Finance

The Fine Art of Frugality…Continued

A couple of weeks ago I gave four tips on how to be a little more frugal. Well here’s two more just in time for the holidays…that is, if you have any money left to save after Black Friday, Small-Business Saturday, Cyber Monday, Giving Tuesday…….

1. Save on the Big Stuff

Put focus on saving money on the big ticket items. Kijiji and Craigslist can save you hundreds of dollars on furniture, cars and appliances- most of which are in perfectly good condition. It’s typical that we fret over whether to buy the name brand or discount can of beans, but the next day buy a brand new TV for $1,200 when the same one on Craigslist is $500.

As a nice bonus, buying second-hand means you’re also buying a product that simply needs a new home rather than a new off-the-shelf item that had to be produced.

TRY THIS – Before buying anything, even if it’s just something small like a new computer mouse or knife set, do a quick Craigslist search. You might be surprised to see someone just down the block is selling that item! It’s a win-win: you made that person’s day by handing them cash and taking their unwanted item, and it saves you money.

And get creative: concert-tickets, carpooling to the ski hill, guitar lessons, it’s an amazing resource.

2. Rewards Points can be Bad News for your Bank Account

Avoid placing too much focus on collecting rewards points like Aeroplan and Shoppers Optimum points. This goes especially for Canadians who are some of the biggest points collectors in the world!

Remember, companies aren’t dishing out these points for just your benefit- they know it creates a subconscious consumer mindset of ‘if I spend my money at your store, I get rewarded.’ I’d bet pretty heavily that we’re spending upwards of hundreds of $$$ more every year to eventually earn enough points for a flight (which you still have to pay the taxes on).

Let’s say for example that 15,000 points gets you a free flight, and your credit card gives you 1 point per $ spent. That means you need to spend $15,000 for a free flight! I realize you’re spending a portion of that anyway, but likely the points mindset is causing you to spend more than you need to…much more than that $500 flight cost.

Instead, focus on just buying what you need, when you need it, then invest the remaining. Think outside the box to save money for a flight. It’s not as effective financially to buy gas only at Esso to earn points, but instead to think, how can I lessen the amount I drive? Can I ride my bike more often for small errands? This will pay you exponentially better than racking up Aeromiles on your credit card.

And lastly, especially at this time of year, always remember:
“The more we seek satisfactions in material goods, the less we find them there,” [researcher Richard] Ryan says. “The satisfaction has a short half-life—it’s very fleeting. People who put money high on their priority list are more at risk for depression, anxiety, and low self-esteem.

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