Friends, hello everyone! Julia Kel is in touch. Are your finances always under control? Often people spend their entire salary on various nonsense and live until the end of the month in super-economy mode. This is exactly the problem we will solve today. In this article we will talk about how to stop wasting money. You will learn the main rules of saving.
Reading the article will help you from now on make only necessary purchases with the greatest possible benefit. And you will save the remaining funds for something more important.
FULL LIST OF BAD HABITS
Find out the reason for your expenses
In many cases, spending money is associated with emotional and psychological triggers. If you get rid of them, you will eliminate the temptation and possibility of overspending.
- Time of day. If you notice that you have more energy at certain times of the day, go shopping at a time when you are not stressed. You'll make smarter choices and think about purchases more rationally if you're relaxed.
- Wednesday. There are certain places where you want to spend money. For example, fairs, shopping centers and so on. Avoid such places or take little money with you.
- Mood. If you're upset or worried, you go to the mall or visit your favorite online store, it's better to choose a gym or park instead. Go for a walk or do some exercise to lift your mood.
- Peer pressure. If you can't afford to eat, shop, and relax like your friends do, it's okay to decline their invitations. Instead, offer them something that won't cost you a lot of money. It's important to surround yourself with friends who will support you as you work towards your financial goals.
- Lifestyle. If you've become accustomed to a certain lifestyle, it can be difficult to give it up when you face financial difficulties. Your upbringing also influences your lifestyle. If you grew up in a family where money was always tight, you may feel the urge to overspend to make up for everything you missed out on as a child. Likewise, if you grew up where money wasn't an issue, you may feel forced to spend money you don't have to maintain the lifestyle you've become accustomed to.
Why do we do this
There are internal and external causes of shopaholism.
Internal causes of shopaholism
Internal ones are associated with psychological problems. Psychologists believe that women are more susceptible to shopaholism than men. It develops in them due to loneliness, with a lack of attention, care and love, during a period of depression. Shopping can be called a good antidepressant, since during shopping there is a release of the “happiness hormone” serotonin and adrenaline, which is produced under stress. But making a purchase decision and further possible disappointment in it is microstress. Thus, going to the store is one of the ways to cheer yourself up.
In addition, shopping increases self-esteem, gives a feeling of freedom and self-worth: if we can afford to buy this or that thing, then we have power. This feeling is enhanced by the attention and respectful attitude of the sellers, especially if services are added to the service: coffee, beautiful branded bags, etc.
External causes of shopaholism
External reasons reinforce internal ones. It is difficult for a person who is prone to excessive spending to resist advertising tricks and traps like: “only today there is a 70% discount on all our products,” or “two things for the price of one,” etc.
Track your expenses
The smallest purchases can add up and by the end of the month you could be left with a dwindling bank account and serious guilt. Tracking your expenses is key to successful budgeting because it keeps you accountable for every dollar you spend. Once you know where your money is going, you can make smart spending choices and identify areas you can cut back on.
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Many consumers are starting to track big expenses, but it's also important to pay attention to small daily purchases. Morning coffee, lunches and other expenses can affect your budget.
Filter subscriptions
Sometimes it’s a good idea to check if there are any subscriptions that you should get rid of. The following may be unnecessary:
- cable television, if no one watches TV anyway;
- magazines and newspapers, if they do not have time to be read;
- recently found paid accounts and applications;
- subscriptions that have lost their profitability;
- subscriptions that can be replaced with free ones.
This way, extra money will be saved.
Pay in cash
It is more convenient to use a credit card to pay for a purchase rather than counting bills, but this convenience is one of the reasons for excessive overspending. With cash, you physically see how much you have and how your funds decrease with each purchase. By paying only cash, you can force yourself to spend only what you have.
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Little tricks
Don't think that brands are the only worthy products. There are manufacturers that have not become brands, who are no worse and at the same time sell their products cheaper.
If you want to buy something expensive at a pharmacy, it’s a good idea to find out if there is a cheaper drug containing the same substance. In a word, not all worthy manufacturers decide to advertise. Maybe their budget doesn’t allow it yet, but we know that advertising is expensive.
ATMs of third-party banks charge fees for services. We shouldn’t forget about this.
On a note! When participating in sales, you should look for discounts and take advantage of only significant ones. If one person buys 1+1=3 things, then there will be two extra things.
You should only buy energy-efficient electrical appliances. Even if they cost more, it will save money. If you have a car, you need to pump up the tires on time.
If you only need to use devices like a sewing machine or chainsaw once a year, it's best to simply borrow them from someone you know.
Set short-term financial goals
Setting some achievable short-term financial goals is a great way to stay motivated. This will help you change your spending habits. Having these goals will constantly remind you of the reasons why you are cutting back and making sacrifices.
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But it's important that your goals are specific. A general goal like “lower food costs” won’t help. Quantitative goals such as “I will reduce my food expenses from 6 thousand per month to 3 thousand” give you direction to achieve the goal.
Some short term goals to help you:
- save 10% of every salary;
- bring lunch to work every day for a month instead of eating at cafes or vending machines.
No matter what your goals are, it's important to post them somewhere as a reminder of what you need to strive for.
A small life hack
If you see something interesting in the window and urgently want to buy it, but your inner voice quietly whispers “Wait, we don’t need this,” you can do the following:
- Go to a cafe and eat something sweet. Order coffee, cake, sit and have a snack. The amount of sugar in your blood will increase, and your brain may work better.
The scientific connection between the amount of sugar and active brain function is still not proven, but it helps me.
- Look through online reviews about your future purchase. Pay special attention to criticism and negative points. This helps to remove the “halo” and focus on the shortcomings.
- Check prices in other stores and online. If you can find it cheaper, it's better to save money.
