I’m still determined to continue this financial journey to early retirement, but I know that it’s going to come with a number of sacrifices.
And I know “sacrifice” is technically the wrong word to use if you’re trying to reach a specific goal (something about how your mind plays with the word and starts restricting yourself and your body wanting to do it anyway), however I can’t think of the word I actually want to use right now.
Opportunity cost…? Maybe that’s the phrase.
Anyway, one of the main steps in achieving early retirement is saving money. Investing, yes. Making more money, heck yes. But it all means nothing if you don’t learn to save the money you have. And if there’s one thing I’m good at…
…it’s spending money.
Now, I said in an earlier post that I came across a quote that really shook me up: “We don’t buy things with money. We buy them with hours of our lives.” That quote really opened my eyes, and I instantly had this need to hold onto my wallet tighter than ever.
Don’t get me wrong, I still have a few slip ups here and there, but I’ve definitely come a long way from where I was. So here, I’ll be talking about my top 10 problems I have/had with money and what I’m doing to better myself. I hope that anyone reading this can hopefully learn from the mistakes that I’ve made.
Number 1: Seeing the word “Sale” makes my pockets itch.
I love to spend money, and for some reason I can always try to justify it if I see the words sale, clearance, bogo, and so on. Studying psychology has really helped me to remember that these words are meant to make customers think that they are getting a bargain for what they see. To the retailer, it isn’t about making us think to spend none vs. some, it’s about making us think we’re spending less than we would have had we not seen the sign in the window.
Some of the time, these signs aren’t meant to make us purchase what’s left of a thing or clear out the store. Sometimes they’re actually there just to put the idea in our heads that we need a thing now. And when it comes down to it, do we really need it? Really? Because if we needed it, we most likely would have already had it before we saw it was on sale.
Number 2: I tend to use my debit card more than I use cash
To some people, a debit card is the same as cash because a debit card is linked directly to a checking account. The real difference is that using cash forces you to see just how much you’re spending as opposed to just swiping and heading to the next destination.
My mother always taught me to carry cash on me so that I know just how much money I’m spending in a day. Not gonna lie, I’m still not the best at this, but I have gotten better. I admit that it’s so much easier to swipe and go, but it’s also easier to forget about how much money I spent and how much money I have left. I tend to try to only have $20-50 on me at a time and limit myself to what’s in my pocket for as long as I can. It suddenly becomes more real when you’re constantly running to the bank to pull out another $50.
Number 3: If I’m out, money needs to be spent
I’ve had this problem since I was in high school, though I’ve gotten much better at it.
For some reason, in my mind “going out” is a synonym for “shopping”. I don’t mean going out specifically to purchase something, like lunch or the movies.
I mean the family can go thrifting and I suddenly find the need to buy out the store. As a matter of fact, we did just go thrifting not too long ago and I saw a gorgeous, fully functional classical acoustic guitar for only $45. It took everything in me to put it back…
Again, I’ve gotten better at this, but it’s still a pretty bad habit I need to break. Just because you’re out doesn’t mean you need to spend money, right?
Number 4: I don’t look at prices
Yeah, I said it. Don’t judge me.
I think I get this from my mother, who has tastes far superior to mine. I will glance at the prices on the menu or get a sneak peak of the price tag before I buy an item, but more than half the time it’s to know how much I will be swiping, not exactly how much I’ll be spending.
Now that my parents have given me a few bills to pay, I’m suddenly much more aware of just how much I’m spending. I’m now known for double checking the price tags of everything before I spend my money.
Number 5: I don’t use coupons as often as I should
This is much different from Number 1. In Number 1, I was specifically talking about walking up to a store, seeing a sign, and thinking, “Hey yeah… I do need that thing I’ve never thought about until just now.”
Here, I’m mainly talking about trying harder to save money where I can. The thought of clipping and saving coupons has always intrigued me, but let’s be honest: I don’t do it. I have, however, started doing surveys a few years ago and it’s even helped me get some things for free.
Number 6: I pull from my savings for stupid stuff
If you can’t pay cash for it, you can’t afford it. Period.
One of my biggest mistakes I’ve ever made was pulling from my savings when it wasn’t an emergency. I’ve pulled for some pretty stupid stuff: fast food, yoga equipment, clothes, jewelry, unnecessary hair care… I’m not proud of it.
Once I made my decision to be financially free, I didn’t touch my savings for about 2 years and continued to add to it. It looked so beautiful… until I moved that is… But at least I pulled for an emergency. I plan to build it right back up and continue to do so without touching it if I can help it.
Number 7: I impulse buy
This was my biggest problem from ages 15-20. That’s a good 5 years of savings that I wasted simply because I loved to shop for things I didn’t even need. The only things I spent a ton of money on that I never regretted was books. I can’t get enough books in my life. But I could have done without that pair of green combat boots or that brass hair clip I ended up losing or that second copy of Jane Austin’s “Emma” simply because it had a different cover than the one I already had…
My problem with impulse buying has greatly improved, though I do catch myself telling myself that I need something when I really don’t. The only difference between then and now is I don’t whip out my debit card when the temptation comes.
Number 8: I talk myself into buying things I don’t need
This is actually a lot easier than I thought it was. Talking myself into something, I mean. I can suddenly find a reason to buy anything, whether I needed it now or later, simply so that I can spend the money I just earned. I don’t know why more stuff is the equivalent to success in my mind (most likely because Americans are conditioned to think that way), but they aren’t the same thing. Instead, I end up with a bunch of crap, nowhere to put it, and a very sad checking account.
To this day, I can find a way to tell myself that I need a thing, but I thank God that I keep that quote in the back of my head to remind myself that even if I think I need it, I really don’t.
Number 9: If I don’t like it, I throw it away
So what happens after I accumulate all the crap that I purchased just few months ago? Well I look at it. And I continue to look at it. And I forget why I bought it. I realize that I don’t need it nor do I want it. And I throw it out.
Why did I throw it out?
One of my biggest problems is keeping up with receipts. If I had taken back that thing that I bought (even though I shouldn’t have purchased it in the first place…), I could have saved myself so many times when I found myself in a financial bind. I’m not really one to use sites like Ebay or Etsy, so I ended up losing a lot of money this way. I do try to give away things I know I can’t or don’t use to Goodwill to get a tax write off, but that’s about it.
I’ve gotten better at this simply because I’ve learned how to withhold my spending needs when I’m out. But when I do end up buying something and regretting it, I always have my receipt handy if I need to return it.
Number 10: I shop when I’m bored
One of my favorite pastimes is going on modcloth.com and saving items for my dream wardrobe. I can’t afford about 90% of that site, but it’s always nice to dream.
Until I find a cheaper option somewhere else. Next thing you know, BOOM! I just spent $150 on whatever.
I’m pretty good at staying online and comparing prices, all the while telling myself that it’s all okay and I’m getting a better deal here and this site has free shipping and blah blah blah. All that happens is I end up spending more money than I should simply because I couldn’t keep my hands busy with something else.
Overall, my main problem with money is that I’m spending too much of it. But I’ve gotten better by really just learning about myself. It isn’t always fun or comfortable to acknowledge these things about myself, but doing so has helped me have a bigger savings, a wiser outlook, and a better understanding of just where my money is going.