12 Money Tips to Help You Track Your Expenses and Save Enough for Your Dream
We have all heard about tracking our income and expenses, making shopping lists, and putting money away for a rainy day, but none of these things has ever made us any richer. Most of us still continue to waste our money as soon as we earn it.
This is why we, at Bright Side, decided to find the simplest and most effective tips that will help us avoid impulsive purchases and say “yes” to rational decision-making.
1. Visualize.
How does it work? Marketers do everything they can in order to make you somehow see a product and want to buy it, this is why fitting rooms are usually in the farthest corners of stores, and the most expensive goods are at your eye-level. In their arsenal, they have products with special offers, the letters SALE on the windows, plastic cards with discounts, pleasant smells, and nice music.
What’s the right thing to do?
- Option № 1. Do the “Stranger test.” You want a new dress? Imagine there is a person in front of you holding what you want to buy in one hand, and its money equivalent in the other. Which one do you choose? If you want the money more, it means you don’t really need the product that much.
- Option № 2. Imagine your purchase 6 months later. Here is the dress you wore just once, hanging uselessly in your closet. Use this moment to make the right decision.
Don’t give up without trying both of these options.
2. Don’t touch what you like.
How does it work? People really value the things they own, this is why when people sell used things, the prices they set are incredibly high. After holding something you like, on a subconscious level, you think that it is already yours. The wild price doesn’t seem as crazy anymore, all of the recommendations on saving money are forgotten, and here you are about to pay for a new smartphone that you don’t need at all.
What’s the right thing to do?
- Ask the sales associate to demonstrate how the phone you like works or to show you the sweater you think you like.
- Buy things online less often. Studies showed that online shopping is even more out of our control and we make more impulsive purchases on the internet.
The most important thing — no matter what, don’t touch the thing you think you like.
3. Walk left.
How does it work? When entering a store, most buyers go right because they are right-handed. Marketers know about this and they deliberately place the most expensive goods in this part of the store.
What’s the right thing to do?
- Be prepared for shopping: Don’t forget your shopping list and walk around the store according to what is on this list. This makes you more disciplined.
- Pay a lot of attention to the lower and the upper shelves — the cheaper goods are there.
- Don’t take a cart, carry what you are going to buy in your hands. If you need to buy more than just a couple of things, take a basket, but still not a cart — this way, you won’t buy anything extra.
Remember that preparation is the key to conscious consumption.
4. Don’t chew gum.
How does it work? People who chew gum have better blood circulation in their brain and their cognitive functions improve. This causes them to want to be around people for a longer time, to really take a long look at the things they are buying, and to think deeply about what they need.
What’s the right thing to do?
- Don’t chew. According to studies, the process itself makes you spend more time choosing the things you need and buying more things than you planned.
- Focus on what you need and don’t pay attention to other “good” offers. You need a list or a clear idea of what you initially came to the store for.
- Limit the time you are going to spend in the store. Go in, get what you need, and leave.
Don’t chew gum, concentrate on self-control, and maintain your full focus.
5. Don’t look around.
How does it work? When a person sees a product with a discount, they immediately want to buy it in order to avoid spending more in the future. This is an instinct: possible losses worry us more than possible purchases and the very thought that if you don’t buy something now, you’ll lose your chance to buy it in the future worries us.
What’s the right thing to do?
- Ignore products that are on sale if they are not on your list.
- After you get what you need, go straight to the cash register. And say no to the offer from the cashier to buy 7 packs of gum for the price of 2.
Fight the fear of loss — and you will always win from this.
6. Take some time to think.
How does it work? After you hear a sales associate tell you that they have an amazing offer that will expire after today, or that this is a discounted product, or that it’s a unique offer that will never ever happen again, you might make an impulsive decision to buy it and you will regret it later.
What’s the right thing to do? In order to make the right choice, you should wait.
- Fight the temptation. For the sudden, “I want it” feeling, take a 24-hour pause. And for an even bigger purchase — take at least 3 days.
- Use this time to watch the reviews on YouTube, to compare prices, and to read reviews online.
- Count how many hours of work you need to do in order to earn the money you are going to spend on whatever you liked — sometimes this is a sobering experience.
- Check all the things that you have at home that can or that already play a similar role. Sometimes, just by looking at what you have, you might realize that you don’t really need anything else.
The pleasure of buying something is also about anticipation, so if you don’t buy this thing, you still won’t lose anything.
7. Live your life instead of spending.
How does it work? You lose the fun the moment purchases stop being hobbies and become your go-to task at any free moment. When buying something, you boost your mood for like 20 minutes and then you start worrying about the money you spent.
