10 Lessons You Can Learn Today to Stop Overspending
How I Killed my Shopping Addiction
I grew up with a single mother. We were always running short on money. Even as a child, I could see that other kids had more than I did. You’d think children don’t care about money, but it’s all the contrary. Childhood is the time when you construct your personality while being sensitive to what other people may think. I was ashamed. I thought lack of wealth was affecting my value as a person.
My father, on the other hand, was wealthier. He started buying me stuff when I was a teenager. I would go home with better-looking clothes and a new phone. It’s not that I wanted to brag about my possessions, but I would be happy because I felt “more normal.”
This is where lies the root of my overspending problem.
My experience as a child led me to develop an unhealthy relationship with money, especially in my late teenage years. Yet something didn’t change: I was constantly feeling guilty about buying stuff. Every purchase was bitter-sweet. Spending money generated a lot of stress and anxiety.
Somehow I knew I had to do better with money. So I started consuming a lot of personal finance content. I studied finance through college books. I became dedicated to getting better at managing my finances.
This is what I learned on my journey to personal finance.
Save First, Spend After
Putting money aside should be the first thing you do after receiving your paycheck and paying your bills. Pretend it is a tax on your income.
As Robert Kiyosaki said, “Most people fail to realize that in life, it’s not how much money you make, it’s how much money you keep.”
Saving money will allow you to do something fundamental: investing. It might not be your priority right now, especially if your budget is tight. That is a mistake. Investing should be your priority, especially if you don’t have a lot of money now.
When you invest, the compounding effect grows your money exponentially, not linearly. You need to start putting money aside regularly if you want a chance of utilizing the compounding effect.
Make an Inventory of What You Have Before Shopping
Before going grocery shopping, I always check what I have left in the fridge and the pantry. It sounds normal to me, I hate wasting food. What I’m saying is that you should apply this principle to other areas of spending.
I can’t waste food because I was taught some people don’t have enough to eat. Well, that should apply to other things that can be wasted, like clothes, furniture, electronics, etc…
Should I really buy this? What will happen to this item if I buy a new one? Am I really going to use this? Ask yourself these questions before going shopping. Not only will you be saving money, but you’ll avoid throwing valuable things in the dumpster. Think zero or low waste, and sell or donate before disposing of anything.
Quality over Quantity
My Mom has stuff she kept for over 30 years. Most of them are wooden objects. They never broke, never got out of style, so she didn’t need to replace them.
Buying quality over quantity will always save you money in the long run. Look for things that are reusable, made in sturdy materials, and well built.
Buy Things That Can Be Repaired if Needed
Even quality object gets broken from time to time. So when you buy something, ask yourself if it can be repaired when it brokes. Can you change the battery on your electronics? Will components still be available five years from now? Are they standardized? Can you make that thing evolve with your needs (for example: can you add storage on your phone)?
Also very important: Can you fix it yourself?
You may be surprised by all the stuff you can fix by yourself. Learn to change the battery or the screen of your computer or the door to your washing machine. In doubt, check a tutorial on youtube to see if it can be fixed before throwing it away.
Buy Second-Hand
Thrift shopping is the most economical hobby I discovered. I used to think buying second-hand was not financially interesting. I was wrong. It gave me the opportunity to make higher-quality purchases in a world where quality is often reserved for an elite.
In addition, thrift shopping shields you from all the marketing surrounding the shopping experience, making it easier to avoid unnecessary purchases.
Adopt a Non-Superficial Mindset
Realize that wealthy people don’t necessarily look like so. The richest are often very frugal when it comes to shopping. Indeed, they want to leave behind a capital for their family, and therefore they invest most of their money.
Consumerism is a way of living. It doesn’t have to be yours. It shouldn’t if you want to become richer. Think about people who spend less than you do. Do you think they are less happy than you are? Did your last purchase bring you long-term joy, or was it just an ephemeral kick of dopamine?
Realize that You Are Surrounded by Marketing
You are brain-washed with advertising all day long. All you see online is marketing. Don’t get envious of influencers who brag about their possessions. Most of the time, they are part of brands deals and given away for free.
Learn that your value as a person is uncorrelated to the cost of your house or your car. People who learn this early in life have an unfair advantage over common mortals.
Spend on Things That Will Save you Money Later
It’s not only about investing. It’s also about purchasing something more expensive if it’s better quality or buying in bulk when you know you will need more later.
Think like if you were managing a business: business owners don’t spend money on stuff that is unnecessary for running their operations. They buy ,first and foremost, things that will bring value to their business. If they need to replace a computer, for example, they don’t buy the last, most appealing model. Instead, they would rather buy the most efficient one with the best quality-price ratio.
But Don’t Overspend on Something You’ve Just Started
If you are just starting something, like a new hobby, don’t buy the most expensive gear immediately, even if the quality is superior. Give yourself some time to practice first, and think about whether or not you truly like this activity. Plus, it will force you to focus on improving your skills.
I remember when I used to play music. I got myself a very cheap guitar. Even years later, when I had the opportunity to be gifted a better one, I refused. I didn’t think I was deserving it “yet”. This mindset forced me to improve until I thought it was really time to purchase a more expensive guitar.
You Should Have a Tighter Budget Even if You Can Afford More
Live as if you weren’t as wealthy as you do. You don’t need to adjust your living standards just because you are making more money. On the contrary, your budget should be tighter than you could actually afford. So think twice before raising your living standards. Keep your big purchases as a gift for yourself or your family.
Conclusion
I managed to put an end to my overspending habits by becoming aware of them. Become mindful of your own issues by making a list of the things you regret purchasing. I know I could have saved a lot of money if I knew what I do today. Now is the time to take action to prevent such mistakes from happening again in the future.
