CHAPTER 8: KEY TO SUCCESSFUL SPENDING

• LIVING WITHIN YOUR MEANS

  To spend less or only as much as money as you earn it involves being aware of the difference between what you need and what you want.
• FINDING THE BEST VALUES

  Generally, the product with the lowest unit cost is the best value.
• CUTTING EXCESS SPENDING

  Excessive Entertainment Expenses, Unplanned Shopping Sprees, Luxury or Status Items
• SHUNNING CONSUMER CREDIT

  Consumer credit is expensive, and it reinforces financial habits: spending more than can afford.
• TRADITIONAL WAY OF BUDGETING

  is a common method where budgets are based on past spending patterns. The process involves taking last month' s budget or actuals and making incremental adjustments for the next period.
• ZERO-BASED BUDGETING

  This approach requires justifying every expense from scratch, regardless of previous budgets. It involves assigning a specific purpose to every dollar of income, with no money left unallocated for the upcoming period.