Americans are pretty adept at spending money, and 75% live paycheck to paycheck as a result. But changing our way of thinking about money can help us improve our financial outlook and drive us to make smart decisions that buy us the economic security we need. Here are five steps you can take to spend money more mindfully so that you end up wasting less of it.
1. Take stock of the things you already have
Many adults struggle to differentiate between needs and wants, but one way to get yourself on the right track is to physically take inventory of the things you currently own and compile a list of those possessions. This way, you might pause before buying an item that's already sitting in your closet.
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2. Research big purchases before jumping on so-called sales
There's something about the word "sale" that drives otherwise reasonable people into a purchasing frenzy. After all, no one wants to lose out on a good deal. The problem, however, is that slapping the word "sale" on a tag attached to an item does not mean that said item is being offered at a competitive price. The only way to really know if you're getting a good deal is to do your research and see if there's a better offer out there.
Will waiting to research a purchase mean potentially losing out on a sale? Perhaps. But chances are, you'll find an equivalent deal, if not a better one, if you really put in the time.
That said, sale items are only as good as your need for them. If your toaster oven breaks, snagging a replacement for $40 is far more economical than buying the same model for $60. On the other hand, if you have a perfectly functional toaster oven at home, buying one marked down to $40 isn't a great deal at all.
3. Wait 24 hours before making unplanned purchases
Have you ever walked into a store thinking you'll buy milk and eggs, only to come out with a $200 gadget 30 minutes later? It's called impulse shopping, and it's something that 84% of Americans admit to doing on a regular basis. The problem, however, is that those unplanned purchases can really zap your budget and cause you to fall behind on more legitimate expenses, like your car payment and rent.
A better bet, therefore, is to force yourself to wait 24 hours before going through with an unanticipated purchase. Holding off will give you a chance to reassess the value of the item you're tempted to buy and reevaluate how happy it'll actually make you, thereby increasing the likelihood that you'll come to your senses and stick to your original shopping list.
4. Don't worry about keeping up
In a world where if you're not on social media, you practically don't exist, there's a lot of pressure to keep up with the people around you. But that, in turn, could cause you to spend money needlessly and recklessly. In fact, nearly 25% of younger Americans admit that they feel pressured to spend like their friends do, while 15% acknowledge that they've spent money to make a good impression on those around them. But if you work on taking other people's habits and opinions out of the equation and go back to buying things solely because you want or need them, you'll be less likely to throw away money you can't afford to part with.
5. List your savings goals
There's something about committing your goals to paper that makes them seem all the more real, so rather than let those objectives float around in your mind, jot them down and post them somewhere they're apt to get noticed, like your fridge or nightstand. Having that list will help you stay focused and avoid spending money unnecessarily. After all, there's nothing like the words "home of my own" to make you rethink a $400 handbag or $900 phone.
Being mindful of your spending can help you go from financially unstable to economically secure. And that's reason enough to work on changing your line of thinking about all things related to money.
