In theory, saving money should be simple. Just buy what you need and don’t spend money on things you don’t. But did you know that the average adult is exposed to over 5,000 advertisements per day? Companies spend billions in marketing and advertising to get you to notice and buy what they’re selling. How are we supposed to withstand this advertising onslaught? Fortunately there are some mind tricks we can use to help us spend less.
Sleep on it
One thing that advertisers love to do is create a sense of urgency in getting you to buy something. Hurry! The deal ends soon…while supplies last…get it today! They want to get your money before you have a chance to realize you don’t need it. This is how people end up with Nicholas Cage pillow cases.
Instead, you should sleep on it. Give your brain a chance to get over the excitement of a flashy sale price and consider whether or not you actually need it. Sometimes you may decide that you don’t want it. At the very least, you can use the extra time to see if you can find a better price elsewhere
What does it cost in time?
Time is money, right?
So how much is your time worth? Convert your dollars to hours. If you make $15 per hour, then that $60 pair of shoes is also going to cost you 4 hours of your life (well more actually since the $15 per hour is before taxes and you have to pay tax on the shoes). It just adds another layer of perspective. Is it really worth your time or would it be better spent (or saved!) on something else?
The stranger test
When you’re contemplating whether or not you should buy something, pretend a random stranger came up to you offering a choice. In one hand, he has the item you’re considering and in the other hand, he’s offering the cash that it would cost. Which would you rather have? If your answer is the cash, then you’re better off not making the purchase.
Another twist on this is imagine someone offering you the cash not to buy something. Like if you were going through a fast food drive through and would spend $7 on food, imagine someone saying “hey, I’ll give you $7 not to go there.” Would you accept it? Because by not going, you’re putting (keeping) that $7 in your pocket.
Give yourself a visual reminder
What are you saving for? A house? Car? Kid’s college? Yacht? Rare movie poster for $850,000 (plus free shipping)? Great. Print out a picture of it and put it inside your wallet or purse. Make sure that you see it every time you reach for cash or your credit card. Let it be a constant reminder of your real savings goals. You’ll think twice about your random splurges and impulse buys when you’re forced to keep your eyes on the real prize.
Appreciate it more by doing it less
They say that distance makes the heart grow fonder. While people relate that to being apart from a loved one, it also applies to purchases. Instead of going out to eat once a week, go once a month. You’ll save money cooking at home and you’ll appreciate that night out at the restaurant more because you’re going less. You can apply this to a lot of the recreational things you spend money on like going to the movies, happy hours or shopping for clothes. Do it less and you’ll appreciate it more each time you actually do go.
It’s easier to stick with cutting back rather than giving something up completely. People don’t like to give things up but simply doing it less is much more achievable. Fill that new found time up with something cheaper. Here’s a list of 100 fun things to do for free!
Help or hurt
This one helps you to categorize your purchase in relation to your financial goals. You should consider whether that particular purchase helps you get closer to your financial goal or if it hurts you and makes it harder to reach. If it’s hurting you, then you should ask yourself if it’s really even worth it for you to buy.