Spending should be something you enjoy; you shouldn’t cringe every time you have to spend your money. For example, we can look at those people who do not save for a holiday. They just simply put it on their card and any form of short term credit available, this can be seen as grudge spending, because now you’ve paid to go on holiday and still have to fork out more money in order to enjoy it.

All of this can be avoided by simply saving to spend money in the future.

If you know you’re going away or something is coming up in the near future that is going to cost you (like having to change the tyres of your car) simply save what you can each month to lessen the blow of now having to spend on an extra cost i.e. credit.

The Importance Of Prefunding

This coincides perfectly with planning your budget and following through. We can look at it as prefunding for future obligations like holidays, kid’s education, and increased medical or insurance costs. The fact that you are prefunding means you are building yourself quite a vast safety net (depending how much you save each month) for future expenses and costs to you and your family.

Prefunding also means you can enjoy actually spending your money and enjoy the holiday you’ve saved up for. This puts spending money in an entirely different light and decreases you credit debt dramatically, which will also makes things easier for you to continue saving for the future.

Prefunding can be seen as a positive domino effect when it comes to your financial status, by reducing the need to utilise short term credit to make it through the month, as well as allowing you the ability to afford those unexpected or unprepared for situations. Even if you can only save a small amount at the beginning of each month, just remember a little will still go a long way in terms of your financial security.

And so, always remember to consider the above when thinking about your financial future. If you spend wisely, budget correctly and plan ahead for your expenses you will come out on top of your financial situation. You will also be able to enjoy those holidays and actually enjoy spending your own money on something you’ve worked very hard for.

Written for www.truthaboutmoney.co.za a 1Life initiative.