The secret to saving money is to learn how to trick your emotional, animal brain. Here are a few tips I use:
- Before you buy something you don’t need, make sure you want it three or more times. Back in college when I worked at the Eckerd’s one-hour photo lab, this guy came in to check out our selection of digital cameras. He really wanted to buy this particular Olympus camera, but then as he handed the camera back to me, he said he was going to take a walk around the block to think it over. This struck me as very sensible. Often when you want something, the feeling is temporary. Before you buy something extra, make sure it’s really something you want.
- At the grocery store, load up your cart with whatever you want. Then before you check out filter out any items you don’t really need. By the time you filter, the desire for many things will have passed and you can put back those cookies.
- Think yearly for any recurring monthly expenses. Let’s say you sign up for cable at roughly $100 a month. Instead of thinking of this as $100 a month, think of it as $1200 a year (100 x 12). If you cut off the cable, you give yourself a raise of $1200 a year. Do this calculation for any recurring expenses you are considering taking on. I created a spreadsheet listing any current recurring expenses like bills, bank charges, internet subscriptions, rent, etc. Then I created a section where I show what I could cut every expense down to if I needed to make drastic cuts in spending due to job loss or other catastrophes. Anything you spend automatically every month is considered your “nut”, the bare minimum of your expenses before discretionary spending. Try to keep this as low as possible and you’ll have more money to invest and save.
I caution you to realize that there are two camps with regard to your thought processes about money.
Yours is obviously spending side driven. Spend less through “puratanic” thinking. I agree with the discipline to some extent but with all one-sided though processes – there are pitfalls to your logic.
By only buying to satisfy extreme need, one does not contribute to the wheel of life, economic improvement and development of the marketplace.
More importantly, the act of minimizing “the nut” for some people tones down their ability and drive to be be productive in day to day life. It becomes too easy to not quantify true costs of time, material, payrolls etc. when one removes all or most of the economic pressure in life.
All greatness comes from need. Often times, the greater the need, the more dire the situation, the greater the event.