spend less Archives | MoneyDigest.sg

Spending Less is as Important as Earning More

Earning more money is undoubtedly appealing, but it’s only part of the equation. What many people overlook is that controlling your spending is equally essential, if not more so, for achieving financial stability and success.

Let’s explore why spending less is just as crucial as earning more and how this simple approach can significantly improve your financial situation.

#1: EMPHASIZE SAVING

Developing the habit of spending less than you earn is a powerful financial strategy that should become an integral part of your lifestyle. By doing so, you create the opportunity to have extra cash at your disposal, allowing you to save and invest for your future. Moreover, it acts as a safeguard against accumulating unnecessary debt, which can burden you for years to come.

Image Credits: unsplash.com

If you find yourself unable to implement this habit immediately due to your current situation, don’t fret. As soon as you become capable, make it a priority to pay off any outstanding debts, freeing yourself to focus on saving money for the future.

#2: UNDERSTAND THE VALUE OF DOLLAR

One essential aspect of spending less is recognizing that every dollar you earn is not entirely yours to keep. Taxes and other expenses take a considerable bite out of your income. In fact, to have one dollar in your pocket, you may have to earn closer to $1.30. This means that approximately 30 cents of every dollar you earn goes towards taxes and various costs.

#3: MIND YOUR SPENDING HABITS

Imagine trying to fill a bucket with water while it has holes in the bottom. No matter how hard you work to pour water into it, the effort would be futile, and the water would simply leak away. Similarly, focusing solely on earning more money without addressing your spending habits is counterproductive. Before pursuing ways to increase your income, it’s crucial to plug those spending leaks, ensuring that your efforts bear fruit.

#4: GIVE EVERY DOLLAR A PURPOSE

Doubling your income might sound like the ultimate financial goal, but it won’t guarantee success if you lack a proper financial plan. Whether you choose to cut back on expenses or boost your earnings, it’s vital to give every dollar a designated purpose before the month begins. Creating a budget and allocating funds for specific goals will guide you towards financial prosperity.

Image Credits: unsplash.com

By following this approach, you’ll find that dreams like traveling the world, saving for a new car, or buying a house become attainable realities. So, take the reins off your finances, strike a balance between earning and spending wisely, and watch your financial aspirations come to fruition faster than you can say “budget!”

Sources:1 & 2

3 Brain Traps That Make You Spend More

Our brains are hugely interesting yet highly complex. Although it may seem like you have everything under your conscious control, your unconscious mind can play some tricks on you. It may trap your judgment with errors called cognitive biases. Cognitive biases are flaws caused by memory, statistical, and attribution errors.

Understanding and recognizing these biases in yourself is useful when managing or spending money. Awareness of these biases is the first step!

1. STATUS QUO BIAS

As I was looking for a new laptop online, my choice leaned towards the brand that I have been using for more than 4 years – the MacBook. Its competitor had touch screen, 360 bendable monitor, and is running on the new Windows software that enables you to download countless of Apps. For its specifications, the latter was the best choice but I still preferred the Macintosh.

This cognitive bias is called the Status Quo Bias. It occurs when you prefer a product that you know and had been using for a long while even if there is clearly a better option available. It maintains the status quo and avoids change.

2. FAMILIARITY BIAS

Similar to the Status Quo Bias, Familiarity Bias exists when you prefer the products and services that you are exposed more of. Are you only buying something for this reason? I hope not. Often smaller companies that are not able to afford costly advertising provide cheaper and more innovative products.

Image Credits: pixabay.com

3. ANCHORING BIAS

Anchoring bias occurs when you rely and focus heavily on the first piece of information you receive. This can potentially dictate your spending habits.

For instance, the first “Moroccan Argan Oil 200ml bottle” you saw online was worth S$100. Without knowing that retailers spend money on ads for their premium products, you quickly established a high benchmark. You are more likely to spend more than you would have if the very first product you saw in the search engine was worth S$20 (a real bargain)!

Instead of getting sucked into the effects of these biases, use your brain to your advantage by employing tricks to spend less and save more.

