How to Spend Less
Tips to Control Spending
There are many tips for saving money out there. From couponing and shopping sales to vacationing offseason and brown bagging your lunch.
However, this page is focused more on examining ways you can adjust your mindset or your lifestyle to live on less money overall. These types of changes to control spending are seldom simple but on the other hand, they can result in more than just saving money; they can produce greater satisfaction if your expectations shift.
It's not about giving things up as much as it's about re-prioritizing. These are merely lessons from my own experience and my frugal parents who lived well. It is only food for thought, not professional advice.
1. Identify Your Priorities
The key point here is to be conscious of your priorities so that you can stop spending so much on low priority items and have more for your primary wants and needs.
It would seem that we should all identify our spending priorities. What are the things that we really want to be sure we have in our lives? We may find that some things don't really require a large amount of money; things like time with family and friends, or time being creative for instance. So take the first step, make your list of priorities.
As you go through your list of priorities, you may find some of your most urgent needs are being deprived by needs much lower on the list. In other words, you spend too much on areas that aren't a personal priority. For instance, perhaps you're spending so much on dining out that you don't have enough left to spend on your number one priority which is taking a vacation (or saving for college or whatever else it might be). Simple enough, right?
The other reason this is critical though is that there are many others who influence your spending. By setting your own spending priorities you can help thwart this influence. Only then can you really improve your quality of life as this quality is dependent upon having what you need and want, not the items and services that others think you should have.
Making spending cuts on lower priority items is much easier emotionally than cutting high priority items, especially when you know your ultimate reward is getting what you really want.
2. Avoid the Negative Influence of the Sales Pitch
The key point here is to recognize how much of what you see and hear is a sales pitch and to reduce your exposure to it.
We are bombarded with advertisements and marketing messages constantly. Billboards, magazine ads, social media, commercials on television, logos on clothing, and more are everywhere. We are convinced that we need things by those who benefit from selling those same products and services to us.
Some of us are more susceptible to these messages than others, but certainly, all of us are influenced.
My personal experience indicates that reducing exposure to television commercials and ads online can play a significant role in decreasing the number of things I feel compelled to buy. There are a couple of methods to take control of exposure to commercials.
The first and most obvious is to decrease television viewing time. Set a limit. Some people are able to virtually eliminate television viewing but even if you identify 2 or 3 shows you enjoy and watch only those throughout the week you would significantly reduce your exposure to media advertising. View more DVD's on TV and record more programming rather than viewing it when broadcast. Shows and movies on DVD don't contain many non-movie ads and when recording shows and watching them later you can skip the ads altogether.
If you can do none of the above, then try muting the TV during commercials. If you watch TV with friends or family, this allows you a break in which you can discuss what you've just seen versus exposing yourself to the persuasion of marketers. Just as you wouldn't allow a door to door salesman to enter your home and stay all evening, every evening, in an attempt to sell you something, why would you allow these same sales pitches to take over your living room? If you aren't constantly told you need or want something you are much less likely to spend your money on such items.
For internet advertising, you can disable pop-ups, consider ad blocking apps/software, and of course make sure you don't sign up for more contact from companies when you make purchases. If you get sales notices from online businesses where you've made purchases previously, it's best to unsubscribe. It's sure to boost your spending when you are tempted by special deals every single day.
3. Live Within Limits
The key point here is you must live with the reality that you can't have it all, you must identify, set, and stick to limits.
No one likes to have limits placed upon them. When we can get unlimited calling and texting for "only" $100 dollars or the "everything" package for our television viewing for just $99 dollars, we go for it. If we're thinking of buying a 2,000 square foot home but can "qualify" for a more expensive 3,000 square foot home, we're encouraged to buy the bigger home.
Often when we inquire about a new service, we're told the price of "the most popular" rather than the most economical option. You have to inquire to find out about such choices. A telecommunications provider may tell you their package will cost $32/month with taxes for unlimited calling, but if you inquire they may have a $14/month package for unlimited incoming calls and 500 minutes of outgoing calls. This works of course, only if you're able to set and stick to limits.
Realtors, lenders, salespeople, and ad copy all conspire to get you to accept no limits and to buy all you can. We're convinced. If our home becomes crowded because our things are seeping out of the closets or our garage is cluttered, many of us look for a larger home not a way to decrease our stuff. We don't want to be limited.
Some ads even target parental sympathies. One credit card company pictures a parent with their card, explaining that now their children can have "everything" they want. Unlimited spending is a good thing for those who are selling and lending.
Many believe that our parents had a better quality of life, and perhaps they did. However, they may well have had fewer things, fewer services, and more limits, but they had what they wanted and needed. They splurged on things but conserved strictly on others.
The only solution to this problem is to identify limits that you can set and stick to despite an onslaught of arguments to convince you otherwise. What you choose to splurge on then becomes your choice and your quality of life improves.
4. Don't Fall Prey to Competition and Image
The key point here is to recognize other environmental influences on your spending and to forget about "the Joneses" if you want to spend less and live happily.
I lived in a rather nice suburb for a number of years. Despite living in a fairly middle-class neighborhood I was otherwise surrounded by wealth. Beautiful homes, with luxuriously maintained lawns, expensive cars, and so forth. It was lovely but unfortunately, I began to feel bad.
