You’ll never save if you don’t change your bad habits
There are very few people in the world who find it easy to save money. Others find it a bit of work, but they attempt to do so. But I think most people don’t know the word saving.
This is because we live immersed in a spending culture. Fashion and trends command they dictate what we should buy, even if it is not useful in our life.
We get carried away by advertising, and as the days go by, our fortnight suffers a severe blow.
For this reason, in order to save, you must change the way you spend. The point of saving is not only saving money but learning how to spend it.
To increase your savings, the formula is easy: you have to earn more or live with less. I think the best is to practice both.
But as in principle, earning more is sometimes a more complicated path. In addition, when people earn more money and don’t have the proper education, they cannot save either, because they automatically spend more.
As Kiyosaki said in his book Guide to Investing, many people never save even if their income increases because they immediately raise their spending level to match their income level.
If you do not learn to save with little, you will not do it with more.
For this reason, I believe that a fundamental financial habit is to learn to live with less, to learn not to need so many things, and to learn to stop spending on unnecessary things.
In this article, I’m going to teach you how you can stop spending money on unnecessary things.
1. Plan your expenses outside your budget
This is the most effective way to control your expenses and avoid unnecessary purchases.
People believe that planning your expenses is just making a monthly budget, but even this is the principal thing, it goes beyond that.
For example, I plan my personal extra expenses. Every month I write on a list what things I need outside of my fixed budget, and instead of buying it when I think I need it, I try to leave it on the list for at least 15 days.
This will help me know if it is really necessary. If after those days I still need it, then I buy it.
Most of the things we think we need to buy immediatly aren’t really necessary.
We all recognize when we are buying something on impulse because we look for reasons that justify its acquisition.
You can avoid this impulse if you leave the environment of the object and focus your attention on other things. For example, if you are in a mall, leave the store, go around and look at other things.
It is very likely that you no longer remember to go back to the initial store to buy it.
The reason is very simple: when you have to go back to the store to buy the object, other factors such as time or the need to travel come into play and put the genuine need for the purchase in perspective.
The expense list also helps me know what my needs are for that month and what to focus on. For example, sometimes I go to the store and think, “I would like to buy a new dress,” but is it really necessary and important now? What would things on that list be better than that dress?
Also, It is proven that the more you go to the supermarket, the more you spend. Therefore, I try to go to the supermarket only once. Going with a list of what you need for the month helps you focus on what you really need and avoid buying too much.
2. Compare the value of something with work
This is a super-effective way to avoid spending money on stupid things.
Let’s say you want to buy a giant stuffed animal for your living room, which costs $500. You earn $20 an hour, so you would have to work 25 hours to buy the bear.
Would that bear purchase worth 25 hours of your life?
Starting to measure what you buy according to the hours you will have to work to achieve it is a tool that works for two reasons:
- The first reason is that it prevents you from making impulsive decisions. Instead of buying what you want directly, you will have to stop for a few seconds to think about how many hours of work the mobile phone or television you want costs you.
Even if you have to take out your phone to use the calculator, those seconds will slow down your consumer craving.
- The second reason is that knowing how many hours of work it takes to buy something will help you better identify your priorities. You are going to have a more realistic perspective of what things cost you and what you must “suffer” to achieve them.
Think about the last 5 purchases you have made and calculate the hours of work that you dedicated to getting them. Were they worth it?
3. Use your credit cards only for fixed payments
Research has shown that people are willing to spend 83% more when paying with a credit card instead of cash.
This happens because we do not feel the pain that we are giving something in return for the purchases we make with them, like if we are receiving things free, contrary to when we make a purchase with cash.
But using credit cards is important for our credit, and they give us a lot of benefits. For this reason, we cannot simply stop using them.
Something that helps a lot not to have to abandon them and not feel guilty using them is when we make our fixed payments with it. Treat your credit cards like money you can use to pay your bills, not to buy things you can’t afford.
If you can’t pay cash for an item, you can’t afford it. Don’t let monthly payments become a way of life for you.
Use your cards only for the payments that you have monthly. In this way, you can receive the benefits of a credit card while you do not spend extra to use it.
