One's life-style affects the way you make spending decisions. Depending upon one's family background, one may be conservative or liberal in one's attitude toward spending money. Conservative means being cautious, moderate, and tending to maintain existing or traditional views while liberal means being open-minded, receptive to new ideas, and generous A conservative person tends to reject risk while a liberal person will tend to follow new trends.

There is no right or wrong to view life-style. Each one single person of us holds life-style values according to his or her personal code. However, lifestyle decisions should be based upon an understanding of realistic limitations.

To illustrate this, one may have a strong desire to own an expensive car. There is totally nothing wrong with such a goal. However, if your income is limited, you may have to sacrifice too many other things to pay for the car. One's personal code, therefore, will help one to decide how much one is willing to give up for that single want. The decision-making process will help one to determine the consequences of such a purchase.

Individual purchasing decisions frequently are considered from a narrow viewpoint. There is a tendency to overlook or ignore the long-range results of a decision. The process methods will help one in taking a realistic look at potential consequences.

Developing good spending habits.

For one to be able to tackle spending decisions, one should be willing to approach them in an organized way. There are a number of spending habits you can develop to strengthen your decision-making efforts. This approach also will help you to avoid bad spending habits. Here are some of the ways one can use to develop good spending habits.

1. Separating Needs and Wants.

One should make sure that one’s needs are met first. Remember adequate food, shelter, and clothing are basic needs which are necessary for one’s survival. One also has other needs, such as transportation, health car, and recreation.
One can go beyond necessity in satisfying these needs.

At that point, one is dealing literally with wants. The question now is, how far does one want to go in exceeding their needs?

For example, consider one’s needs for shelter. Can one be satisfied with a modest but comfortable home in an average neighborhood? Or, does one desire a large luxurious home in an exclusive area? Either choice will definitely meet one’s needs for adequate shelter. One’s wants involve the level of satisfaction one desires.

Transportation is another area in which needs quickly change into wants. Say that one needs a reliable automobile to get to and from work each day. That being one’s need, they may decide that their car must have air conditioning, a stereo system, and other optional equipment.

These extras are wants and there is nothing wrong with deciding to purchase these extras. However, it is important to be able to identify needs and wants, and to be able to tell them apart.

2. Recognizing value.

One measure of a value of a value of a good or service is its price. Value also means quality, usefulness, and reliability. As a consumer, one should always measure the value of goods and services by combining these factors. The real value of a product lies in the combination of quality, usefulness, and reliability; rated against its price.

Appearance and style may be other important factors in determining value, depending upon one’s personal code. In many cases, attractiveness of a product is a starting point in evaluation. People often begin there and then to examine a product for quality, reliability, and other practical factors.

3. Comparison shopping.

Wise people compare items before the can make a decision to purchase them. Comparison shopping literally means to examine two or more alternative choices before deciding what to purchase. In many cases, price is the main factor in comparison shopping.

Price is always one’s main concern when deciding upon the item they want to buy. That type of comparison shopping involves obtaining the best deal from among the available sellers.

Other forms of comparison shopping one may want to consider deal with considerations such as quality, appearance, price value, and trade-in or resale value.

The extent of one’s efforts in comparison shopping depends upon the size and importance of the purchase. For example, you will probably spend more time shopping for a car than a pair of shoes. Your main goal is to obtain the best possible price on a product that promises the greatest satisfaction.

To illustrate this, consider shopping a video game. You are shown two video games that are roughly equal in operation. One of the games costs $50 less than the other. However, the less expensive product has a history of breakdown after a few months of use. The more expensive competitor is considered to be more reliable. One has to make a value judgment.

When one is trying to determine the value of a product, there may be several sources of worthwhile information. Owners or users of products can offer opinions based upon their experience.

Consumer advice on many kinds of product s is available from government agencies and from private organisations. There are also a number of consumer magazines that offer information on product quality.

4. Timing of Purchases.

When possible, plan to make major purchases at times when prices are favorable. The small appliance on display for $39.95 today may go on sale for $29.95 next week. Watch for sales. Many large companies have sales on certain products at regular times.

Some sales are scheduled around holidays and seasonal changes. Off-season prices are often lower. For example, winter goods may be less expensive during the summer, when demand is low. Demand is the amount of a product that consumers are willing to buy at a given time.

Some sales are held because the supply of an item is too high. Supply is the amount of a product that businesses are willing to sell at a given price.

Many consumer goods, such as cars, television sets, and major appliances, undergo model changes each year. When new models are introduced, the previous year’s models often are sold at greatly reduced prices. These sales usually are called clearance sales.

If price is one’s main consideration. then, clearance sales may be attractive. You have to decide which is more important: a reduced price or the features of the newer model.

5. Avoiding Impulse Buying.

A good rule for a one as a consumer is to buy with your head involved, not your heart. Impulse buying means making a purchase based on a sudden decision, or impulse. Buying on impulse frequently brings disappointing consequences. The weakness of impulse buying lies in the failure to evaluate alternatives or potential consequences. In other words, impulse buying is the opposite of making a decision using the process method.

Another weakness of impulse buying is that it usually involves a lack of product evaluation. An impulse purchase may b made on the basis of appearance or some other appeal that may be short-lived. It is usually fads who tend to promote impulse buying.

6. Reading Between the lines.

Simply look beneath the surface. Promotional material, whether a printed advertisement or a broadcast commercial, usually gives only positive information about a product. As a consumer. You have to use good judgment in evaluating advertising and sales promotions.

Probably the most overused words in advertising are “new” and ”improved.” New does not necessarily mean better and improved, as well, does not always mean better, either. Sometimes a product is changed in a way that may cause you to turn away from it. You may have preferred the product the way it was.

General claims of product value don’t mean much. However, specific claims usually can be proved or disapproved. Remember that the claim is only as good as the poof offered to back it.

Factors that influence Spending.

There are many factors that can influence one’s spending decision. Some of these factors that have a general effect on one’s values are;

1). Family.

Most of ones strongest feelings and opinions come from the influence of one’s parents and other family members.

2). Friends.

As one grows older, one’s friends tend to have a stronger influence on their preferences. One works harder to only to get the approval of friends. Generally, less effort is required to keep your family’s acceptance.

3). Advertising.

Promotion of goods and services can reach one from many sources. some of these major sources include: radio, television, newspapers, magazines, direct mail, and telephone sales.

4). Word of Mouth.

People who are especially happy with a product frequently tell others. People almost often boast about the bargains they obtain on particular goods or services. The more attractive it sounds, the more you may be motivated to seek the same or similar bargains.

A common thread runs through these motivating factors: Each has an effect upon one’s code of conduct. Some may reinforce, or strengthen, one's existing values. Others may change one’s opinions or preferences. One should be aware of these changes. Understanding why one’s code is being reinforced or changed helps one to evaluate one’s motives.