Top 6 Ways to Increase Your Spending Power

Increase How Much You Can Spend

How can I increase your earning power? That's the question on most people's mind. This means to improve how much you can buy. Depending on your situation, there may be many ways to accomplish this goal. You can make more money, or find ways to stretch the dollars you have.

I've found that especially in the US, many people have trouble controlling spending. In my opinion, controlled spending is a skill that must be taught. Some parents are responsible enough to teach their children. Unfortunately, it's not a topic generally covered in schools. Additionally, the advertising and marketing departments at most companies are very effective at convincing you to buy a product you don't really need. The result of this perfect storm is young adults making poor spending decisions that impact the rest of their lives.

Regardless of your situation, its good to know the basic tips. Below, I've listed the Top 6 Ways to Increase Your Spending Power by most effectiveness:

  1. You can make more money via a higher salary. And it's obvious how a high paycheck will increase how much you can spend. For some, it may mean finding a higher paying job. Depending on your profession and the stage in your career, finding a higher paying job may be easier said than done. Since you get paychecks throughout the years, this is the most effective method.
  2. Pay off debt, starting with those with the highest interest rate like credit cards. With some interest rates as high as 15%, the total cost of paying off that new iPhone might surprise you. And payments like this will get worse with time as multiple purchases are made on credit. Admittingly, you'll have to "suffer" while you repay your debt, but that's being responsible and will improve your future spending power.
  3. Once your credit card debt is paid off, find a cash back credit card, preferable with no annual fee (they do exist). Then, purchase responsibly on your credit card, making sure to pay off your credit card at each statement. Some banks will allow you to setup auto-pay on your credit card statement to avoid missing a payment. Using a cash back credit card serves two purposes. You will get a fat check at the end of the year, and also begin building your credit (which is important if you ever decide to take a loan out for a car or home).
  4. Compare prices before you buy online at sites like Slickdeals. Though you may not find the exact item you are looking for, it may lead you to alternatives that save you hundreds of dollars, which mean you can purchase more stuff. Beware, sometimes the deals are too good, and it is easy to make an impulse buy you may later regret. Also include here is finding physical coupons. Some establishments offer coupons all the time (like my local Pie Store).
  5. If you are buying from an online merchant, check out sites like FatWallet. There are also many mobile phone apps that have a similar goal. Only expect to save a few percentage on your purchase, but over time, this method will add up. The best news is, you get the product you wanted. 
  6. Spend your money wisely. Reserve the restaurant for time outing with friends or celebrations. Constantly eating at restaurants can become an expensive habit that doesn't provide long lasting benefits. Don't forget to factor in the cost of gas, the pricier food, plus the 18% tip. You might think fast food is a good option, but fast food is in my opinion the equivalent of junk food. You may end up paying for healthcare as a result of excessive fast food consumption (just watch the documentary Supersize Me).
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