Spend less than you earn.
That's it. The most important financial advice you'll ever receive.
If you cut back on spending, you'll be able to pay off debt, build an emergency fund, start saving for college or retirement, give more generously. Spending less could reduce your stress levels and improve your sleep. It might even improve your marriage.
Spend less enables us to do all of that. But in a country where 78% of us live paycheck-to-paycheck and the average American has $6,929 of credit card debt, the message to spend less is clearly not getting through.
Maybe it's a difficult step to take because the idea sounds unattractive to so many. Buying less sounds like taking a step backward in life. In a culture where success is often measured in terms of material possessions, spending less sounds boring, old-fashioned, and destined for ridicule.
I own a lot less than I used to. I have more time and money available to me than ever before. Because I own fewer things, I spend less energy cleaning, managing, and organizing. I spend less time shopping. I have more opportunity to pursue my greatest passions in life, however I decide to define them.
But there are some areas where I still struggle with spending too much. I can't pass up a book store, and my husband and I eat way too often in restaurants.
My weaknesses may be different from yours, but maybe there are some strategies that can help all of us.
9 Ways to Stop Buying So Much
- Track your spending. Many people make this suggestion, and I've tried it several times, only to become bogged down and give it up after a few weeks. What finally made it a useful strategy was to track spending only in one problem area (for us it was eating out). This is much easier, and I've done it for four months now. Seeing in black and white how often we eat out (five or more times every week at the beginning) and how much we spend (over $1,000 the first month) gives us all the motivation we need to practice some self control.
- Don't look for ways to save money on items you don't really need to buy in the first place. When I get a coupon for 25% off any item at my favorite book store, I suddenly feel a compulsion to buy, even if I don't have a particular book in mind. (Of course, that's why the store gives coupons in the first place!) Instead of looking for deals, rewards, or other ways to "save," just don't shop in the first place. Stick with the couch you already have, the clothes you already own, and the car you just paid off.
- Eliminate cues that trigger the habit of shopping. Unsubscribe from store emails. Unlike brands on Facebook. Change your route home if you drive by a store or restaurant you tend to visit (that's something I need to do). You get the idea. Out of sight, out of mind. By not having the visual reminder, you can change your routine and break your habit.
- Redirect the time you spend shopping. Minimalism isn't just about having less stuff and clutter and spending less. It's also about having more time to do things that add value to your life. So instead of spending time shopping, take the time to learn something new, to connect with a friend, to get more exercise, or to pursue a hobby. Spend time riding your motorcycle rather than buying accessories for it. Spend time creating art rather than shopping for the latest décor. In my case, I could read the unread books I already own before buying more.
- Use the "three day rule." Impulse buying will always blow your budget. Notice what you see and want to buy, and tell yourself that if you still want it in three days you can come back and buy it guilt-free. Do you even remember it three days later? Or does your sudden "need" dissipate during that time?
- Start with a fixed amount of cash each week. Pay bills online or with a check. The cash is for groceries and other food, gas, and incidentals. Challenge yourself to make it last.
- Don't carry a credit card. This is a corollary to #6. Keep your credit card at home where it can't be whipped out on impulse. (I seal mine in an envelope and file it with my credit card statements.) You can always retrieve it for a true emergency.
- Plan ahead. My husband and I eat out less if I have dinner planned. It's just the two of us, so when I cook I make dishes that serve four or six, since we'll be more likely to eat at home if dinner is just reheating plus making a fresh salad and thawing some frozen berries to eat over plain Greek yogurt drizzled with honey. To curb spending on clothes, for example, take time before each new season to look at what you already own, and plan to purchase only what you need to fill in gaps, such as new sandals, a handful of tank tops, and navy capris to replace your faded, stretched-out pair.
- Say no to lifestyle inflation. Lifestyle inflation is the tendency we all have to increase our spending when income goes up. When we do this, it remains impossible to get out of debt, save, invest, contemplate changing careers, or work less. It forces you to keep working just to pay the bills. A lot of people justify spending by saying, "I work hard, so I deserve this." Don't be one of those people! What you deserve is less debt, less clutter, less stress, more time, and more long-lasting satisfaction. What you deserve is financial freedom.