The most basic principle of getting in financial shape is to save more and spend less. Every dollar you don’t spend on something frivolous is one you can save for something important. Unfortunately, while this is easy to discuss, it’s a lot harder to live out in practice.
We’ve recently talked about ways you could be wasting money without realizing it. Let’s continue this conversation and review some simple ways that you can stop wasting money. Whether in the form of mindsets or software, implementing these little tricks will help you keep more cash in your pocket.
1. Have a Price in Mind for Purchases
It’s a basic fact that a sale is made when a buyer and a seller agree on a price for a trade. If Apple is selling a MacBook for $1,500 and you think that’s a fair price, you’re willing to trade for it. Conversely, if a store wants to sell a pack of pencils for $100, they’re probably going to have trouble finding a sale.
Use this to your mental advantage. Take a minute to think about the price you’d be willing to pay for an item before you see how much it costs. If you walk into the store knowing you need a new sweater and can pay $30, don’t buy anything over that price, because it’s not worth it! You can look elsewhere to find a seller that meets your preference. That one minute could save you quite a bit of money.
2. Delay Purchases to Prevent Emotional Buying
Humans are really great at talking themselves into actions, which can lead to problems. Vendors have capitalized on this trait — how many times a day do you see panic-inducing phrases such as “One-day sale!”, “Only ten left!”, or “Pre-order now!”? It’s easy to get sucked into a purchase before you even realize what you’re doing.
Just learning to delay and avoid impulse purchases can cut your spending in half. Defer your consumption to build wealth.
— Wilson Rogers (@Wilson_Rogers) October 14, 2016
You can combat this by forcing yourself to delay all purchases by a set amount of time. See a hot deal online or in store that gets you excited? Close your computer (or go elsewhere in the store) and go do something else for a while. Even five minutes can be enough to help you think more rationally. After the emotion goes away, think about how good the price actually is. If it still seems like a logical purchase, you’re probably safe buying it.
3. Learn Some Basic Repair Skills
This one might not apply to everyone, but depending on what you often purchase, you can save a lot of money by picking up some basic fix-it skills. If your kids often tear holes in their jeans, learn to sew and save a ton of money on new pants. Spend a few minutes on YouTube to learn basic car maintenance and you’ll save a fortune on taking it to a mechanic.
Of course, if you have to spend an exorbitant amount of time to learn the skill, it’s probably not worth your time if the replacement cost is small. But for minor breakages, a bit of love can keep items that you already own functioning just fine.
4. Take the Time to Make a Grocery List
Technology can help you save a lot of cash on groceries, but a good old-fashioned grocery list still has its place, too. Wandering into the grocery store without a plan is a recipe for a lot of wasted money. You could wind up buying stuff you don’t need, since supermarkets are known for using tactics to tempt you to buy more.
Spending the five minutes to make a pen-and-paper list (or a list using an app!) will cut down on wasted time and money in the supermarket. Stick to items you need at that time, and you’ll come out better for it.
5. Limit the Spending Tools in Your Pocket
You can know all the mental tricks, but if you have the ability to spend money, you eventually will. Thus, it’s a smart idea to limit your access to payment methods when you go somewhere with a high spending potential. Take a couple minutes to prepare yourself before you go.
Okay, my credit card is leaving my wallet for some time. Out of sight, out of mind. ?
— Shanay J. Campbell (@sayitaintNay) October 31, 2016
When you go to the mall, only take enough cash to buy what you’ve budgeted for and expect to buy. Leave the credit cards at home unless you’ve specifically planned to use them. To remove all options, make sure to remove your credit cards from Android/Apple Pay on your phone so you don’t cheat by paying with your mobile.
6. Keep Your Savings Goals in Mind
Most people have trouble starting to save money. Putting away money that you could be spending now feels like you’re depriving yourself. By rearranging your thinking, you can stop thinking of that money as “lost.”
When you go out to eat and have to decide between ordering water and a drink for $2, think about what you’re saving towards. That $2 could go into your vacation fund, or towards buying a new 4K TV, or whatever else you’re saving for. Just a few seconds spent thinking about your goals regularly will help you stay excited about saving.
7. Review and Reward Your Savings
Continuing on the last point, it’s important to keep up with your savings and reward yourself as you progress. Schedule some time, perhaps once every two weeks or once a month, to check your savings and set mini-goals for yourself. If you’re trying to save $1,000 for a trip, treat yourself to a movie at the $250, $500, and $750 milestones, for example.
My savings account hit a milestone today ???
— Josh ? (@JoshIsTooCute) October 27, 2016
Obviously, you don’t want to make the celebration too expensive, as this will cut into your goals. Done in moderation, though, being more active with your savings is a great way to make them come alive and keep you motivated.
8. Stay Accountable With a Friend
Accountability partners can help with a lot of struggles. If you’re trying to stop smoking, it’s a lot harder to sneak a cigarette when you know that you’ll be asked about it the next day. The same principle applies to spending money, and you can use it to your advantage.
Team up with a friend who’s also trying to save money, and chat for five minutes once or twice a week about your major purchases. To keep this brief, you can skip unavoidable expenses like gas and rent. Focus on non-essential purchases, whether they be a $5 coffee treat or a $700 TV.
To take it further, have each person share the purchases they plan to make before the next meeting. Reviewing the planned and actual money spent is a great way to stay accountable.
9. Block Shopping Websites
Just like leaving your credit card at home prevents overspending in a store, if you can’t get on eBay or Amazon, you won’t spend money there, either. We’ve discussed how to block time-wasting websites like Facebook, and you can apply those same tips to blocking any website where you’re likely to waste money.
Have a set time for shopping on websites, but only allow yourself to do so once you’ve adequately prepared — and try to keep time spent there to a minimum. Only unblock the sites and make purchases when you’re ready. Otherwise, keep them blocked to avoid temptation.
10. Don’t Let Sites Save Your Payment Info
Convenience makes it easier to spend. Amazon is infamous for this. From its One-Click ordering to Dash Buttons (which can be hacked to do all sorts of cool stuff) Amazon wants to take your money with as few clicks as possible.
Websites that save my credit card information cost me a lot of money; Looking at you Amazon and Cabelas…
— Chris Matthees (@cdmatthees) June 3, 2016
You can fight back against this by taking a minute to remove your credit card details from websites. Force them to ask you for the details every time you make a purchase. Believe it or not, the extra step of having to walk into another room and break out your card might be enough to change your mind about buying.
As a bonus, this can help protect you from credit card fraud online.
What 5-Minute Tips Do You Have?
Saving money doesn’t always require hours of laborious calculation. Sometimes it’s just a matter of changing your mindset or setting yourself up for success. By implementing one or all of these tips, you’ll be on a good path to keeping more of your money and wasting less.
If you find most of your money going towards technology purchases, find out how you can still enjoy awesome tech without breaking the bank.
Now I want to hear from you. What quick tips or mental hacks do you use to cut down on extra spending? Add to the list in the comments and let’s discuss!