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Spending money is one of the activities we do on a daily basis. However, it seems that somehow spending money is much easier (and much more pleasurable) than making money! It is not always simple to convince yourself that you don’t need a new pair of shoes when you already have 20. But do you really need them?
Today, becoming a smart shopper is of an essence. And your journey toward becoming better at spending money starts with building better spending habits.
Did You Know? The spending habits are dictated mainly by how much money you can afford to spend. Consequently, the spending habits of the rich will be different than the spending habits of the poor. Spending habits by age can be also very different, meaning that the spending habits of baby boomers will differ by far than those of the millennials. Still, everyone can become a smart shopper and here are the 13 best tricks you can use to build better spending habits.
1. Start By Identifying Your Bad Habits
The first step towards success is becoming aware of everything you are doing wrong. Of course, shopping is fun. It gives you a sense of instant happiness. But does that happiness last when you receive your credit card statement? Not really!
It is self-evaluation time!
How to Do It: Open your bank statement and take a look at it. Look for a pattern.
- What are the things you are spending money on more than you should?
- Are you going over your allowed mobile data every month?
- Do you see too many takeaway dinners just because you were too lazy to cook?
- Are you impulsive shopping just because something was at a discount and in reality, you didn’t even need it?
Start by answering these questions to yourself. In order to be better, you need to understand what you need to change.
And most likely, just like everyone else, you need to stop your impulse shopping to start with.
2. Eliminate Triggers
Today, social media is fueling spending sprees more often than we would like to admit. You are just casually scrolling through Facebook and you see something that you don’t really need but it just looks cool!
Good to Know: If your objective is to stop spending money on unnecessary things, then you need to eliminate such triggers that are leading you to press Buy Now. This is one of the worst spending habits of college students and millennials since they literally live on social media. Today’s consumers’ society is constantly pushing ads out but luckily this is an easy fix.
Pro Tip: Every time you see an ad that is pushing you into making a purchasing decision that you consciously know that you will regret later, hit the Hide Ad button. It might not seem like a lot but this actually is of tremendous help. Not knowing what’s out there will keep you away from spending money on random things. If you really needed that item, you know how to browse the web and find it.
3. Lists Are Your Friends
According to numerous studies over the years, it turns out that making lists is a simple trick that can improve your spending habits and save you money. Mental lists don’t seem to work – you either go home realizing that you forgot to buy something essential or with several other things that you thought you needed but you already have.
Did You Know? Without having a defined list, you are more likely to jump up to impulse shopping. And impulsive shopping is bad.
For Example: You said you were going on a diet but you saw those sweets in the shop. They will quickly find their way to your shopping basket!
When having a list, your brain focuses on it. You will not be wandering around the supermarket and sticking to your bad grocery shopping habits but you will actually go looking for the things you need. This is a small trick that can make a difference. Don’t underestimate it.
4. Monitor Your Satisfaction
Sure, we are all happy when we buy something new! Still, buyer’s remorse kicks in much quicker than we would like it to happen. Yes, it is probably possible to return the item but suddenly that’s much more difficult when you have what you wanted in your hands.
What if we tell you that having an extra $100-200 on your bank account at the end of the month will make you much happier? While purchases give you instant happiness, the extra money on your account will not only give you happiness but motivation as well.
Next month, lead by that feeling of pleasure you will aim to save even more. And imagine what will happen if you stick to it over a longer period of time!
5. But It Only Costs $5
This mindset is one of the worst spending habits that probably everyone has. You look at something that you have 0 necessity for. Yes – but it is only $3! You swipe your card and you go home.
Good to Know: With purchases like this, the buyer’s remorse is either much lower or non-existent simply because you are not spending huge sums of money. But mindsets like this are what’s going to cost you thousands over the course of several years. And when you realize that, the buyer’s remorse will kick in big time!
There’s nothing wrong with buying a $3 item if you need it. But if you don’t need it, look away and carry on.
6. Buy Used Goods
Clearly, there is great satisfaction in unboxing a new product that you just bought. But is that really necessary to get something brand new?A trick that can be a great leap towards building good spending habits is realizing that there is nothing wrong with buying used goods.
Did You Know? This is one of the spending habits of the poor mainly, but millennials are beginning to recognize this as a brilliant spending habit that saves a lot of money.
You need a TV because your old one broke down? How about buying one second-hand?
It is the same thing with fridges, stoves, consoles and even mobile phones. Technology nowadays moves so rapidly and prices drop quickly. Only a few months of use can lead to a significant reduction in price, so why not buy a second-hand item and keep a few hundred dollars to yourself?
7. High-End Brands at Low Prices
Discounts are amazing. But thrift stores and charity shops are your friends. But before we go in deeper on this topic, you need to determine what sort of clothes shopper you are.
Do you go out to buy a specific item of clothing that you need and are you ready to pay the price? Or do you already have a lot of things in your wardrobe and periodically add new things when there are discounts?
The Focused Shopper
If you are the first type of buyer, you need to take a step back. Why wait until the last moment when the item becomes an absolute necessity?
If you realize that soon it will be time for new jeans or a new coat, don’t wait until the last moment. Start your search now.
- For example, winter coats will be cheapest in spring/summer. So why wait until fall/winter to get one?
- Buying the coat several months before you need it might come at a ridiculous price, something like $10 after a 90% discount.
- Learning what is the best time to shop for something is the first step toward building a spending habit that will save you a lot of money.
Let’s stick to our coat example a bit more.Spring cleanings are still a thing and a lot of people decide it is time to take things to charity shops and thrift stores. Before putting the winter clothes away, people are very likely to get rid of items they don’t want.
So if you see a lot of winter clothes hanging in thrift stores in mid-spring, you know the reason why.
The Casual Buyer
Now let’s elaborate on the second type of shopper. If you fall under this category, then you probably have a wardrobe full of clothes and you are still adding pieces. Buying clothes for future occasions is actually not a bad thing. Are you attending a wedding in September and you found the perfect dress six months earlier at a really good price? Go for it, buy it!
- The first type of shopper will completely discard this idea and wait for a few weeks before the wedding, meaning that they will pay much more just because they need something urgently.
- Still, while this mindset is sometimes a good thing, other times can be really bad.
- Sometimes there are simply not any upcoming occasions but this type of shopper may buy clothes thinking that it might come in handy.
Good to Know: This is very similar to the “It’s only $5” mindset. If you are the second type of shopper, then limit your trips to malls and boutiques. Stick to the thrift stores and charity shops.
If you haven’t been to one, you will be surprised how cheap can you pay even for designer clothes. And the truth is, clothes that are too worn out do not even make it to the rails. So expect to see good quality products.
FYI: Also, don’t be surprised if you find items that still have the labels on at only at a fraction of the price that you will pay if you bought that in a boutique.
8. Use Coupons
Coupons are among the most overlooked things when it comes to saving money. People tend to think “I will save $2 if I spend $30, is it worth it really?”. Yes, it is. It definitely is.
Did You Know? The average person goes into a store 50 times over the course of a month on average. That’s 50 times x $30. Which is $1500. Now if you saved $2 on every trip to the shop, that’s $100 a month. In a year, that’s $1200. It is basically free money.
Pro Tip: Use the loyalty programs of the stores that you shop at and find additional coupons online.
9. Compare, Compare, Compare
Let’s say you saw an item with a 30% discount advertised online. The price seems acceptable so you decide to get it.
It is not uncommon for some retailer’s discounted price to be higher than other retailer’s regular price.These are marketing tricks that brands use but with a bit of research, you can avoid falling in a trap and save money!
10. Use Cashback Apps
Similar to coupons, using cashback apps can be a good way of saving money and building healthy spending habits. You are spending money anyway, so why not get a bit back for your loyalty? Cashback programs are becoming more and more present on the market so it is time to use the advantage.
- Take a look at Ibotta, for example. With Ibotta, you can get cashback for your everyday items that you buy in supermarkets. While Ibotta works for brick-and-mortar shops, there is another handy app that will do the same for your online purchases – Ebates!
- Ebates works on the same principle as Ibotta and gives you money back when you shop online. Simply search for the store on Ebates, follow the link and after making the purchase you will get your cashback. You can get between 1% and 40% cashback depending on the store where you shop.
- Last but not least is Shopkick (use promo code MDR to get a $5 bonus), another handy app with great benefits. By using Shopkick, you earn points or kicks that you can convert into gift cards and spend them later.
11. Never Pay For Shipping
Yes, we all hate shipping charges.Some of us would rather buy an extra item to qualify for free shipping than pay the shipping and handling costs. But how about not buying an extra item and not paying shipping costs? In cases like this, is online shopping completely necessary or are you just too lazy to go to the brick-and-mortar shop?
If the latter is true, then it is time to leave the laptop and go for a walk to the shop. Why pay the extra charge when you can simply get the item in the brand’s shop nearby?
Pro Tip: If you can’t find the item in the shop, opt-in for click and collect rather than home delivery. Some brands offer click and collect for free, but even if it is not free the price will be significantly lower than having the item delivered to your doorstep.
12. Sleep On It
How many times have you said “But I want this so bad!” or “I deserve it!”, then you got it and realized that you made a mistake? Yes, you deserve it. You work hard and you deserve everything you want. But the reality is different and our wished usually don’t correspond to our spending power. Hence why not everyone owns a mansion with a pool. We all have experienced such behavior. Walk away. Go home. Sleep on it. In most of the cases, you will realize that it was actually only an impulsive behavior and feel happy that you didn’t go forward and made the purchase.
13. Create a Budget
Budgets are the ultimate way of making sure that you are spending only as much as you should be.
Did You Know? Not having a budget can make your spending habits difficult to control. Setting your limits is the first step towards successful budgeting plans.
Take a look at PocketSmith for example. This handy program can help you stick to your set budget. You can import info from your bank accounts, schedule payment and set your limits.
Which spending habits do you have and are you willing to change them? Hopefully, our tips made you aware of the things that are hurting your finances and offered a solution on how to improve them! Small changes can make a big difference.
Why spend more than you need to when you can save them for something important later on? And more importantly, why sink in debt for buying unnecessary things when you can keep a positive balance on your account and be happy by building health spending habits?
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