During my first go-‘round in University as an undergrad, frugal spending habits kept me afloat until I graduated and got a job. But it was only a few years of a steady pay-check before those habits mysteriously vanished. Strange how that happens, right?
Well it’s been a great slap in the face having recently returned to University and feeling those empty pockets once again. Here are a few habits that are time-tested for me; I’ll see if I can successfully maintain them when I’m back at work again.
1. Think of stuff as costing time, not money
“The cost of a thing is the amount of what I will call ‘life’ which is required to be exchanged for it, immediately or in the long run.”
― Henry David Thoreau, Walden
Henry David Thoreau, the master of good quotes, sums it up perfectly. What if, instead of thinking of an item as costing ‘X’ dollars, we think of it as ‘X’ hours of our life we needed to work in order to earn that money? Let’s try an example:
Let’s say a jacket we want costs $84.
We make $18 an hour at our job (after tax that’s probably like $14 cash / hour)
$84 / $14 = 6 hours of our time
That means that jacket doesn’t really cost $84…it costs 6 hours of your life! Is that amount of time worth something you likly don’t need? We’re paying for ‘stuff’ not necessarily with money but with ‘life’ we needed to earn that money.
This is how many people get stuck doing jobs they don’t want to do- they get on the consumer treadmill where they trade life for stuff and then need to commit more life to pay the bills. If we can just simply avoid buying excess stuff, we don’t need to work as much.
2. Take money out in cash for large purchases
This is exceptionally effective for impulse buying, where instead of leaving the store with something you stumbled across while strolling the aisles, you have to go to the bank and take out the cash and return. This has two benefits:
1. Once you see all those hard-earned bills dispensing from the machine, you may re-decide your purchase.
2. It allows time for the idea to stew in your head for a while, in which time you might decide it’s not necessary.
Remember: credit cards create a disconnect in our minds, encouraging us to buy without physically seeing that hard-earned money leave our pockets.
3. “A penny saved is worth a lot more than a penny earned”
This isn’t so much of a habit as it is a mentality. You know the phrase “A penny saved is a penny earned?” Well a penny saved is worth way more than a penny earned because you paid tax on that earned money! For example, if you have $10 cash in your wallet, you had to make about $13 at your job to get it there. And if you don’t buy a $50 sweater, you’ve really saved $50 after-taxes, meaning you’ve actually saved upwards of $70 that you earned at your job.
Not to mention, any product you purchase may require maintenance, storage, replacement, repair and/or cleaning. So at the end of it’s life it may have cost well over what you paid for it.
4. Try a No-Buying challenge for a month or even a year
On a couple of occasions now, my wife and I have set ‘No New Things’ challenges for up to a full year. I have everything I need in my life, so there is no reason I would need to buy any material items. That being said however, we are allowed to replace something that has worn out.
It works great so far: I wanted this beauty pair of shoes last week, but Andrea said to me “if you buy those shoes are you willing to throw away your old ones?” My shoes still have lots of life in them and I hated the idea of throwing perfectly fine shoes away, so it instantly stopped my desire to buy the shoes.
It’s a great feeling- once you stop buying stuff you immediately appreciate what have more, and you almost feel silly for falling for the evil corporate marketing people that make you want to buy things you don’t need.