People say that you have to spend money to make money, but what does that really mean? In basic terms, it means that if you want to improve your long term financial situation, you can’t simply hoard your money and stick it all in a savings account. Although saving money is a good idea, there are also a lot of situations where you should spend money instead of saving it. These are some of the best real-life examples of ways that you can spend money to make money.
Invest Your Money
Putting your money in a savings account is fine, but if you want to make significant gains, you should put your money into investments instead. A lot of people are concerned about the risks but if you make sensible investment choices and don’t throw your money into risky investments, you should be fine. Don’t forget the golden rule of investing either; never invest more than you can afford to lose. On the other hand, if you’re too afraid to take a risk, you’ll never make any money.
Use Cashback Cards And Apps
Earning money back on anything you spend sounds too good to be true but there are some great cashback credit cards out there. There are some brilliant apps like Checkout Saver, which will give you money back on any online purchases you make. This is a very simple way to make money from spending money. These apps also help you find discount codes and coupons so you can make even bigger savings.
Use A Credit Card Responsibly
A lot of people make the mistake of thinking that credit cards are bad news and you shouldn’t use them at all if you want to improve your finances. However, spending money on credit cards now can save you a lot of money later on, as long as you do it responsibly. Your credit rating affects the interest rate you get on loans and if you’ve got a bad credit rating, you will end up spending way more when you buy a car or get a mortgage, for example. You can improve your credit rating if you spend small amounts of money on your credit card now and that will lead to big savings in the future.
Pay For Quality
This applies to pretty much anything you buy, especially things like clothes or tools. If you go for the cheap option, you might save a bit of money now, but you’ll end up replacing those items in a few months. But if you are willing to spend more money upfront and pay for quality, you can buy things that last and make savings. Not only is this better for your bank balance, but it’s also less wasteful and better for the environment.
It’s important that you don’t misunderstand people when they say that you have to spend money to make money because it doesn’t mean that spending money is always a good idea. However, these are some real-life examples when spending more money is the right thing to do.