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Economics 102—Know What to Spend Your Money On

The hardest thing to understand in personal economics is that sometimes you have to spend in order to save.  The trick is to get as much value as you can for your money.  It’s a juggling act and here are some suggestions on what to spend on.

Refinance Your Car

How I hated extending a loan for my car for another year, but in this case I couldn’t help myself.  I was able to lower the interest rate to 2.94% and lower the required payments by $100 a month!  It didn’t cost anything and I can always keep paying the same amount as I did before but without the extra interest.  What a bargain!

Raise Your Retirement Income

I was very blessed to get a raise this year.  Instead of blowing it on something I didn’t need, I raised my retirement contribution by 1%.  It’s not the whole amount of my raise (I’m not a saint!) and now a little bit more is going to my future.

Buy Something for Your Home

The government is giving a tax credit for home improvements!  It has to be something on their improvement list, so a new Jacuzzi won’t qualify.  We put in new windows.  We should see up to a $1500 tax credit – not to mention the 30-40% savings on our monthly energy bill!  With an expected return of $100 a month, the improvement will pay for itself.

Invest in Yourself

So many people don’t give themselves a chance to learn something new.  Keeping the mind active is worth so much more than a tuition payment.  If you are looking for a way to stand out in this economy this is it.  If you can’t afford a degree, take a class. Anything that helps you improve your skill set will get you noticed—an put extra money in your pocket.

The trick to spending is to know where your money goes. Long term purchases should be negotiated to your advantage – that includes house and cars. As for retirement, planning for the future can made the ride a little more comfortable. The lesson here is not to forget to take care of your investments (and yourself) along the way. Next time – we’ll take a look at what we can do for others.


Cheryl Richter is a Christian that happens to be a CPA.  She has over 15 years of experience in the Audit profession.  She has written for the Kansas City Star, Faith section.

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