Spending money is a fact of life. In our virtual age, there are lots of ways that we can unload ourselves of expendable funds. The way we spend, whether using credit, cash or even rewards points, plays an intricate role in our individual financial planning.

Find out which mix of spending strategies works best for you to save money and increase your net worth. Be sure you “know yourself” well, because you’ll need to consider your own finances, lifestyle and attitude towards money.

Be sure you “know yourself” well, because you’ll need to consider your own finances, lifestyle and attitude towards money.

So get started now, and figure out which of these six different types of spending work for you.

  1. Cash-only Spender

A cash-only strategy involves using bills and coins instead of debit/credit cards to make daily purchases. When you actually watch your cash disappearing as you pay for goods and services, it’s easier to realise the tradeoff you’re making for each item you buy. This can help you be more mindful of your spending.

The cash-only strategy may be ideal if you are easily tempted to make impulsive purchases. People who regularly cut back on small indulgences in order to meet larger financial obligations like paying off education or housing loans can be more prone to impulsive spending.

  1. Envelope-method Spender

Similar to the cash-only strategy, the envelope strategy involves using bills and coins to pay for everything. However, this budgeting and spending strategy take things to the next level by dividing your expenses into clusters.

The idea is to withdraw a fixed amount of money from your bank account each month and put the cash into envelopes labelled with your expenditure categories like groceries, transportation, gifts and entertainment. Once you use up the cash in any given envelope, you cannot spend any more in that category.

In this age of online banking and mobile finance applications, the envelope strategy may seem quite old-fashioned. However, it can still be effective if you’re the type of person who needs a highly disciplined approach to spending. This tangible style of managing your money can also be useful if you are new to the process of budgeting.

Read: 6 Financial Planning Actions To Take Today

  1. Online Spender

In contrast to the envelope strategy, an online spending style utilises modern applications like internet banking and online shopping. The whole idea is to do your spending at online stores. Aside from online retail stores and blogshops, Money Smart Singapore suggests a couple of online grocery shopping options that can help you save both time and money.

To manage your finances even more conveniently, you can use internet banking to facilitate and track your spending. Today, many banks enable their customers to check account information, pay bills, transfer funds and explore other services and products online.

The online spending strategy may be beneficial if you have a hectic schedule and little time to go out and do your shopping at a brick and mortar retail store or grocery. This could be a practical solution for working students, busy parents, business owners and the like.

  1. Reward Points Spender

The reward points spending strategy takes advantage of various credit benefits such as cash-back, reward points and travel miles. By choosing your credit card provider carefully and consistently using that card to make most of your purchases, you might easily rack up enough points to pay for all or most of your next gadget or vacation.

This type of spending strategy can function well for you only if you already have an excellent credit history and/or no other debts. Reward yourself for the hard work you’ve put into reaching a glossy financial standing by reaping all the benefits that you can from that little plastic card.

  1. Needs-only Spender

A needs-only strategy allows spending for necessary items like food, transportation, rent and utilities only. By creating a list of your “needs” and “wants” you can automatically figure out what items you can and cannot spend on within this system.

This spending strategy can work well if you wish to quickly eliminate a debt. However, it is important to note that restraining yourself from spending on discretionary items can backfire. Allot a small percentage for you to spend on and have a discretionary account.

  1. Free Spender

A free-spending strategy requires automatically transferring an allotment to a savings plan, contributing to your retirement fund, emergency fund and investment accounts, and paying all of your recurring bills every month. Any additional expenditures can only be made after those “musts” are taken care of.

By covering all your financial obligations at month’s start, you can freely spend your money the rest of the month. After all the big deductions are made, you don’t have to be too concerned about those smaller daily purchases.

This type of spending strategy can function smoothly for responsible payers as well as conservative spenders who are capable of diligently saving, investing and paying for all their regularly occurring obligations. To successfully pull off this spending strategy, it’s important to be disciplined and committed enough to pay attention to covering the important things first.

10 Steps to Develop a Healthy Relationship with Money

Recommend0 recommendationsPublished in Budgeting
Previous articleBest Mobile Payment Methods in Singapore
Next articleFive Money-Saving Tips For Preparing For Your Baby
Founder @ The New Savvy
Anna Haotanto is the Advisor (former CEO) of The New Savvy. She is currently the COO of ABZD Capital and the CMO of Gourmet Food Holdings, an investment firm focusing on opportunities in the global F&B industry. She is part of the founding committee of the Singapore FinTech Association and heads the Women In FinTech and Partnership Committee. Anna is the President of the Singapore Management University Women Alumni. Anna invests and sits on the board of a few startups. Anna is also part of the Singapore Chinese Chamber of Commerce & Industry Career Women’s Group executive committee. Anna’s story is featured on Millionaire Minds on Channel NewsAsia. She hosts TV shows and events, namely for Channel NewsAsia’s “The Millennial Investor” and “Challenge Tomorrow”, a FinTech documentary. Anna was awarded “Her Times Youth Award” at the Rising50 Women Empowerment Gala, organised by the Indonesian Embassy of Singapore. The award was presented by His Excellency Ngurah Swajaya. She was also awarded Founder of the Year for ASEAN Rice Bowl Startup Awards. She was also awarded the Women Empowerment Award by the Asian Business & Social Forum. Anna has been awarded LinkedIn Power Profiles for founders (2018, 2017), Tatler Gen T, The Peak’s Trailblazers under 40 and a nominee for the Women of The Future award by Aviva


  1. Nice post. I was checking continuously this blog and I am impressed!
    Extremely helpful information particularly the last part 🙂 I care for such information a lot.
    I was looking for this particular info for a very long time.

    Thank you and best of luck.


Please enter your comment!
Please enter your name here