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The pandemic has taken a massive toll on the economy, negatively affecting both individuals and small businesses.
Related: How To Stay On A Budget And Spend Less During COVID-19
Also: 50 ways to live the big life on a small budget
As the economy recovers from its setback, you may wonder what, why, and how to make smart decisions when it comes to spending what is necessary.
This is a great way to be wise or spend money during the economic recovery.
Know the difference between your wants and needs
Differentiating wants and needs can be difficult for many people, but if you can successfully put your needs above your wants, you may be able to pay off your debt faster and more efficiently.
While splurging a bit might not be a problem, buying an expensive new watch or designer shoes can wait. Always make sure your necessities are paid for and don’t think about spending on your needs until after you’ve paid your bills and invested money in savings.
If in doubt, do not make impulse purchases. Instead, consider whether you can better use this money for your future.
Learn More: Shopping Mistakes You Make And How To Stop Using Them
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Keep track of your expenses
Whether you are a beginner or an expert at keeping track of your personal finances, it is always a good idea to keep track of your expenses. Whether it’s a packet of chewing gum or a bottle of water, knowing how much you spend each day is key to successful financial planning. You will be surprised how quickly small and imperceptible expenses can pile up – especially when using a credit card.
To know and understand your financial needs, the first thing to do is to take the time to observe your weekly and monthly spending habits. While difficult, you need to go through your monthly credit card statements and see the charges. It may be difficult at first, but taking some time to keep track of your finances will be a cornerstone of your financial success.
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Try cash when running everyday errands. You will be more careful with spending when you can physically see your money being spent.
Discover: 30 cash movements that could equip you for life
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Buy locally to support your community
Supporting locally made products and local businesses has a bigger impact on you and your community than you can imagine.
Local businesses are passionate about their customers and often deliver personalized and great shopping experiences to their communities. Supporting these companies shapes and strengthens entrepreneurial skills within the community so that business owners can expand and grow – which in turn brings money back to the communities where they work and live.
Small Business Spotlight 2021: Take a look at our Small Business Stories and the nominated companies in your area
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Buy generic without sacrificing quality
Name brands may be more appealing because of their colorful packaging and known credibility, but why waste money when you can buy products with exactly the same ingredients at a fraction of the cost?
Generic brands were viewed by many as inferior ingredients and not as well made. But that’s not true – in fact, some generics are exactly the same as branded products. At Costco, for example, some of the store’s Kirkland line of products are made by companies like Kimberly-Clark and Duracell.
If you have any doubts about buying generic branded foods or medications, read the ingredients list on the back of the pack. You might be shocked by the similarities.
Related: The Best and Worst Things to Buy Generic
Always, always, always save!
If you’re the type of person who will spend your money first and then save what is left, now is the time to make a change. Set a reasonable amount that you want to save weekly or monthly and make sure that money is not spent elsewhere.
Try: 50 Simple Things You Should Do To Save Money
You might want to check if your bank has the ability to automatically transfer a set amount from your checking account to your savings account every month. Automating your savings can make it easier to invest.
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This article originally appeared on GOBankingRates.com: How and Where to Spend Wisely When the Economy Recovers from the Pandemic