We only start saving when we develop a mindset shift towards healthy money habits. But no matter where you on your journey towards financial freedom you can always start saving. That is because it often acknowledges as the first towards building financial wealth. Nonetheless, one way to save money now is a simple trick I learned ten years ago from a financial advisor. Basically, you need to do arbitrage between your impulse and your needs. Consequently, it requires you to always balance between what is important vs what is necessary. Indeed, the psychology aspect of money discipline plays a very important role in your ability to better manage the money you have.
How To Save Money: Psychology aspect
In today’s era, there is a lot of distractions, attractions, and temptations. For instance, new gadgets, products, and brands are popping up practically every second. In addition, marketing agencies are more aggressive than ever pushing content across multiple platforms both online and offline. Thus, we are hammered throughout the day with ads. Yet, even when we manage to escape media coverage, we have to face society and the pressure that comes with it. It is often a lost cause if we don’t have a strong mindset. One simple way to avoid being trapped is to always to take 5 seconds to ask a simple question :
Is this purchase important or it is necessary?
If the answer is IMPORTANT then don’t buy, if the purchase is NECESSARY then go for it. By sticking to what is necessary, we avoid making emotional, impulsive, and society-oriented purchases. Certainly, this method would help you master the art of avoiding instant gratification which is one of the most important rules of personal finance.
Nevertheless, here are common ways things we can do that can save us some money:
6 effective tips
1. Your daily budget/period
Budgeting is the first start. It clarifies your money habit. But, I recommend setting up a daily budget then you break it down at a granular level per period (morning, afternoon, and evening). Then, you input all details in your calendar. Finally, synchronize all the information with all your smart devices. Then activates your reminder to keep track of your habits. However, it always easy to set up a budget. The hardest part is to stick to it. So, push yourself to. Stay focused
2. Find a uniform for work and at home
This minimalistic lifestyle will free your bank account, reduce stress, and keep you on track financially. How many clothes do we really need? Declutter your closet and keep it minimal.
3. Build your community
Find people who share the same value and connect with them. Swap products, recycled items, exchange used products and organize grocery group buying activities to take advantage of savings. The potential is infinite.
4. Buy really solid garments
This might sound contradictory because solid usually refers to expensive. Especially in today’s environment. Yet, we all have this ugly, rock-solid pair of sneakers, shoes, shirts we bought some years ago. I remembered when I was in high school my dad gave me a pair of Salomon sneakers. I wore them throughout high school. They lasted forever. I passed the shoe to my cousin when I graduated. Today again I still have the same pants, shirts, pullover I bought 3 years ago. They might be expensive but the quality will go a long way to save you tons of money in the long run. As you won’t see any need for replacement.
5. Shop thrift store
Yes, you can find really good products at a thrift store. Thrift stores’ shopping movement is on the rise in the entire country. In addition, chances are you will be supporting a good cause in the process.
6. Resist social pressure
Generally, we succumb to our primary impulsive buying habits because of friends, family, or relatives. As an illustration, we will buy an iPhone X because this person has one or because we want to be accepted by a group. We subscribe to TV cable because everybody has one. Even though we only watch 2 channels per week. In essence, social norms can influence up to 30% of spending habits. I know it’s easy said than done. But remember at the end of the day you will be on your own with your bills. Consequently, be careful, and know-how deep if your pocket.
7. Write a list before you go shopping – and stick to it.
One of the easiest ways to save money is to only shop when you have a list. Because when you’re without one, you typically end up making impulse buys and unplanned purchases – all things that cost money.
8. Cut your cable bill
It’s no secret that cable prices are continuing to rise. The average monthly price for cable TV is about $106 a month which adds up to over $1,200 a year.
9. Bring snacks with you when running errands
Whenever I run errands, whether I’m by myself or with my kids, I always bring snacks. Otherwise, I might be tempted to make a Starbucks run or buy a granola bar in the checkout line.
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