Squeeze more out of your money

I was driving past a group of high school kids last week as they were washing cars trying to make money for a school trip. One of them had a very red face from working so hard. He was apparently in charge of drying towels and was twisting the towels very hard in order to squeeze as much water out of them as possible.

The other day when I was paid I remembered that kid squeezing the towels. The reason is because in my own way I do the same thing to my paycheck that he was doing to the towels. I want to “squeeze” as much stuff out of my paycheck as possible. I squeeze it pretty hard because I am usually convinced there is still some more value in there.

Getting value out of your money means getting “more” for the same amount of money. Think about what “more” means to you. To me value means things that add to my quality of life. Value can be a measure of enjoyment, distance, weight, volume, convenience, etc. Value could mean I got two shirts for the price of one. It could mean the savings I generated by making my home energy efficient allowed me to attend the concert I wanted to see. It could mean I paid the same for the higher quality sofa that I would have paid for the low quality sofa and got a better warranty. This quote from the Better Business Bureau was right on: “Being a savvy consumer is ultimately about using money wisely and, in this tough economy, many families are quickly learning how important it is to squeeze as much value as possible out of a dollar,” said Warren King, BBB President. “Creating a budget, researching businesses before you buy and staying away from scammers should be among everyone’s resolutions this year.”

Unlike squeezing water out of towel you don’t use arm strength to squeeze more value out of your income. The tools you use to extract more value are a budget and a financial plan. Your financial plan tells you what you want to accomplish with your income and how you are going to do it. Your budget keeps you on the most effective course toward accomplishing those goals. A budget is going to point out ways to reduce or eliminate expenses thus giving you more money to accomplish other things. Using these two tools and applying thoughtful, educated decision making in managing your money will always give you more value.

Some ways to ensure you are squeezing more value out of your money are to 1) find the person selling your desired good for 25% less, 2) find the person giving 25% more of that good for the same price, 3) find many smaller ways to lower each of your individual expenses a little bit until you are paying all of your expenses with 25% less money, and 4) make sure your purchase is a tax deduction!

For more information visit BowmansMoneyCollege.