After 30 - 40 minutes you will understand that you don’t really want to buy this product, and in general, you need the money for something else. But if this does not help, and there remains a strong desire to “buy here and now,” then you will have to spend money.
It’s also very cool to buy gifts for your loved ones. If you have an indefinable desire to buy something, then it is better to “buy as a gift.”
Find out how to save money
Not having a spending plan may be the reason why many people can't stop spending money. If you don't know how much you get each month and how your expenses add up, you'll continue to buy what you think you can afford. To solve this problem, it is important that you learn to save.
Start by adding up all your income sources, then count all your fixed expenses, such as car payments, rent, debt payments, etc. Since these numbers are fixed, they are easier to break even. Then list variable expenses such as groceries, gas and entertainment. If you spend more than you earn, you will have to cut back.
Impulse purchases
For many people who want to live “to the fullest”, it is very difficult to follow plans. Even a shopping plan causes negative emotions.
“Should I limit myself in some way? Can't buy something over the shopping list? No, I don’t want that.”
At one time I thought so too, until I came across a book on time management, which said something like the following:
The better you follow your daily plan, the more time you have for creativity and idleness.
If you translate everything into your spending, it will be something like this: the less you spend on unnecessary things, the more money remains for impulsive and joyful purchases. Only taking into account the fact that you really need it and you won’t blame yourself later for wasting money again.
You can and should spend money on good clothes, delicious food, and entertainment. These are positive emotions. Only this should be your conscious decision, and not imposed by your habits.
Eat at home
Open the refrigerator, there are a lot of delicious and healthy foods that you can prepare. And in the supermarket there are not only ready-made semi-finished products and lunches, but also high-quality products that will make a delicious home-made lunch and dinner.
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Look around the shelves of the cabinets, there are still plenty of cereals, pasta, spices - everything that is useful for preparing many dishes. In order not to spend too much, you should not go to stores hungry and be sure to inspect the shelves of the refrigerator and cabinets before each grocery trip.
Advice! You should only go to the store when there is no food in the house - this is a great way to spend less. And don't forget about the grocery list.
We reduce the cost of communication services
Choose the optimal Internet tariff. To use the Internet normally, you do not need an Internet package with the highest possible speed. Check with your provider to see if cable or digital television is included in your tariff plan.
Also check your mobile phone tariff. It often turns out that unnecessary services are activated, debiting small amounts from the account every day. Make sure there are no paid subscriptions on the number. There may be a plan that better suits your needs.
Reducing spending on clothes
- Careful fitting
. When choosing clothes, always try them on carefully and carefully examine the item you like in the mirror. It is better not to purchase an item immediately after trying it on, but to give yourself 1 day to think about it. If the next day you are still confident that you need the item, go to the store. - Buying out of season
. It is recommended to purchase summer clothes in the fall, and winter and autumn clothes in early spring. Items that are out of season are always sold at maximum discounts. - Loyalty programs
. Become a regular customer in a large retail chain offering a wide range of clothing. By using a discount card, tracking various bonuses and promotions, you can spend significantly less money on clothes, while wearing good things.
Don't buy - rent
You don't always need to buy expensive items; you can rent them. This is convenient if you have financial restrictions or a one-time need for a special device. For example, large or expensive garden tools, suitcases, photographic equipment - take them from friends, chip in and buy them together, rent them - this is much more profitable than investing a huge amount in a product and then using the item once a season. And, by the way, if this happens, do not hesitate to offer the lawn mower for rent - the neighbors will be happy to spend less, and you will gradually “recoup” the investment.
Learning to spend less: preparation
Before we look in detail at how to spend less in each of the main categories, we need to do a little preparation, consisting of the first 3 steps:
Start planning your budget
Most people make small expenses without giving them any importance and without thinking about how much of their monthly budget is spent in this way. And they attribute the resulting lack of financial resources to insufficient income. Meanwhile, when you start planning your budget, you will see how much money this or that purchase “absorbs” every month. Thanks to this, it is possible to save a significant amount of money by giving up unnecessary little things.
You should not think that financial planning in order to spend less money is the lot of low-income families. For example, in the USA, all people interested in personal growth pay attention to this. Recognized expert in this field, Charles Scott, says that he himself was shocked by the number of unnecessary expenses when he first started planning a family budget. He admits that even today he is prone to spontaneous purchases. But planning helps him spend less, avoiding thoughtless and irrational purchases.
Avoid loans
When buying expensive equipment on credit, you inevitably overpay. By the time the debt is finally repaid, the overpayment may reach 20-30%, and the purchased model will already be outdated. A rational approach is to save the necessary amount and make a purchase without a loan. As a nice bonus, you will be able to afford a more expensive and modern model.
If a loan is really necessary, it is better to take it from a modest bank that is not advertised through all channels. This will allow you to avoid extortionate interest rates and get by with minimal overpayments. Also carefully study how the interest rate depends on the total loan term. It is recommended to choose offers with longer installments - it is easier to pay the full amount in 2 years than in 6 months.
Learn to save
A great way to spend less money is to immediately save 10-20% of each income. By leaving 80% of your salary for monthly expenses, you will spend money more economically. And at the same time, you will accumulate money for a truly valuable purchase. If you are not sure that you can restrain yourself and not spend the “fund,” it is better to open a special deposit account in a bank. This will allow you to receive additional interest, increasing the savings. By the way, a lot of interesting information about savings can be found in our popular article: how to save a million.
We move on to the next stage - reducing costs in each category.
This stage involves competent planning of expenses for food, purchasing clothes, paying for housing and communal services, communications, transport and other services. Each of the following points should be taken as responsibly as possible. So, the following 7 steps await us:
