The Emerging Future estimated that during the next 5 years, technology will be 32 times more advanced. Imagine how many new phones, computers, fitness trackers you’ll be able to purchase? Nevertheless, have you been in the situation when you’ve just bought the newest gadget but in 3 months time, it’s not the newest anymore? And what you’ve been drooling about before, is old news now.
Technology advancements are great. They typically increase our productivity, automates part of our routine tasks and open new opportunities for us. Though, the exponential speed of the development leads to one problem: excessive and frequent consumption.
And technology is only one of the categories in which we overspend. I love technology and following the new technology trends. However, multiple times I’ve had to say “No” to the newest model, gadget, etc. Have I’ve been sad at that moment? Probably. Was I sorry about it 2 months later? Definitely no, because the much more improved model is launched by then.
Another example is the fashion industry. A well-known fact: “Women love shoes!” Another well-known fact: “For women, there is no red. It’s classic red, raspberry red, orangy red and so on.”
What it leads to? You cannot say “No” to those raspberry red shoes while window shopping. But 2 months later those shoes have been worn once and are now collecting dust for “the someday” special event.
I have to admit, these might be a tad bit extreme examples, but they are good at indicating one thing. The emotional effects of impulse buying! Yes, spending money will increase your happiness levels, increase your self-esteem and recognition. But only for a brief while (your wallet, though, will never see that money again!).
So by now, you are saying: “Ieva, I know impulse buying is not good for my budget. But what can I do?”
And here I arrive like Ironwoman ( yes, I love Marvel superheroes, don’t judge!) with a few rules, suggestions on how to decrease your impulse expenses significantly!
10 Simple Ways to Stop Buying Stuff You Don’t Need
1. Value-based spending
In economics, the utility function measures the welfare or satisfaction of a consumer as a function of consumption of real goods like food and clothing. Utility function is widely used in the rational choice theory to analyze human behavior.
You know, how Marie Kondo wants you to differentiate between things whether they spark joy or not? Or how you just buy things because it will make you feel good for a while? As a matter of fact, that’s just real-life utility function!
At its core, value-based spending is spending money with intention. Before making the purchase answer to yourself 2 questions:
- Do I want to support this company/product person?
- What is the utility of the purchase? What value will it bring in my life?
The rule of thumb is to prioritize everything that moves you closer to your goals and promotes a healthy lifestyle ( when seniors remind you that health is important… That’s experience talking!). All the other expenses would be prioritized in terms of utility.
For example, you are in search of a backpack. There are 2 backpacks that you love. One is just a plain black, casual and practical. And the other one is what your dreams are made of – pink with glittery stars (does not fit your computer and might be dreams of a teenage girl). As much as you might love the pink one, the black backpack will get much more use in the long term. Therefore the utility of the purchase is higher, though not as fun.
2. Decision map
A great way how to take the responsibility off of your shoulders is to use a decision map. It does not get much easier! Answer the questions one by one until you reach your answer. In the end, you will know your decision map by heart, so all the purchase decisions will be made automatically. It’s like emotional programming – MAGIC!
3. Be more sustainable
This is probably the first suggestion from the environmentalists. Being more sustainable or decreasing your waste can decrease your purchases significantly. Reusable water bottle, metal straws, meal prep in reusable containers will not only improve the environment around you but also save you your hard earned cash.
4. Cost vs. Labor
“A penny saved is a penny earned!”
Benjamin Franklin
When looking at the purchases, cash is not the only resource that you are spending.
What is the most valuable resource nowadays? Your first guess? Even before data and oil?
YOUR TIME!
When you are going to the cash register with those shoes in hand, think about the hours it would take to earn that amount? The price is your time. Shoes – 5 hours, jeans – 10 hours and bye 2 work days of your life!
5. Cost Per Wear (CPW)
Cost Per Wear (CPW) is another way how to evaluate the real price of the item. Especially, for fashion articles. Honestly, one of my best strategies for any luxury item purchases. (Not a senior yet, but speaking from experience).
How does it work? The price of the clothing item is divided by the estimated number of wears. So if you buy shoes for EUR 100 and use them once, your CPW is EUR 100 EUR. However, wear those shoes every day for a year and your CPW is only EUR 0.27.
6. 24-hour hold policy
When was the last time you read a book and could not stop? (by the way, any recommendations for the to-read list are always welcome). Or the TV show you binge-watched? How hard is it to get off your cozy sofa to do other things? But after a few hours, is the need for that book or TV show as strong? Probably, not.
Similarly with your willingness to buy. Straight after seeing the ad your necessity for the item will be larger than after a few hours. It’s that easy! Wait and see! Your savings account will thank you for that!
7. Mountain test
Nas Daily is an inspiring vlogger who just finished his 1 000 days of vlogging EVERY DAY! In one of his vlogs he presented his decision-making strategy on spending money. If you are trying to live a minimalistic lifestyle (your budget probably screams for it), this will be great for you!
8. 10-second rule
The main idea of the rule is simple. Whenever you are about to spend your money, slowly count to ten before doing it. This will give you time to reflect on whether you actually need these items, or how you can save on these items in the future.
Not to repeat, The Simple Dollar has prepared a list of great inspirational examples!
9. Clean out your inbox!
Oooh, the “Promotions” tab in your inbox! Almost like gates to hell or paradise, your choice! Sales, special offers, even larger sales, new collections, and other temptations all reside in this one tab in your Inbox.
There are 2 ways you can go: HARD or SMART. The hard way would be to leave them there and strengthen your character to not purchase anything (a bit masochistic, but possible). The SMART way? Unsubscribe from all of them ASAP! Clean inbox and no unnecessary temptations. Kill two birds with one stone!
10. Go cash only
Have you had the moment when you go into the store completely sure you have enough money to purchase your favorite fragrance and then your card gets declined? Your heartbeat increases, you obtain a few gray hairs and think you’ve been hacked and someone stole your money?
The example would not be so specific if I hadn’t. My sister is still laughing about this. And why? Because the great hacker was me forgetting the purchases I made before that. Happen to the best of us.
The great solution for this is going cash-only. Try it at least for a month to evaluate your spending habits and keep you accountable. If I know that my budget will be tight for a specific month, then going cash-only is a great way to ground yourself.
Believe it or not, there are occasions when it is OK to spend money — even on things you want, but don’t necessarily need. It’s not about guilt; it’s about making mindful decisions before parting with the money you have worked so hard to earn.
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