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Financial Friday #123: How to Stop Spending Money!
Last week in this newsletter we talked about how to start saving money and it came down to the ridiculously obvious solution of earning more and/or spending less. There are already tons of articles out there to help you get started, whether you are looking for a side hustle to boost your income or want to peruse a list of spending hacks to balance the household budget. We don't need to add to that mountain of information and for good measure, we linked a few in the "Resources" section below.
However, have you ever thought about alternative strategies for spending less rather than just the simple tips and tricks we see every day? For example, maybe your go-to coffee shop has a stamp-card type offer where you buy ten and get one free. Rather than focus on that future free one, maybe some other thoughts would help you skip that coffee altogether? You could try mentally calculating the cost of your monthly coffee habit into time spent working, or simply pausing to ask yourself, "do I really need it, or just want it?" More extreme methods might include removing the temptation altogether by taking a route that doesn’t pass by the shop or throwing away their stamp card altogether.
For life’s necessities we can compare prices, clip coupons, buy in bulk — these are the type of options for cutting costs — they are all very straightforward. For more discretionary spending, psychology is an important aspect when it comes to controlling urges. Spending can be triggered by a number of factors that affect are psyche — advertising and social media; comparing to our friends, neighbors or colleagues; habitual behaviour; lifestyle creep; the pursuit of happiness.
While it may be possible to limit your exposure and/or do your best to ignore these types of influences, there are financial self-control strategies that can really help put the bite on spending. A lot of research has been done on these strategies and while the original research papers are an in-depth read, this summary below has some pretty good ideas you could start using today.
At the and of the day, it doesn’t matter whether you save money through self-analysis and justification of spending decisions or by simply firing up the kitchen coffee maker every morning... whatever works for you! Rising inflation and higher prices don’t appear to be a short-term trend, so now is the time to dig-in on your expenses and maybe add a little anti-spending psychology to your financial game.