We live in a society that emphasizes ‘having‘, instead of ‘experiencing‘ and ‘saving‘. Of course, there are a gazillion of personal finance blogs, books and resources to teach us better saving money routines, but most of the media outlets are still centered on promoting spending like there’s no tomorrow.
It’s no wonder that many of the adults today live paycheck to paycheck and never get out of the ‘broke‘ status.
Here are few tips that would allow you to get a better lifestyle and still not ignore your saving money goals:
1. Ignore what the ‘world’ says
For years my folks were pretty displeased to see that I don’t dress ‘well’ (or at least what some would call it) to show that I’m actually doing well financially. Compared to most of my neighbors, I was earning way more, was able to travel a lot, run my own business etc.
Most of these people were shocked to find out that I was able to spend 18 months in NYC or that I actually run a small home based business. They never thought I ‘account’ to anything, since I always dress casually, while most of them are trying to show their status (whatever that is) with expensive clothing and some jewelry.
Years ago I cared about what the others would think (reason why I chose to get in debt for a new car since most of my colleagues had a similar car loan – so, for 4 years, I paid for my mistake), but not anymore.
My friends know WHO I am and love me for this, just as I never cared if they come from money or not (I actually come from a poor family myself). My web design clients NEVER cared about how I look or how I dress. They care about my services, my prices and the results I can provide.
Stop caring about your ‘image‘. People who judge you by the clothes you wear or the car you drive don’t matter. Your true friends love you the same, whether you are in rags or gold. Of course, this doesn’t mean you should be a slob or appear unprofessionally dressed at work, but clothing, jewelry or any other ‘status’ items shouldn’t be your priority.
Buy what YOU need, not what you think others will admire and this will put your saving money in overdrive.
2. Focus on what matters most
One of the best things I learn from all the personal finance materials I read so far is that most of us can still afford to ‘splurge’ on what really makes us happy and save money on the rest. Sure, if you spend too much on other ‘wants’, you’ll always be broke, but a good focus helps a lot.
Let me explain. In our family our baby daughter is clearly our priority. We have spent money for her and never looked back. We don’t go crazy spending, but we do purchase the best diapers for her, quality ingredients for her food and quality clothing (not always expensive, since we don’t care about the brand as much as we care about the material and craftsmanship).
Another thing that really matters to us is traveling. We LOVE to travel and consider this to be one of the best things we can offer to our daughter. As you can guess our travel budget is probably one of the biggest every year, but it’s something we truly value.
Since we’re not millionaires, it means we need to ‘cut back’ on something else: clothing (we purchase what we need and wear our clothes for more than 2 months), gadgets (while we have everything we need, we get new ones only when the previous ones break down), car (we drive ours until it’s no longer feasible to repair – usually at least 10 years) etc.
If you find out what really makes you happy, this allows you to get a better lifestyle and save more money.
3. Pay yourself first
Probably the best saving money tip: set aside money for your savings BEFORE you start spending on anything else. We’ve been doing it for a while and it works, not to mention that my mother-in-law is a master at applying this strategy. With a pretty small pension she’s been able to save quite some bit all these years.
4. Don’t consider debt to be ‘normal’
Of course normal today is different from what it looked like years ago, but this still doesn’t mean you should follow the ‘herd’. There are cases when you cannot do anything without debt (buying a home comes to mind), but you should be focused on paying off your debt and keep away from it.
Always having credit card debt, always finding excuses for this and not trying to mend your spending habits will keep you broke. If you would like to have more money at the end of the month and not have to rely on each paycheck to make it, start changing your MINDSET.
While being in debt is not the end of the world, don’t find excuses and don’t celebrate it. Get into debt only for something that really matters (again, the mortgage example comes to mind), try to pay everything else without loans.
5. Don’t shop to feel better
Retail stores are doing a great job with trying to make use feel welcome. From nice music, to bright lights and helpful sellers, there’s nothing they won’t do to help us get into a better mood and get our money. Don’t shop when you are feeling sad, don’t shop tired or hungry.
If you face personal hardships (as most of us do), try to unwind in other ways that by sliding your credit card. Talk to a good friend, go to a therapist, work out, play with your kids, indulge with a box of chocolates, but don’t go shopping.
What other tips would you share to help us all with our saving money goals?