Examine, take control of personal spending

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Spending money is easy, The tough part is getting the best value for the money. |ret||ret||tab|

When it comes to our lifestyles, it's not so much what we earn that counts, but how we spend it. By paying attention to why and how we spend money, it may be possible to boost our standard of living virtually overnight.|ret||ret||tab|

Two good reasons to spend money|ret||ret||tab|

1. Necessity To provide food, shelter, education, and other fundamentals for ourselves and our loved ones. This always gets our top priority.|ret||ret||tab|

2. Fun the things we purchase that give us enjoyment. This may include donating money to a favorite charity, jetting off to the islands, or just an evening out.|ret||ret||tab|

Two bad reasons to plunk down hard-earned cash|ret||ret||tab|

1, Boredom as in, "I think I'll go shopping." This reduces spending to a fairly expensive sport or hobby.|ret||ret||tab|

2. Indifference as in, "I have it, so I guess I'll spend it." This is also known as the "flush factor," because we tend to spend money more freely when we are flush.|ret||ret||tab|

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Set a goal|ret||ret||tab|

A smart money goal: seek to obtain maximum value for every cent spent whether it's a new car, a vacation, or even a candy bar. |ret||ret||tab|

Unfortunately, that can be more easily said than done. A key stumbling block is that value is a highly subjective commodity. |ret||ret||tab|

It's more than just a matter of getting what you pay for or getting the best price. For instance, some people might find a $50 jar of caviar well worth the cost; others might question $1.50 for a can of tuna. It's just a matter of taste.|ret||ret||tab|

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A way to measure value|ret||ret||tab|

There are several ways to measure value. The first method is highly personal. Take the following "value test" to see if you're getting full value for the money you spend:|ret||ret||tab|

1. Make a list of what you spent money on last week and record the price you paid for each item or service.|ret||ret||tab|

2. Circle items that you would willingly buy if you had the choice to go back and decide again. Ask yourself:,"Did I get my money's worth?"|ret||ret||tab|

3. Total up the money spent on the other items those that, in retrospect, you wouldn't have purchased. |ret||ret||tab|

That's how much value you lost last week.|ret||ret||tab|

4. Change your spending patterns, reducing money spent on low-value items or services in the future.|ret||ret||tab|

The payoff you will have more money for the things you really want and need.|ret||ret||tab|

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A second way to measure value|ret||ret||tab|

The second way to measure value is more objective; it's based on the way goods and services are sold. For instance, why will you pay $450 for a television at one retailer, but only $375 at another? Or face the dilemma of shelling out $2,500 per person for a winter vacation on one cruise line versus $1,700 on another?|ret||ret||tab|

The answer can be determined by a simple formula based on three factors: quality, price, and service. |ret||ret||tab|

The general rule is that you can definitely obtain one of these: either high quality, low cost, or excellent service. You can even receive two. |ret||ret||tab|

But you will almost never receive all three. In other words, you may have to sacrifice service if you want good quality at a low price, or expect to pay a higher price if you want top quality and service. While there will always be exceptions, this is still a good way to measure the value you're spending on goods and services.|ret||ret||tab|

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Take control|ret||ret||tab|

Apply this formula by deciding which factors are important to you. Keep in mind that they will vary depending on the item and your own personal situation. |ret||ret||tab|

Depending on your objectives and needs, you can control the quality and price of the goods and services you purchase, and get the best possible value for the money you spend.|ret||ret||tab|

|bold_on|(Buckley Van Hooser is an agent for New York Life Insurance Company and a registered representative for NYLIFE Securities Inc.)|bold_on||ret||ret||tab|

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