1. Spend a bit more
Before you call me stupid, hear me out. We are all humans and saving money is hard. Sometimes companies just make us too desired to spend money.
The solution: gamify saving.
Set a goal of how much money you should save at the end of the month. If you reach your saving goal at the end of the month, buy something which makes you happy. It could be anything but make sure it’s under 10% of the amount you saved.
Just imagine saving as a game. If you successfully win the challenge, you get a reward.
2. How long do you need to work?
Let’s say you want to buy a MacBook Air. Your job pays you around $15 bucks an hour. How long do you need to work to obtain the money to buy a MacBook Air? Here is some simple math:
$1.200 / 15 = 80
In order to get your beloved MacBook Air, you need to work 80 hours. It might be worth it if you are buying a laptop because it’s really useful. But next time you go shopping, think if the item is really worth you working x amount of hours.
3. Buy it tomorrow
Shopping releases dopamine in the brain which causes a feeling of well-being and happiness, I think we all know that. But another study found that the real dopamine hit doesn’t come from buying the item. It comes from the anticipation of buying the item.
So, instead of buying an object now, go sleep and wait for the next day. If you still want the object the next day, then you can go ahead and buy it. This prevents impulsive purchases.
4. Future Value
You are in your 20s and you are shopping. You walk across a bookstore and see that they are selling really cool objects. They have these feather pens which cost 10 bucks.
They are really adorable, but how much money would you have in the future if you hadn’t bought this feather pen. Let’s do some quick math:
We will invest the 10 dollars in the S&P 500. This index averages 10% annual growth. If you would just have held on to the 10 bucks and invested it for 25 years, it would be worth:
$120
Is that beautiful feather pen really worth $120?
5. Cash equivalent
Let’s take the example of the feather pen again. Would you rather have 10 bucks or the feather pen? See, sometimes we forget how much an object is actually worth.
TL;DR
Treat saving like a game. Reward yourself with something fun if you hit your savings target
How long do you need to work to be able to buy that particular object?
Would you rather have a feather pen of $10 bucks now or $120 in 25 years? Think of the future value
If you are thinking about buying an object, buy it tomorrow. The next day, you might not want the object anymore.
Would you rather buy the object or receive the cash equivalent of that?
Key message: Save more by implenting these easy tips because you’ll need the money in a recession