Sources: Time.com and Psychology of Love, Money, & Life (eBook)

Extend The Products’ Longevity And Save More Money

Stretching the use of a product as much as possible will not only reduce waste but also save you a couple of dollars. These hacks ahead will help you extend the lifespan of your soaps, printer inks, laptop batteries, and more.

1. SAVE MORE BY SPENDING LESS

The basic mindset that you should adopt is to regulate the consumption of household products. For example, to ensure that you would not waste your dishwashing liquid, use an olive oil bottle as its container. Just make sure to label it correctly to prevent confusion.

2. BE WISE WITH SOAPS

Use only the necessary amount of soap. No more and no less. If you are using a hand soap dispenser and there are still left over soap at the bottom that you cannot squeeze then, add few drops of water inside by unscrewing the top. Use this leftover soap before refilling it.

3. USE FONTS THAT HELP SAVE PRINTER INK AND TONER

If you want to save money on printer ink or toner, one thing you should do is to change the font size and the fonts that you use for printing. Ecofont, Century Gothic, Times New Roman, Garamond, and Courier are some of the fonts that naturally use less ink. Also, you can print fewer pages by converting the file’s format to PDF.

4. MAXIMIZE YOUR LAPTOP’S BATTERY LIFE

A few steps can maximize your laptop’s battery life (i.e., the amount of time your device spans before it must recharge). You may bring down your screen’s brightness, turn off the Bluetooth connection, and calibrate your battery every 2 to 3 months. To calibrate your battery, follow these simple steps. For MacBook or Apple laptop users, Apple suggests to upgrade to the latest software as the updates often include advanced energy-saving technologies.

5. STRETCH THE USE OF YOUR DISPOSABLE RAZOR

Disposable razor maybe cheap but if you have to constantly replace it, is it really worth it? The good news is that your may extend its use by keeping it sharp. To maintain its sharpness you can try to rub the razor backwards across an old pair of blue jeans. Also, always dry your razor after use.

Image Credits: wikihow.com/Make-a-Disposable-Razor-Last-Longer

Sources: 1, 2, & 3

Fantastic Tricks To Help You Spend Less

Often you feel confident to change your shopaholic ways. Then, you find yourself stuck with your old and impulsive patterns. The good news is that, it is never too late to change. You can outsmart your mind by tricking it with these simple ways…

1. AVOID SHOPPING WHEN YOU ARE FEELING H-A-L-T

Four common emotions that lead you to overspend are hunger, anger, loneliness, and tiredness. You must not shop hungry in a grocery store because you would end up buying everything that satisfies your hunger. Same goes for other aspects of shopping, it is best not to shop angry, lonely, and tired.

2. HAVE A 7-DAY MENU PLAN

Are you one of those people that take long in deciding which meal to cook every night? Menu plans will not only save you time but it will also save you money. If you have a menu plan for your meals throughout the week then, you would only spend money on the items that you really need. More so, you will be able to manage your calorie intake to live a healthier lifestyle. Here is a sample 7-day meal menu plan by Anytime Fitness:

3. SELECT A CLEVER PASSWORD

For the shopping websites that require you to log-in before purchasing, I suggest to use clever passwords related to your long-term goals such as Need$4NewCar or $ave4HOLIDAY. This way, every time you type your password in, you will be reminded to think twice before spending it.

4. WALK OR CYCLE AROUND

Instead of spending money on petrol, walk or use your bicycle around the streets of Singapore. Running errands will not only serve as a good exercise, but it will also make you spend less.

5. NARROW YOUR EXPENSES

When it comes to spending less, do not try to be Jack-of-All-Trades. Instead, narrow your expenses by focusing on two categories that you spend more of such as dining out and groceries. Cut down these expenses by 20-30%. You will feel less overwhelmed and more motivated afterwards.

6. SHOP WITH HIGH-HEELED SHOES

A 2013 study showed that consumers who wore high-heeled shoes are more likely to spend less as they are more focused on maintaining their balance. The effect is the same when you shop after a relaxing yoga class.

Image Credits: Victor Tongdee via Flickr

Follow your 2015 New Year’s Resolution and do your best to spend less and save more for your future! 🙂

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