Because the Living with Less project has been so prevalent in our home in recently weeks, a great deal of conversation has centered on the concept of buying better but buying less. It's not a groundbreaking idea, but when you're out of practice, such discipline can feel like an earthquake is shaking your impromptu-spending freedoms.
Tips for Creating a 'Buy Better, Buy Less' Budget:
- Set a Goal: Do you know the item you want to purchase? How much money does it cost? When do you want to buy it? Knowing these two pieces of information helps you work backwards into the savings process. You now have an amount and a timeframe, so figure out how much you want to save each month.
- Be Realistic: Consider whether your goal is realistic. If saving for that handmade dining room table in three months time limits your budget so much that you're eating ramen every night for dinner, maybe reconsider your timeframe. Anticipating its arrival for July instead of May might be a better fit.
- Control Your Spending: Think twice before you spring for that coffee or expensive cocktail. Phantom spending is one of the biggest challenges to living on a budget: take all of those "little" expenses you incur in a month (yes, include everything, even that afternoon coffee) and figure out which were unplanned or unconsciously made. Those are your phantom expenses and they add-up. Once you see a list of your phantom expenses, you'll better understand how to control them. Another tip: If you're out shopping and see an item you love, ask yourself...do you love it more than that adored object you already own, the one serving the same purpose? If no, walk away. If yes, determine whether you need it now or if it can wait.
- Trial Period: Try working within this new budget for a month. How does it feel? Could you have saved more? Or are you frustrated that you didn't see those four movies last month? This is the time to tweak your timeframe.
- Keeping Track: When looking at your bank balance, it's important to know what money is savings and what is for monthly expenses. If you don't have a savings account to funnel your pinched pennies into, then keep a spreadsheet. Regularly update the data and stay on top of it!
- Planning Your Purchase: Think about the big purchase day. How will you pay for the item? If you have a credit card with a great reward program (points, etc.), use that for the purchase, then pay off the balance when it's due. If you don't have a rewards program that actually benefits you, get one! Make the most of your savings and purchases, stretch them! With the points you rack-up from your better purchases, you can save money in other ways: claim your rewards as Home Depot gift cards, for example.
Other suggestions? Questions or comments? Let us know!
(Image: Landis Carey)
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Landis, if that's your living room I love that wall color!
I'm glad you broached this subject! Thanks for these tips. I have been attempting to do just this in my own life. I'm slowly coming to the realization that I need to reprogram my mind. I've spent so much time responding predictably to evert new marketing campaign that I've come to think constant shopping is normal. I have a couple other tips to share. I have not successfully implemented them all (yet), but I will continue to try:
1. I'm a spender and a saver. I've had to "hide" money from myself in bank accounts that are not easily accessible. I have my savings and checking at separate institutions. I'm too cheap to use ATMs not affiliated with my bank so I tend to immediately transfer any extra cash into a savings account that takes a couple days to transfer into my checking account. This way I don't give into my urge to thoughtlessly splurge.
2. I have a hard time buying expensive things but have no problem buying loads of inexpensive things that add up to as much as that one expensive thing. I'm trying to change my mindset by thinking about the long term value of each item I buy.
3. I buy used when I can. The quality is often better.
4. I spend less time watching TV and visiting lifestyle sites that encourage covetousness.
5. I'm trying to rethink my hobbies. While caring for my home is a joy, "window" shopping should not be a hobby. Shopping to fulfill needs instead of wants is a more sustainable view in the long run.
Incorporating well made second hand might be another tip, search Craigslist before buying new!
The only thing I disagree with in this article is the idea of using a credit card to make a big purchase. A lot of the time companies will give you a reduced rate for not using credit (remember, credit cards charge them for the "privilege" of receiving payments via card, just like they charge you interest). Instead, I would recommend asking on the day you make the purchase if there are any special offers going on, if they will give you a cash discount (even if it's $5 that's still a discount!) and, if all else fails, simply congratulate yourself for not forgetting to pay the credit card off and ending up having to pay interest in the end. Happy shopping!
I love the color in this room. What is the color on the walls? I must have picked up 100 different paint samples and I can't find the right color but I think this might be it. Help!