When entering adulthood, understanding personal finance and saving money are crucial. When you understand the value of money at an early age, you can more effectively control your finances and refine your spending habits. Although I realised the value of money at a later age (when I was 22), I am so glad that I have overcome my big spending habits and transformed into a big saver and frugal spender.
Now that it is a new year (hello 2018!), it is the perfect time to start taking control of your finances. I am participating in the January challenge of going the whole month without shopping, hosted by my dear friend, Chloe, who lives on the opposite side of the globe! (Girl, we’ve got to meet up!). You can check out her blog over here – she’s an absolute gem!
I highly recommend that you join this ‘No Spend’ challenge! It is a great starting point to learn the value of money and how saving can be beneficial to your life. By the end of the month, I’m sure you will be amazed at all the money you have saved and how many unnecessary things you have been purchasing all these years.
During this month, I am only allowed to shop for groceries and essentials. I hardly shop for clothes but I do like to shop for office decor, and cute stationery so I’ll have to resist that temptation. I’ve got this!
To assist you with going the whole month without shopping or if you really want to learn how to cut your spending and live a minimalist lifestyle, here are 12 simple ways to curb your spending habits and save more money.
1. Pay in cash instead of credit card
According to a 2008 paper in the Journal of Experimental Psychology: Applied, using a credit card dulls the pain of paying because in reality, you are just swiping a card and not performing a physical exchange of cash. Would you rather hand over that crisp $50 bill or swipe your card? I bet you chose the latter.
While the world is rapidly moving towards a cash-free payment system (I’m looking at you, Sweden!), it is difficult to avoid paying with your credit card. However in any possible instance where you can pay in cash, take it! You are more likely to acknowledge the pain of separating with your hard earned cash and become more aware of your spending habits.
2. Only purchase what you actually need
Ever purchased something because either a) it’s on sale, b) it’s an indulgence, or c) both a and b? Most likely, you didn’t really need it.
Keep a note of what you actually need to purchase. If your leggings ripped, make a note to buy a new pair. If you have 5 pairs of leggings at home and found a cute pair of leggings for sale, re-think your decision. You are better off saving that money.
3. Write shopping lists
Lists keep me sane, there’s no doubt about that. To avoid overspending, create a shopping list so you know exactly what you have to buy. This also prevents clutter and wastage in your home.
4. Ditch the coupons that you don’t need
At one point in my life, my wallet was stashed with coupons. Whether I shopped at the place or not, that wasn’t in the question. If I ever went to buy something there, I will have a coupon for my purchase. Don’t be like me! Stop hoarding coupons that you don’t need or you’ll be tempted to buy something just because you have a coupon.
5. Use what you’ve got
Before you go out and buy something, take a good look at what you have got. If you already have it at home, use it before you buy another. I really have to take this point in consideration for my stationery addiction. If I see a pretty journal, I will buy it and add it to my 10 other pretty journals that I haven’t used yet. I’m working on it, okay!
6. Invest in a reusable bottle
It’s about time we ditched the use of plastic water bottles. The poor environment does not need anymore plastic waste so let’s be environmentally friendly souls and invest in a reusable bottle. Apart from the environmental concerns of plastic bottles, they are also expensive. A plastic bottle of water is priced at $2.50 on average. If you invest in a reusable bottle, you can fill your bottle with water from the tap for free.
Moral of the story: Just get a reusable bottle for the sake of the environment and your wallet.
7. Unsubscribe from online stores
Keep the temptation away by unsubscribing from online stores. If you don’t see their constant promotional deals, you won’t be inclined to spend unnecessarily. Also, your inbox won’t be filled to the brim which is always a plus!
8. Take control of your spending habits with a weekly budget
Analyse how much you have to spend per week on fixed and necessary expenses such as rent, groceries, phone bill etc, and set yourself a budget. Try to aim to spend below your budget and any additional $$ can go straight into your savings.
9. Find free activities to do
Cutting your spending doesn’t mean that you won’t have fun. There are so many free activities you can do! Browse your local city website to find free events and activities that are happening. Try hosting a movie night with some friends instead of going to the cinema. You can play board games and online games instead of going to the arcade. You can also host a dinner party at home instead of going to the restaurant. Taking control of your spending habits doesn’t have to be boring!
10. Declutter your space
When you declutter your space, you will find things that you never knew you had. You know that missing dress or that unopened lipstick package? Now you can stop spending more on unnecessary items. Plus, it is also nice to have a clean and tidy space to relax in so get decluttering!
11. Be wary of promotional sales
After the holiday season, it is SALES GALORE so it is really hard to resist the temptation! However, make sure you are wary about the psychology that goes behind promotional sales such as the famous ‘buy 1, get 1 half price‘. Did you really need to spend extra $$ for another product? The company will receive extra profit from an additional sale while you will have less $$ in your bank account. Another cheeky marketing promotion is the use of scarcity to encourage shoppers to quickly purchase their item. It is human nature to not want to miss out on anything and when something is scarce, we quickly flock towards the sale. If you want to curb your spending habits, take the time to read more about the psychology of promotional sales.
12. Do some quick math as a reality check
Before you make a purchase, ask yourself ‘Is this item really worth the price?’. Here’s where some quick math comes into play.
Say your hourly wage is $30 per hour and the jacket you are eyeing is $210. Is that jacket worth your 7 hours of labour? This will help you put the item’s worth into perspective and whether or not you really want to buy it.
I hope these tips help you control your spending habits to start saving more money! If you want to find more ways you can save money, head over here to find my top 10 tips on how I saved (a lot) of money for my next travel adventure.