Have you seen the commercial where one neighbor buys a new luxury car, and then the other does the same thing the next day? That’s what’s called, Keeping up with the Joneses. Did you know this compulsion to buy things you don’t need and may not be able to afford, is keeping so many of us from living within our means and saving for the future?
So what do you do if you haven’t stocked away anything or very little and now want to start saving? Is it possible to change spending habits to actually save money? I’m happy to say, yes it is! Here are some of my favorite tips to stop spending and start saving:
- PLAN BEFORE MAKING A LAVISH PURCHASE – Just like you would plan for a vacation, make sure you think and plan before making a purchase. I have a client who waits at least 30 days before making big buys. During that waiting period, he looks for a better deal on the item or realizes he doesn’t really need to buy it in the first place. Bottom line, don’t buy things you don’t need if you want to save money.
- PUT MONEY ASIDE – The only way to save money is to save it. The best way to do that is to create a budget and stick to it. Set goals for the things you do want and then when you make those purchases, go for the basic model, rather than the higher-priced deluxe model. In fact, according to a study in the Journal of Consumer Research, when faced with a choice between the basic and deluxe models of a product, you’re more likely to feel buyer’s remorse when you purchase the high-end version.
- TRANSFER YOUR BALANCES – According to the U.S. Federal Reserve, Americans hold approximately $5,700 in credit card debt per household. If you’re looking for a way to cut down on credit card bills, take a look at your credit card company rates. You have the right to negotiate your current interest rate with your credit card company. You can also transfer your balance to another card if you can’t get your current company to lower your rate. Depending on your current balance, that could result in hundreds of dollars in savings.
- RETIREMENT SAVINGS– I still don’t understand how people who have a company 401(k) match, don’t put in the maximum if they have the means to do so. To be honest, I like to tell people to estimate their retirement income needs and then put money aside every month to reach the goal, rather than set a certain percentage monthly. If you’re 40 or over, you may want to meet your company’s match. It’s best to talk to a financial expert, like Perry Greenfield of Wells Fargo Advisors. If you’re interested in speaking to him, email me or one of my team members here at Brigade Bookkeeping.
Keeping up with the Joneses doesn’t have to mean going broke. Share your time, knowledge and love with others, rather than competing against them.
