In this day and age, spending money like water often seems like part of the American way. Unfortunately, it’s this kind of frivolous spending that gets so many people deep in debt and cripples their ability to save money for their future security.
In order to combat the problem, it’s necessary to rethink the way you spend money. Here are some tips that can help you achieve this.
Question Your Urges
Each time you feel the urge to buy something unrelated to basic living expenses, take a few minutes to question that urge. Ask yourself, “do I really need this? Is it that important to me?”
Consider, for example, looking at a new TV as an upgrade for your current one. The screen is a few inches larger and the picture is slightly better, but is it really such a big deal that it warrants a significant expense?
Indeed, part of avoiding frivolous spending also means learning to be satisfied with what you already have.
Consider The Bigger Picture
Perhaps the greatest threat to a person’s financial security is all the small, frivolous purchases made throughout the month.
For instance, say you feel like buying a $7 coffee as a “little treat.” How many similar treats have you given yourself in the last month? How much money has that added up to? If you bought a coffee even once per week at that price, that’s over $30 after sales tax that you’ll never see again.
It’s nice, and arguably important, to treat yourself to something special occasionally. However, be careful that you’re not defining “occasionally” as “once a week or more.”
You should even consider the cost of those necessary items you buy. For instance, when you choose major brands of groceries over cheaper store brands of equal quality, you’re wasting a lot of money. Even if the price difference is only 25 or 50 cents, it adds up quickly.
Keep Your Goals In Mind
Almost everyone has something they need or want to save up for. Whether it’s a much-needed vacation or a savings safety net, without keeping that goal in mind, you may never reach it.
Every time you spend money, think about how it affects your goal. How far will it set you back? Is your immediate gratification more pressing than your long-term happiness?
Beware Of Suave Sales Tactics
Retailers employ a number of psychological tricks to encourage people to part with their money. Sales are just one of these tactics.
By offering items at a certain percentage off, they aim to lure you into buying items that you don’t really need, but you want them anyway just because they’re cheaper than usual. Retailers know that when people can get items at a discount, the purchase suddenly seems justified.
By understanding these tactics and being aware of them, you can more easily resist their dubious charms.
Disable The Enabler
Credit and debit cards are one of the greatest enablers of financial wastefulness in today’s economy. Your money is reduced to a number in a computer instead of something tangible, and it’s so easy to just swipe a card whenever you want to buy something.
This effectively removes most of the accountability that would normally come with spending money. Fortunately, there is an easy way to avoid it.
Start using good, old-fashioned cash. Take out a set amount each week for groceries, gas or other necessities and no more.
Because cash is physical and tangible, you can see it dwindling. This has the direct benefit of forcing you to think more about what you’re spending it on and encouraging you to cut back wherever possible.