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Easy Steps
It’s easier than you think to get started. It begins with taking control of your money so you get it working for you. Here are some easy steps you can take to get started now.
EASY STEP 1
Spend Mindfully
EASY STEP 1
It's easy to spend less if you use some quick mindfulness techniques.
You’ve probably heard about how we should live mindfully. Sounds strange, but in our busy world, many of us are on auto-pilot much of the time. By using mindfulness techniques, it’s much easier to make better decisions. It doesn’t feel like work. Using mindfulness with health, we just decide to choose the fruit over the donut, for example.
The same thing can be applied to spending.
Take the free 10 minute mindful spending course here.
It’s very simple.
- Anytime you feel you need to buy something, pause.
- Stop what you are doing and take a couple deep breaths.
- Without judging it as good or bad, ask yourself why you want this particular thing. (for example, why do I want to buy this dress? Why do I find myself on the shoe shopping site again when I already have many pairs I don’t wear?)
- Then, ask yourself if it will make you feel better overall, or if will just make you feel good for a short time, and push you farther away from financial peace of mind.
Very often, you’ll automatically choose NOT to spend. And there’s no pain or denial involved.
Yes, it seems easy, but it really works. Here’s why:
No one likes to hear no, especially saying no to ourselves. We all naturally crave instant gratification. That’s why harsh budgets often backfire, like crash diets.
Instead, its far easier to work with our psychology than against it. So instead of saying no, we can’t buy that great new shirt, we just go through a series of questions. Most of the time, that “need” to buy goes away quite fast.
Invest 15 minutes in our mindful spending course and keep these ideas in mind during the day. See what happens. When most people do that, they just make better choices. No pain involved!
Check out our free Mindful Spending course here.
Madison Avenue spends billions of dollars trying to convince you to buy “stuff.” Advertising tries to convince you that you need a new car, a new pair of shoes, new jeans, new lipstick. And when do you need it? Now!
Unfortunately, the facts are clear: advertising works. As of May 2016, Americans collectively had $3.4 trillion in consumer debt.
When you buy stuff using debt, you are, in reality, buying tomorrow today. So you are trading your financial security and peace of mind for something. So it should be something you really need.
But it’s easy to impulse buy while at the mall or online after a long day at work. You work hard; you deserve it! For some reason, you think buying something else will make you feel better. It usually doesn’t.
While it’s easy to think we just buy things we really need…look in your closet. What percentage of your clothes do you wear regularly? Experts say most people wear only about 20% of their clothes regularly, and rarely touch the rest.
So anytime you get that familiar urge to spend, think about it. Do you really need it ? Or are you letting advertising do your thinking for you?
Only you have your best interests in mind. The advertisers? Well, their goal is to sell you whatever they can, even if it costs your financial peace of mind along the way.
EASY STEP 2
See advertising for what it really is...
EASY STEP 2
Advertising is really an attempt to manipulate your mind!
EASY STEP 3
Look for better prices or alternatives.
EASY STEP 3
It just takes a few minutes and can yield big savings
These days, this is fast and easy. Just hop on the internet and check around. It can be done in just a few minutes.
Really, there’s no excuse not to do it. This is how many wealthy people got to where they are, by simply spending smart. This keeps your money working hard for you, not others!
“A penny saved is a penny earned.”
–Ben Franklin
It varies, but you’d be surprised how easy it is to save these days. Here’s two examples:
Prescriptions. Strangely prescription prices vary dramatically. New websites can shop around for you and instantly find you the best price (Goodrx.com ). For a common cholesterol control medication, you might find the exact same drug and quantity at different pharmacies in the same neighborhood ranging from $10.63 for 30 pills all the way up to $47.64. So if you didn’t check around first, you could be paying four times as much for exactly the same thing!
Supplements/Herbs/Health Foods. Most people take some type of supplement or herb these days, or buy some specialty items like flaxseed. These can help you stay healthy, but if you buy those at Whole Foods, well, it may hurt you other ways–you know the saying: Whole Paycheck. But if you look online, you can often get these for half the price (or even less!) than what you would pay at any health food store or retail location. Try vitacost.com or swansonvitamins.com.
Those are just two examples. You can do this with anything. Investing a minute here or there can result in painless saving.
On a bigger scale, it’s even easier to make a huge impact on your financial situation.
Take cars, for example. Most people overspend by buying a new car. But did you know that new cars lose a huge chunk of value in the first year? In fact, just by driving it off the lot, you lose a big percentage of the car’s value. This is called “depreciation.” It means something is losing value. In other words, that’s your money making a quick exit from your pocket.
Per Edmunds.com, new cars on average depreciate about 15 – 25%, per year! That’s why more millionaires buy used cars instead of new. It makes sense and a few year old car is still in great shape.
See more interesting facts about car depreciation here.
Moral of the story: Make sure your money is working hard for you by always looking around for and considering less expensive options.
In America, shopping is a pastime. Maybe even a sport. We go with family, we go with friends. We go alone for some retail therapy. But if you go shopping, you are almost guaranteed to buy something or get an idea about something you’d like to buy.
Do you really want to let these advertisers impact your financial peace of mind?
Sadly, most do that as evidenced by the high amount of consumer debt Americans carry.
But the good news is that it doesn’t take much to stop this cycle. Simply avoid going to the mall!
- Choose activities wisely. How about a hike, walk or an outing to a park? Can’t spend much there and research shows time in nature makes us healthier and happier. It’s easier to catch up with friends and family that way.
- For alone time, beware retail therapy. The short-term fix may feel good, but has long-term negative repercussions. How about a long walk, hike or bike ride in nature, a yoga class, or reading outside with a good book?
Please say it isn’t so!
