanding loans, anything that you need to pay back, then you need to make payments on and free yourself of all of your debt. Debt includes not only the original cost, but the interest you will pay in the future, as well as lost interest from investments. Debt is a burden and can be costly even if your interest rates are good. 

To avoid any debt, pay with case wherever possible instead of financing or buy-now-pay-later schemes. Sometimes, it’s good to use credit cards, as many have cashback or loyalty point schemes that make using them a good option. However, make sure that you can pay it off in full before the interest is due. 

Read more: How to Pay Off Debt Fast

Living below your means

Just because you make a six-figure salary doesn’t mean you have to live that lifestyle. Consistently spending less than you earn is a smart spending tip that helps you save money in the long term. The money you don’t spend goes into savings or your investment account. A wonderful way to ensure this is to do this at the beginning of the month before you can even think about spending it. 

Make a realistic budget you will want to keep

Budgeting is essential for spending your money wisely, as well as saving it. The trick is to make sure it’s realistic so you can stick it out, month in and month out, and feel good about it. Budgets help you become more aware of your spending habits, keep on top of paying all of your bills on time and build your savings. 


A budget is the basis of understanding personal finance and is a must-have essential skill that everyone needs to learn. It prevents overspending and being broke and in debt, should anything go terribly wrong in your life, like being made redundant during a global pandemic. Your budget is your ticket to a fully-funded emergency fund. 

You can learn how to make a budget through your local bank and there are also many apps and computer programs that can help you automate the budgeting process, which can save you time and stress. 

Borrow and reuse as often as possible.

Why pay for things when you can get by with borrowing them or reusing them? Borrowing things like hammers and screwdrivers, or even tents and sugar. If you will not use it often, it’s worth asking your family, neighbor, or friend. Reusing items is also important. Reuse empty bottles as water bottles saves you from buying bottled water. Save your plastic takeaway container and use them as leftover containers, instead of buying Tupperware. These are just some examples of ways to reuse items, so you spend less on unnecessary purchases. 

Have an emergency and sink funds to help you out

When you have emergency and sinking funds, you protect yourself from spending more than you can afford and you can spend the money guilt and worry-free because you can actually afford it. 

An emergency fund is a savings pot that you have set aside to cover unexpected expenses, like car breakdowns and unexpected trips to the hospital. It’s important to note that this pot should only cover unforeseeable expenses, which comes up as a total surprise.


A sinking fund is a pot of savings that covers a specific expense. So, for example, you might wish to purchase an expensive birthday gift for your partner. Instead of waiting until the last minute, you put aside some money each week into a separate savings account until you have enough and then buy the gift. Or putting money aside each month to cover the cost of your vehicle inspection. It’s money that is set aside for one known future expense.

Get your partner onboard with your financial plans

If you have a partner, getting them on board with your future spending and saving plans is a good idea. Working as a team is always the best option. You can sit down and discuss each purchase and if there were better, cheaper options available for purchase. 

You can also make up for each other’s flaws. Say you tend to be an emotional spender and your partner tends to be more rational. Their spending habits may influence you to become more disciplined in your spending over time. If you are good with numbers, while your partner is bad with them, then maybe you can be the one setting up the spreadsheets and doing the calculations. 

Skip café coffees and eating out 

Two of the biggest ways to waste money are eating out all the time and going and buying coffee in coffee shops. People spend a lot of money buying coffee or tea on the go and eating out. Making your morning cup of coffee at home and packing a lunch, rather than buying out are great ways to reduce your spending. 

Meal prepping for the week saves time on cooking and makes it a lot easier to avoid takeaways, which are more expensive and tend to be less healthy. 


This isn’t to say that you can never buy a Starbucks latte or late-night Chinese takeaway. Rather, just limit how often you do these things. If you really love visiting your morning coffee shop, then make that a priority, and find alternative ways to skim your spending,

Takeaways on smart spending

Smart spending helps you save money that you can use for the future. Understanding the basics of personal financing, like making and sticking to a budget, is an essential skill that all adults need to know how to do. There are many resources available to help you learn how to make better financial decisions for your future. 

Spending your money wisely requires understanding your spending habits and long-term spending goals and prioritizing them, so you spend money on the right things.

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