I like to call myself a "professional saver", as in, saving money is a job as much as what you do to make money. Every dollar saved is basically a dollar earned for the future.
But I've learned from my own mistakes in getting to the stage of being a (more) successful "professional saver". So I've got a few tips to share about shopping, and shopping online.
Online shopping is dangerous in that it often has a snowball effect. Some people, when they go to get something online, are easily distracted and enticed by other items advertised, and end up buying much more than what they originally sought to buy. And what's worse, buying things they really don't need. This is a result of the common delusion that online money is not as real as real-life cash in a real-life store.
If you tend to be affected by this, get out of that mindset! Those numbers you're spending online could be used as real money to buy real things that you really need, or real experiences that will enhance and potentially improve your life.
Or for an even better solution, stop shopping online completely!
Try a challenge - can you go a week (or a month, or 6 months) without buying something unnecessary? This will help you figure out what you actually need in life.
If you're the kind of person who "needs" 50 pairs of shoes or handbags or all the latest gadgets, or even the most high-tech but unnecessary tools of your trade, and you're okay with being poor/in debt and unable to go places or have as many new experiences to be that kind of person, then fine, continue living that life. Congratulations, you have a lot of stuff. Unfortunately, anyone who envies you for it is probably really shallow, and actually, you must be too, to care about evaluations and admiration from shallow people. And maybe you don't mind that.
But if you want to change, if you'd rather have money to invest in new activities, seeing new places, learning new things, and seeing more of life and the planet we live on, then try challenging yourself. Become less shallow. And if you've tried already, take note of what hasn't worked for you in the past - chances are, what hasn't worked will continue to fail, so try something new.
While you are abstaining from shopping, you probably will still want things. And with the diminishing willpower and self-discipline of today's humans, (or pet hamsters), we need some techniques to help keep us from giving in.
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| The temptation... |
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| And the alternative |
But also, find an alternative to offer yourself. If you can manage to go this week or month without shopping, you can go do something you enjoy (as long as you're still saving money and not spending everything you've saved during the challenge period on your reward), like getting a haircut, going out for dinner, getting a manicure, giving yourself a few hours of free time to do nothing in particular, seeing a cool show or concert, having a movie/activity night with friends, anything that's a healthier alternative to buying stuff. And maybe at the end of the week or month you'll find that you don't actually care whether you get that haircut or go out to that restaurant, now that you've made it and have more money than you did before you stopped shopping.
When you start shopping again, or when a genuine need arises, schedule the time to go to a real store. Have a list or know specifically what you're going to buy, and pay in cash if it's an option. If you have a cash budget for your purchases it is much more difficult to overspend, and it makes you tailor your spending around the actual cash in your wallet.
DO NOT SHOP ONLINE unless one of these exceptions apply:
1. The product is necessary and unavailable to you.
In which case, get only that specific item online!
2. The product is over $10 more expensive in store.
Even as a professional saver, anything less than $10 savings is not worth the potential relapse into compulsive online shopping!
3. Shipping makes things more convenient for something you would have bought in-store.
For example if you need to mail a present to someone and you can get it shipped to their address with no extra charge. This saves work for you.
And here are my basic shopping and saving rules:
1. Don't buy anything if you don't have the real money for it - no credit cards!
Learn to delay your purchase gratification so you can wait until you can pay cash. You don't want to have payments to make long after your excitement for the thing you bought is gone.
2. Wait as long as possible before buying something
If the stores are 5-10 minutes away, you can replace something anytime, right? No point having a stockpile of things taking up space. And, sales come in cycles, just because it's on sale now doesn't mean you have to buy it now, unless it really some rare one-time special and it's an item you regularly use.
3. Use a list
This forces you to think about purchases beforehand, if only for the time it took to write them down. If you're about to buy something unplanned, take out your list and add the item to it right there in the store - this may even be enough to make you reconsider those not-so-wise impulse purchases.
4. If it's something you simply must have but really don't need, save money for it
For example, the latest shoes, technology, cookbooks, clothes, fitness gear, pretty much anything that's not food, bills, or a replacement for something that wore out. You do not really need these items, as you've obviously done fine without them so far. Put aside some money specifically to buy these frivolous items, while still staying on track with your other payments and savings account.
If you're starting a new activity or trying something new and think it's going to be something you'll continue and therefore worth investing in, try to budget for this as well, as in, try not to take from your savings but rather try to earn or save some extra money to cover this. When I bought my trumpet online, I used money from a gig I hadn't expected to get, so could keep my regular budget on track.
5. You NEED to have a savings account that you don't touch
This allows you to budget to save.
Personally, I have three accounts, and this works well for me.
One of my accounts is for everyday transactions, and I make all my payments from this account and receive all payments into this account as well, so I can then transfer what I don't need for expenses into one of my other accounts. This account does not gain interest, so I don't keep more money than I need in it.
My second account is my "safety account", which is an online account (usable for online transfers but not in person transactions). I try to keep enough money here for rent for a couple of months, or a root canal treatment. I had a root canal procedure last year and managed to pay for it without drawing from savings, because I had enough of a safety net. Consequently I'm still working on rebuilding it (root canals are expensive!) but it's an important account to have to keep your real savings on track. This account has a standard interest rate.
Lastly my third account is a savings account that receives a premium interest rate as long as no withdrawals are made, and more than $20 is deposited per month. If you make a withdrawal or fail to deposit $20 monthly, the premium interest rate is lost for that month. I've budgeted to put a portion of my income into this account every payday, and I also try to put a large percentage (if not all) of any unexpected windfalls in here as well. Of course I do allow for some frivolity and other planned purchases with unexpected money, as mentioned before, but it's always good to see any extra money as not in the budget - it's money you didn't earn with the intention of spending, so it's better not to spend it!
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