5 Key Signs You’re a Smart Spender

You may think you’re a smart spender, but how do you know for sure? Since you work hard for your money, you should want to make the most of each paycheck.

The average American household earns $87,432 per year before taxes, and has average annual expenditures of $66,928, according to the Bureau of Labor Statistics. This doesn’t leave a lot for savings, so if these numbers sound familiar, it’s possible you’re trying to see if your spending strategy needs improvement.

Either way, it can be hard to recognize issues with your spending. You might think you have a pretty firm grasp on your money, but in reality, at least a few changes could be made.

Ready to find out if your spending strategy is as sharp as you think it is? GOBankingRates spoke with two financial experts who shared five signs your spending strategy is truly on point.

Are you able to manage your daily spending and avoid getting into credit card debt? If so, consumer and money-saving expert Andrea Woroch said you’re doing something very right.

“Paying off your balance in full each month is a clear sign you’re a smart shopper and don’t indulge in repeat impulse purchases or buy things you can’t afford,” she said. “Not to mention, this also ensures you don’t waste money on interest fees.”

Retailers are notorious for using sale tactics to get people to buy things they don’t need by attaching a sense of urgency to the purchase, Woroch said. If you’re able to spot this and avoid falling victim to it, give yourself a pat on the back.

“Smart shoppers also manage deal temptations by unsubscribing from store newsletters and turning off push notifications on store apps,” she said. “They only use tech to comparison shop and search for coupons when they need them.”

Clutter doesn’t typically arrive at your doorstep — it gradually comes home in shopping bags. If you don’t feel the need to constantly purge items in your home, Woroch said you’re a smart spender who doesn’t tend to purchase things you already own.

“Instead, you focus on needs to avoid wasting money on wants that clutter your house,” she said. “Opting for quality also ensures you don’t have to replace items as frequently, which makes your money go further.”

Smart spenders don’t just keep a careful watch on their money — they’re also savvy about how they’re paying for purchases. Anthony De Filippis, director at tax accounting firm Amplify 11, said you can feel confident you’re making the most of your financial situation if you’re earning credit card points.

“[Use] credit cards wisely by maximizing rewards and paying off balances in full each month to avoid interest charges,” he said. Depending on the credit card(s) you use, this can allow you to earn hotel rewards, airline miles, cash back and more.

It’s not uncommon for people to work their emotions out with a shopping trip. This can be anything from a celebratory purchase at the mall to an online shopping spree after a bad day at work. But this can be detrimental to your finances.

“Smart spenders recognize the dangers of emotional spending and resist the urge to shop for instant gratification,” De Filippis said. If you’re able to avoid this temptation, your wallet is definitely thanking you.