Also, this will help you keep it clean every month since you will only use it for payments you know you can cover.
I only use the credit card to pay for gas, monthly gym payments, and household services. I know exactly how much I have to pay monthly for it, and I receive loyalty points.
4. Prioritize your purchases
Don’t be fooled by shopping.
Sellers are looking for a way to make their customers love their shelves on sale. For that reason, they have a lot of strategies that you should avoid.
It’s important that you resist the urge to justify a purchase just because it’s on sale because even big discounts can mean big expenses. Although the offer is extraordinary, it is not worth buying something you do not need.
There are only two things to consider when shopping:
-Do I need this?
-Is it within my budget?
In the list that I make monthly of what I want to buy, I always put the items in order of importance. In this way, I do not spend more later on things that I will need at the moment for buying things that I don’t really need.
The benefits that I got by prioritizing my purchases are:
- I don’t have to go to the mall often because I know what I need before the month starts.
- I don’t buy unnecessary things when I can buy things that will be useful to me in that month.
- I feel like I reward myself when I buy something I wanted, and I can afford it.
- I don’t have to use loans or a credit card because I run “out of money” if an emergency happens or I need something important.
5. Save your receipts
This is a good way to keep track of how much you spend on everything.
Instead of throwing away your receipts, save them so you can record exactly how much money you spend on an item or food. This way, if you end up spending more than you should in a month, you will know exactly when and where you spent that money.
If you don’t want to save a lot of paper every month, you can use an app to track all your expenses. There are a lot of apps for your phone and web that allow you to save all your information and track your budget, for example:
- Mobills: This app is a budget planner. You can control your incomes, expenses, and receipts. It also has credit card control, where you can track your limit, invoice amount, and the payday.
- YNAB: It’s an app to control your payments. You can categorize your money and have different accounts for all your expenses.
- Excel or Google sheet: If you want to keep it simple, you can use a Spreadsheet. This is a basic way to track all your expenses and personalize them in the most comfortable way for you.
Having control of your expenses will help you understand what you are spending more on, what your priorities are, and what you can eliminate.
6. Adjust your spending habits
Think of all the hobbies, activities, or items that you spend money on every month. Maybe you’re addicted to shoes, maybe you love eating out, or maybe you can’t stop subscribing to beauty magazines.
Enjoying material things is fine, as long as you can afford them.
Make a list of activities or items that you like to spend money on each month. Treat them as discretionary expenses every month. Then ask yourself: am I spending too much money on these discretionary expenses?
Unlike fixed expenses like rent, utilities, and other payments, which are always the same every month, discretionary expenses are not essential and are easier to cut.
These expenses are important to feel like you are working for a purpose, but an excess of them can be a failure for your finances.
7. Avoid temptations
If you feel that whenever you go out, you are going to spend money, then start looking for ways to control yourself. For example, if every time you go out, you must buy street food, start eating before going out.
Leave your credit cards at home. Only take the cash you need, according to your budget, that you need during the week. That way, you will avoid making unnecessary purchases if you have already used up all your cash.
Understand the characteristics of compulsive shopping. Compulsive shoppers often cannot control their spending habits and become emotional shoppers.
They buy until they drop and then keep buying. But compulsive shopping and spending often make people feel worse about themselves, so try to understand why you have that impulse in order to control it.
Unsubscribe from emails from stores or promotional websites. Although they are very useful to find good prices when you need something, they are a sea of temptations when you don’t need it.
If every time you enter amazon to “look,” you fill your cart, then try to enter that page only once a month and only when you have money that you can use there.
Many times, in order to buy what we want so much, we use the phrase: “I deserve it because I work very hard.” But we all work very hard.
In fact, there are people who try harder than you. So we need to stop using excuses to make irresponsible purchases and start thinking about our financial well-being.
Buying things is fine, as long as they are necessary for our lives and we can afford them at that time. Buying things just because “we want to buy” does us no good, so we must change our habits if we want to save.
Remember that being rich begins in the mind. And if you cannot control yourself with little, with much neither. If you want to have money, you must start changing now.