One of the reasons I found it so easy to keep my spending under control is that I used tricks to keep myself in line, instead of trying to “should” myself. Whenever I try to tell myself that I “should” do something, it works for a short time. Then I get tired, rebel like an angsty teenager, and often I undo all my positive progress! This all seems like a terrible waste of time and energy.
So I like tricks better. Here are five tricks to help you not waste money:
Number 1: Always think in terms of time spent, not money spent.
This one is especially good if you are an hourly wage-earner and you don’t make a ton of money per hour. Back when I lived on minimum wage, which was lower then in Seattle than it is now, I never let myself think in terms of how many dollars something cost. Instead, I thought of it in terms of hours.
So if I was making 10 dollars an hour, and something cost 40 dollars, I would always tell myself that it cost four hours. If it was worth four hours of my life, I bought it and was always happy that I had. But usually, it wasn’t worth it. I made much better spending decisions as a result of thinking in terms of time, not money.
Number 2: Remind yourself of long term satisfaction.
So let’s say you find yourself spending your grocery money on frivolous things. Try telling yourself that the long term satisfaction of having groceries is better then the instant gratification of buying something goofy.
What I always did was remind myself of the comfort and security that comes with having savings in the bank. When I have months worth of living expenses saved up, it means I don’t have to worry about overdraft fees. I don’t have to worry about a sudden job loss. I don’t have to stress about whether I’ll have enough to make rent. I can afford a dentist appointment if I chip a tooth.
Those are the sorts of things I remind myself of when I think about wasting money.
Number 3: Just track your spending habits.
I remember when I decided to look up my accounts, go through my records, and find out exactly what I really spent in a month. And I was like…”wow. I spend A LOT of money in restaurants…”
Just visually seeing what I spent my money on had an effect on me. I didn’t blame myself for anything and I didn’t complain. I just looked at it. That was enough.
Number 4: Set powerful goals.
This one is a little bit complex, but it really works for some people.
The idea is to focus on something you would buy, like a great vacation or a really valuable item that would actually improve your day-to-day life. Something inspiring.
Set a goal to save for it, even if it seems pretty far out of reach. Every time you get the urge to buy something foolish, put a third of the cost of the purchase into your savings fund. Use the rest of the money for living expenses.
Don’t touch the savings for anything other than emergencies until you have double the cost of the inspiration you are saving for.
The point of this trick is to turn savings into something that actually motivates you, instead of being a punishment. I will admit I never used this trick, but it works for many people. So I recommend it.
Number 5: Indulge in the addiction without actually buying anything.
This last trick is something I do with houses. I go online to Redfin and I look at all these gorgeous houses I might want to buy. I star them, favorite them, whatever. I consider how much the house may go up or down in the next few years. I figure out a negotiating strategy to convince the seller to lower their price. I try to figure out how I would finance the house. I think about how much I would have to save, and how stressful the debt load would be.
And then I close the site.
For me, I’ve found this to be incredibly helpful because the closer I get to thinking about whether it would really be worth it to purchase a new house, the more clear it is that it wouldn’t be a big enough improvement. But this process of online “shopping” helps me not waste money in the real world, since a big part of the fun of spending money is in the speculating, comparing and fantasizing.
I’ve got lots of friends who deal with their clothes-buying addiction this way. They put every little thing that they might even kinda sorta want into their online cart. They look at it all and admire it. And then they eventually just exit the page.
If you do this often enough you might even eventually get bored of your spending addiction, which is a great way to end any addiction.
So there you go. Five tricks to help you stop wasting money.