I began to feel unworthy and wondered why I didn't live that way. Then I realized I had enough money if I chose to spend it all on my house and car. Tantalizing. Everyone else had these things. But I stepped back, there were other things I wanted. I wanted to travel, to perhaps start my own business, to not worry about paying the bills if I lost my job, and so forth. Stepping back and assessing what I really wanted and setting related goals helped me to prioritize my spending.
In the end, I moved to a rural area for unrelated reasons but found that there, removed from the constant reminders of all of the material things I wasn't even sure I wanted, I felt much less compelled to "keep up".
In my opinion, similar to the bombardment by advertisers is the influence of others who are big consumers. The solution to this influence may be individual; for some, it may be removing themselves from the temptation while for others simply defining their priorities, setting, and updating goals routinely may be enough. In cases where you're surrounded with people who have a lot of "things", it's sometimes helpful to remember that those people may have a mountain of debt, they may have no savings, they may have to work endlessly just for the purpose of paying off all of those possessions and never have a vacation or other things you value.
5. Don't Let Spending Dominate Your Leisure and Socialization Time
The key point here is to avoid many of the spending focused activities that are so common.
Another important step in your plan to spend less is to evaluate your leisure time. Again, there are many money saving tips for finding the most affordable entertainment that can reduce your costs but there are more general concepts and behaviors that can refocus your time on socialization and relaxation. Think about the activities you choose and whether or not they put too much emphasis on spending money.
As an example, for many people shopping is recreation. It takes up time, it can be social, and acquiring new things can sometimes be fun. However, it's very spending focused. It's likely that the more you look, the more you'll end up buying. Therefore, if you can transition shopping from a leisure pursuit to a purpose-driven and planned activity, you will have made huge strides in controlling your spending.
Making lists and condensing all shopping for the week into a single trip are tactics that can help. Finding other activities to do with friends or family members rather than shopping is critical as well.
Another common leisure pursuit is attending sporting events. Active involvement in a sport can be more engaging, healthy, and in many cases more cost-effective. Participation can provide the group socialization and excitement offered by spectator sports as well. Communities frequently offer softball leagues, summer tennis, bowling leagues, and more.
Participation in health and fitness clubs is another social/leisure activity enjoyed by many. For those with fairly modest fitness goals, however, consistently participating in a family game of softball, frisbee, basketball, volleyball, bicycling, or a visit to the community pool would probably be as effective. Even a daily walking date with a spouse or friend is a great fitness goal and opportunity for good socialization. In general, the goal is to find more ways to entertain yourself and fewer instances of paying to be entertained.
Dining out is a primary source of leisure for many people as well. A nice meal can certainly be relaxing and provide a good source of interaction with friends or family. However, it's also excessively focused on spending as many people eat more than they typically eat at home and certainly many drinks, desserts, and other items cost more than the average at home meal. Tipping included, dining out is an expensive endeavor.
A less spending focused option is to have special dinner nights at home; a barbecue night, a picnic, a pizza night, and so forth. Friends can rotate responsibility for dinner in their home with an evening of conversation or some other entertainment. Potlucks are another option. If the focus is on family and friends these options are viable in many instances.
Skipping Interest Payments
The key point here is that interest payments mean that you are agreeing to pay much more, often twice as much more, for a product than a person who pays in cash up front.
No, this isn't about skipping a mortgage or credit card payment. However, skipping interest payments is about living with the philosophy of buying things when you have the cash to buy it; otherwise known as living within your means. Yes, you've heard it all before but it's a philosophy that can cut your spending drastically.
Some people still live without credit cards and they pay less for everything they buy because of that. Some use credit cards very carefully but it requires discipline. If you have a card without fees, and you pay it off in its entirety each month then you've done well. However, the concept is the same, you don't spend what you don't currently have.
Obviously for some, getting a loan or a mortgage can be a necessity. If you start a new business or are a family of 4 buying a first home it's not unreasonable to expect to have to "borrow" the money. However, the needed philosophy is one that says you don't want to pay $300,000 over time for a $150,000 home, thus using credit should be limited to only the largest and most necessary items as it's a huge expense that gives you nothing additional.
Be Wary of Ongoing Payments
The key point here is that leasing vs. purchasing can sometimes be a costly decision.
There is a lot to be said for keeping routine monthly bills to a minimum. In many cases, owning something free and clear can save you money. The fewer monthly payments you have the less you have to worry about if you lose your job or have a large unexpected expense come up.
It's good to look at your fixed expenses and determine if any of them can be eliminated before an emergency arises. You can also address this as you purchase things. Sometimes you have more than one option when making a purchase and what may at first seem the least expensive, may, in fact, be much more costly.
For instance, when you sign up for cable (TV, internet, etc.) you need a modem, a router, etc. Do you choose to pay the low monthly fee for that equipment or do you investigate which models you can purchase that will be compatible? If you look at the cost of buying one time vs. a monthly fee over several years you should easily be able to see the difference in cost to you.
Another example would be purchasing a security camera for your front door. There are a number of options out there that would provide the camera, the apps, etc. that you could install yourself. No ongoing cost until or unless it needs to be replaced. The other option is to have a company install the equipment free of charge and pay a monthly fee. Before deciding which is right for you, compare the long-term cost over a period of several years.
It's the same decision you must make when deciding to lease vs buy anything, a water softener, a car, furniture, etc. All of these costs add up over time robbing you of money you could use for other things, invest, add to your retirement savings, or build your child's college education fund. Be wary of sales pitches that tout affordable monthly payments. An affordable payment that extends for years at a time may not be the deal it appears to be at first glance.
© 2008 Ruth Coffee