What’s the right thing to do?
- Only buy things when you need them and don’t go to stores if you don’t need to.
- Plan your visits to the store. Shopping can be enjoyable, but only if it happens consciously. If you plan your purchases in advance, you won’t feel sorry about the money you spend. If you don’t plan though, you might even spend the last $50 you have.
Shopping should only be a very small part of our lives.
8. Put aside what you save
How does it work? You know the amount of money you can spend on your purchases in a week. After 7 days, you look into your wallet (or check your bank account) and see that you have an “extra” $30. If you leave this money in your wallet, there is a huge risk that you will just waste it.
What’s the right thing to do? Invest in your own future.
- Don’t spend the money you “accidentally” got. Someone returned their debt to you or you saved some money? Split the amount into 2 parts: spend the first part and put aside the second part for your dream.
- Collect and review the receipts from the stores — they often show the amount of the discount. Take the saved money from your wallet and put it in a different account. Put all your change into a piggy bank.
- Stop buying all those things you don’t really need. For example, that cup of coffee you buy every day.
Get a piggy bank for cash — it doesn’t have to be a pig, just something you like to make the process fun. If we are talking about a bank account, you should have a separate account exclusively for savings.
9. Save money for a single goal.
How does it work? We always want a lot of things and we have a lot of goals. And then we start thinking: which goal is more important? How much should I put aside money and for what?
What’s the right thing to do?
- Pick a goal. It doesn’t have to be a huge goal, like one that will change your world. It just has to be one goal, and then this way you will see the actual results of your effort and you will arrive to achieving this goal faster and faster.
- Don’t stop at what you have achieved. When you’ve accomplished saving for one thing, start saving for something else.
Focus on one goal and move on to the next one only after you’ve achieved the first one.
10. Dream.
How does it work? It’s not easy to fight the desire to make yourself feel good now just to feel bad about it later. This is how loans work.
What’s the right thing to do?
- Think about your goal every time you are tempted to buy something that is “outside of your budget.” Ask yourself: how am I going to achieve this if I keep buying little things with the money I could put aside for my actual dream?
- Keep a diary. Instead of just thinking about your goal, write it down — the people that write down their goals are much more successful in achieving them rather than those who just think about them.
Conscious estimations can help you avoid unnecessary spending.
11. Focus on the reason why you want to save money, rather than how.
How does it work? The moment you have to eat pasta without a rich sauce you will understand how tired you are of this tasteless food and the whole saving money thing, and the next day you will buy the meat to make the rich sauce, the popcorn you wanted, and that chocolate bar you denied yourself before.
What’s the right thing to do?
- Think about what you are saving for more often. It has been proven that people that know the exact reasons why they want to save money, save more than those that work on the actual plans on how to save.
- Don’t be afraid to make decisions. Our lives are dynamic, and every week, we have to make decisions that are outside of our financial plans. This is normal. Move toward your goal, but don’t stop having fun in your life.
- You can read more about how to spend less, but still have fun here.
Planning is much more effective when people are able to make unexpected decisions and remind themselves of why they want to reach a certain goal.
12. Check your reserves.
How does it work? Very often, people concentrate on how far they are from achieving their goal, instead of how much closer they are to it now than they used to be. You put money aside into a box or a savings account, but you don’t see or touch the money you saved. As a result, the money becomes an abstract thing, almost like some fake currency. It is your money, but it doesn’t make you very happy.
What’s the right thing to do? Be like Scrooge McDuck that took a dive into his gold vault — track the process and enjoy it.
- Watch your savings grow. It will help you see how your efforts pay off in real-time.
- Make it a ritual: Every month, stop doing whatever you are doing and check to see how much money you have saved.
- Don’t forget to reward yourself for your successes: when you’ve reached a certain mark you set for yourself — celebrate it and buy something small but nice for yourself.
These simple actions can reinforce your desire to achieve this goal.
Bonus: 3 questions you need to answer to make conscious purchases
Here are the 3 basic principles of the theory of conscious consumption and saving money:
- Practicality. Take a break and ask yourself: Do I really need it and will I really use it?
- Financial affordability. If you answered yes to the previous question, ask yourself: Can I afford it and is it a good decision at this point in time? If yes, go to the next question, if no, keep saving and add this product to your list of goals.
- Emotions. Ask yourself: How will I feel when I buy this? Will it make me feel bad?
Dear readers, share the tricks that help you be more conscious about your purchases, avoid buying unnecessary things, and save money!
Alena Sofronova for BrightSide.me