Unless you need to read them for your work, it’s best to avoid most magazines.
Why?
Well, those wily Mad Men and women are at it again and make those watches, clothes and perfumes look like you “gotta have it.” Just looking at a magazine, it’s hard not to find something you really “need,” but would you have even thought of it had you not opened the magazine?
And looking through the pages of beautiful photoshopped people in beautiful photoshopped places, wearing beautiful things, just seems to leave you feeling less confident about yourself and happy with your life (never mind that you know it’s artificial anyway).
Instead, how about sitting outside in the sun with a cold drink reading a book, or getting out into nature? Those things can make you feel better, without Madison Avenue making you think you’re Less Than and in need of things to make your life complete. Crazy, isn’t it? Blame Don and Peggy.
EASY STEP 4
Pick your leisure time activities with care
EASY STEP 4
Choose being outdoors and free activities over shopping
EASY STEP 5
Save on food and drink
EASY STEP 5
Easy habit changes can make a serious difference in spending
Shockingly, Americans’ bad habit of eating out too much is a major cause of people living paycheck to paycheckpaycheck to paycheck.
We’ve got a full section devoted to it in the Learn section of Smarter Spending, but in the meantime, let’s go back to the ‘rich.’ It’s easy to think they are the ones at the high-end dining locations, ordering the expensive bottle of wine and eating over-the-top celebrity chef creations. But hard data shows they are not. Instead, they are going to their favorite cheap restaurants, not spending much, and drinking inexpensive wines they like.
So like it or not, our eating habits are linked to our financial health.
We know…us too.
Fortunately, there are a lot of ways to save when you spend money on food and drinks. In fact saving is very easy!
Take going out for drinks with friends or your partner. If you go at a normal time, it’s not uncommon to pay $10 or more per drink. An hour or two later, two rounds and a large amount of cash have vanished, right? Well, there are happy hours, where drinks may be half price or less. Better yet, invite your friends to have drinks at your home first, maybe before or after dinner. If you’re a wine drinker, you can usually buy an entire bottle (5 glasses) for the price of one glass when you’re out. Or even less, if you buy that wine at a grocery store where they commonly do 30% off sales if you buy 6 bottles.
Saving on dining is just as easy. There are more details in the Learn section. And it’s not all deprivation; you’re just being strategic here. Your health and your wealth will thank you for it!
Many people do great day-to-day but blow the budget on vacation. But you lose some of the benefits of wonderful time off when you return to credit card bills far more than you expected.
Yes, vacations and time off are important. The good news is you can have a fantastic vacation without blowing the budget by doing some planning up front. It requires a bit of a mindset change, but you’d be surprised: your “new” vacation may be far better than your old style, for a lot less.
Actually, saving money can put you in a far more exotic vacation. By thinking a little differently, and not going to the same place everyone goes, at the same time the crowd is there, you can get bargain prices on amazing experiences.
After all, everyone wants to go to Maui, or New York, or San Diego. So you are going to pay top dollar.
There’s a secret to great travel that doesn’t cost much. We call it Contrarian Travel…
Most people ‘follow the herd’ when it comes to travel. So there’s alot of places that people tend to go: New York, San Diego, Italy, London to name a few.
A contrarian is simply someone who goes against the herd, not with them. In travel, by going where the herd isn’t you can save a bundle.
For example, Italy is on most people’s list. It’s not cheap. The typical Italian vacation is very expensive–everything from the hotel, to the food, to the drinks, to transportation when you’re there.
But right across the sea is another place: Croatia. Looks alot like Italy. Costs about 1/2 as much. Great food, great wine, great hotels, great history (if you’re a Game of Thrones fan, you’ll feel right at home).
That’s just one idea.
Want to stay closer to home? Instead of going to an expensive beach destination this summer, why not go to a ski resort? In the summer ski resorts are stunning-green and lush. Great hiking, mountain biking, golf, you name it and at huge discount. Rooms that are $300+ during ski season can be 1/3 to a half of the price during the summer.
Sound dull and boring? We didn’t think so. Check out plenty more strategies in our free quick travel tips.
EASY STEP 6
Crunch the numbers
EASY STEP 6
Plan your travel creatively and save
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
–Will Rogers
SMARTER SPENDING DOS AND DON'TS
Here are more tips to get you started spending less and keeping more of your money working for you.
By simply pausing to think about WHY you want to buy something, you can help determine if you really need it or if it is a passing want.
Too many passing wants is what creates the large credit card bills most Americans are facing.
Usually if you wait a day or two you will forget all about it.
Keep in mind the role advertising plays in driving your urge to spend.
Usually just being aware of it, helps us not react to it any more.
After all, who’s in control here?
When you realize how much you can save, you realize taking a minute to google other prices is time well spent.
Get in the habit of looking around for deals on the things you spend on anyway: dining deals with Groupon or Travelzoo, 2-for-1 offers at local restaurants, discount days at the movies.
Remember, whatever you save goes directly to your bottom line!
Most everyone is watching their money these days, or knows they should be.
So, suggest dinners or parties at home instead of evenings out. The food’s healthier, and it usually ends up being way more fun. No check-splitting headaches, either!
When we’re busy, it’s easy to spend on auto-pilot. Research shows that most millionaires do the opposite…in reality, they are frugal. They shop around.
So keep your money working for you, not someone else, by paying attention.
Instead, ask yourself if it’s a “need” or a “want” and if advertising or stress is making it seem more urgent than it really is.
Take your daily coffee habit. Let’s say you switch from a “want,” a large latte, to just a regular cup of coffee. So you maybe save $3.
Well, $3 a day every day adds up to about $100 per month. If invested, see what that can grow into…
Just by making one small swap—a small coffee instead of a large latte.
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