This simple exercise—thinking about time used on a specific day (you can choose your favourite weekday)—helps us make less biased predictions about how much any one thing will influence our happiness.
If those thoughts about next Tuesday don’t make you happy, don’t buy what you impulsively so much desired.
2) The Spillover Effect: Avoid special offers. Chain stores love to make you feel like you are getting a great deal as this makes you buy more than you need.
When you see low priced special offered goods, your rational brain tends to go soft with gratitude at the shop’s generosity. And this surge of positive emotion makes you want to return the favour, by splashing out on unnecessary items.
Try frowning before making your next decision. Yes, that might sound a bit strange, but frowning apparently increases the vigilance of our “Slow Thinking Mode”, resulting in a more logical conclusion, overriding intuitive, instinctive, and emotional decisions.
3) Make It A Treat: The single greatest thing you can do to change your life today would be to start being grateful for what you have. Generally, the higher your level of gratitude, the lower your level of materialism. Be conscious of what you have.
For example, food: Try next time to eat your food with your non-dominant hand. By that, you free yourself from mindless consumption, saving you money as you would buy less food.
4) Don’t Pay with Credit Cards: Because the pleasure of consumption is purest without the experience of paying for it, anything we can do to separate payment from consumption can enhance the pleasure of the purchase. Many people solve this riddle by consuming immediately and paying later; forgetting that while paying later solves one problem, it creates another later.
Those pieces of plastic provide anaesthesia against the immediate pain of paying and as a result, we pay/spend more than if we would use cash.
When researchers asked people to estimate their credit card expenses before opening their monthly bill, every single individual underestimated the size of their bill—by an average of almost 30%.
When you use credit cards, do ensure that they either give you high cash rebates or a high bonus system for rewards that you need (like Frequent Flyer Miles, if you have to travel often).
5) Pay with Cash: You spend averagely 23% less than if you use credit cards. Additionally, make use of the “denomination effect“—which causes us to be less likely to spend large bills than their equivalent value in small bills—and keep mainly large bills in your wallet.
6) Do Not Fall for this Trick: “Economies thrive when individuals strive, but because individuals will only strive for their own happiness, it is essential that we mistakenly believe that producing and consuming are routes to personal well-being.”
There are undeniable parallels between the drive to acquire consumer goods and the contemporary rush to achieve self-fulfilment.
Consumerism, however, fails to produce happiness beyond a 5 minute rush when purchasing (and the guilt soon follows, particularly in our current debt based economy).
Think about this fact, before you buy something non-essential, in order to fight oniomania (buying addiction).
View money and things not as something you create to fill a lack, but as tools to help you more fully express yourself and realize your potential.
7) Look for the Non-brands: Buy non-branded goods that come entirely stripped of prestige. This is where saving money requires closing the gap between your ego and reality.
Don’t spend lots of money on material stuff to impress other people as you will soon realise that those people couldn’t care less about you. You’d be shocked by how few people really care what brand your purse is, where it was made, or how much noise your car makes.
Don’t be one of those who have jeopardized their own pursuit of wealth or financial independence for the illusion of looking wealthy, instead of being wealthy (=being able to live your life in your own way).
8) Enjoy Leisure Activities optimally: The more money you spend on leisure activities, the less you would enjoy them.
Have a good time going for a hike, a bike ride, a swim, reading a book, or anything else that’s free (or cheap). Having cheap hobbies is a large, yet hidden asset on your personal balance sheet. Spend your money on experiences, since the best things in life aren’t things.
9) Imitate, daily: You will get rich by imitating the mindset of the wealthy, not by imitating their spending. Like many prosperous people do, ensure that most of your purchases are planned. Generally, the longer the planning timeframe before a purchase, the less you will pay.
And when you are tempted to spend to impress, remember that those whom you’ve impressed will not be there to bail you out when the good times end. So, why bother?
10) Become a Sherlock Holmes to discover Discounts: The rule of thumb with discounts is to always check for discounts on purchases that you have budgeted for, but never buying something that you haven’t, just because it seems like such a good deal.
Learning how to use discounts and offers—without letting them use you—is one of the keys to financial literacy.
10.5) A basic rule that always works is to ask yourself this simple question whenever you reach for your wallet: Am I getting the biggest happiness bang for my buck?
When you spend less than you earn, you simplify your life, and this alone can bring you peace of mind.
I am sure that there are many other ways how you—personally—curb your expenditure, so do share them in the the comments section below.
“Beware of little expenses; a small leak will sink a great ship.” — Benjamin Franklin
“I’m not real frugal or thrifty, … I just don’t waste money on little things that don’t matter, but spend on big things that do.” — Brian O’Reilly
“We make ourselves rich by making our wants few.” — Henry David Thoreau
“The wisdom of life consists in the elimination of non-essentials.” — Lin Yutang, author
“I have enough money to last me the rest of my life, unless I buy something.” — Jackie Mason