Jan 062018
 



Welcome to 2018 chumps and chumpettes. Is one of your resolutions to save more money? Well it is now. Here’s yet another “how-to-save-money” list with three ideas.

1 – AVOID LIFESTYLE CREEP


What’s lifestyle creep? Let’s say you just got a raise or won the lottery or found a sac of cash in a dumpster. You take this cash and buy luxury items. Soon enough the items are no longer a “luxury”, they’re just normal, and you think you can’t live without them.

For example, maybe you get a raise and the next day decide to get the $3 Starbucks coffee instead of the $2 Tim Hortons coffee. Or maybe your next car is the $30,000 Lexus instead of the $20,000 Toyota.

After the “honeymoon phase” with your new fancy toy (or habit) it will begin to feel like normal. To make things worse you’ll have trouble downgrading to whatever you had before. Hence the phrase “once you’ve had X you can never go back” <Relevant youtube link>

How to avoid it? Channel all that extra cash right into your investments. By definition a luxury item is unnecessary. I’d wager that retiring 5 years earlier or with a higher income will influence your long term happiness more than owning that fancy whatever.

2 – SELL ALL YOUR POSSESSIONS


You read that correctly. Sell everything! Think of all the money you’ll make! What’s that? You want a few things? Oh ok then. Maybe don’t sell everything. But you should probably sell some things. That’s what garage sales are for. What’s that? You don’t own a garage? Get on Kijiji or Ebay.

Too lazy for online sales? Try one of the many streamlined apps that were created for lazy sellers like yourself (yes I’m aware apps are also online). I’ve had success using the app “Letgo”. All you do is take a picture, add a price, and post it. Adding a description is optional. –The Letgo app is not giving me any money for this promotion. jerks.

Selling what you don’t use is a good start to undoing years of lifestyle creep. I believe everyone (myself included) could sell 40% of their belongings and barely notice. The problem is that the human mind is bad at assigning value. The saying “one man’s trash is another man’s treasure” is wrong. It should be “one man’s treasure is another man’s trash”. Sentimental value doesn’t necessarily mean the item is useful or worth keeping. Yes it’s difficult to sell your childhood toy, but is it really benefiting you sitting in that closet for years on end?

Furthermore humans are loss averse. We’d much rather avoid a loss than gamble on an equivalent gain. Your mind tells you that the pain of selling your beloved childhood tuba that you never play is far greater than the benefit of less clutter and more money.

In my own life I notice that I suffer from “maybe-one-day” thoughts. Maybe-one-day I’ll use that deck of cards, maybe-one-day I’ll need that extra air mattress, maybe-one-day I’ll find time to learn that keyboard. The truth is that keeping items in preparation for an imagined scenario is like planning for the zombie apocalypse. It’s fun to think about, but if you start collecting weapons and food rations you’ve left reality.

Did I convince you yet? Maybe? Well either way the next step is tricking your flawed brain into accepting an item is just clutter. Here are a few ideas for judging if something really matters:

1 – Flip all your hangers backwards. After using an item flip the hanger around. After a year sell/donate the unused items (excluding formal wear)

2 – Do the same thing, but for things. Put what might be useless in a “chopping block” box, after you use it transfer it to an “actually useful” box. Your thing doesn’t fit in a box? Tie a string, flip the thing upside down, unplug the thing, or put everything you own into a spreadsheet.

3 – Sentimental item? Take a picture, then sell. You can always look at the picture to get your hit of nostalgia.

4 – Get help. Do you have a friend who describes themself as minimalist? Or maybe you envy their tidy apartment? Ask them how they do it and emulate them.

 

3 – FIND WHAT MAKES YOU CONSISTENTLY HAPPY AND PUT MONEY INTO THAT

What? A recommendation to spend money? This post was supposed to be about saving money!

If you have followed any of the advice on this blog you should have a few extra dollars sitting around by now. But unless your idea of happiness is a massive swollen bank account you probably have other activities that you do for fun.

I’ve noticed in my own life that I start looking for ways to spend money when I get bored. And I mean the bad way of spending money. Frivolous purchases come from boredom. My mind is looking for direction and thus I’m more susceptible to advertising. Luckily I found a solution, invest in hobbies! That way I’m at least getting a consistant “happiness return” on money invested.

Maybe your hobby is cooking, Well you can spend money on things that improve the experience. That way you’re more likely to cook than eat out, thus saving money in the long run. A better knife, more interesting spices, or bigger kitchen will all make cooking more pleasant.

Maybe you like to spend time with friends and family. Spend money making your home more enjoyable to visit so people come more often. Comfortable seating, games/activities, music. If people aren’t comfortable they won’t want to visit. Yea that’s right, manipulate your friends into loving you!

Enjoy physical activity? Buy new equipment! Be careful with this one. We all know people who have a treadmill in their home but never use it.

You’ve heard the saying “spend your money where you spend your time”, but why not “spend your money where you gain happiness”? I’m going to go buy an extra video game controller.



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  2 Responses to “IT’S 2018 – HOW TO SPEND LESS AND BE HAPPIER”

  1. Really great article! I’ve been saving my unused kiteboard equipment to make for an easy escape from the zombie apocalypse, but you make some great points! I’ll sell and start planning an alternative, more cost efficient escape method. Thanks!

     

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