If you’ve ever wondered what are the best ways to save money fast, this article is for you.
Saving money has been a challenge for many people but by understanding how our brains work and using a few psychological tricks you can get yourself ahead of the average person when it comes to saving money.
What Are The Best Ways To Save Money?
1. Use cash
Humans are very motivated by not losing things. We naturally do not like giving up things that we already have. When you use cash you feel like you’re giving away something that you have. But when you pay with your card you still keep the card and your brain doesn’t have the natural feeling of losing something. It is harder to hand over ten $20 bills when you buy those cool headphones than it is to swipe a card. If you only carry big bills who wants to break up a nice hundred dollar bill for a little pack of gum.
The second is to…
2. Automate your savings
I know I know, saving money can be difficult especially if your expenses always seem to keep up with your income. This can make it really hard to say. But by automating a portion of your income to go straight to your savings will make it much easier for you to save money because well you don’t have to do anything and our brains are very adaptable.
Chances are that after a couple of months you won’t even know is that your putting away that 10% of your income. Your brain will naturally adapt.
3. Eat before going shopping
I’m sure this has happened to you – you go to the grocery store hungry and you end up buying things that you absolutely do not need. By eating before going to the grocery store you will limit your hunger driven impulse purchases.
4. The 30 Day Rule
When you feel the impulse to buy anything make the conscious effort to wait thirty days before buying it. When you do this a few things will happen – you reduce emotional impulsive buying and this is great because it works immediately but if you do this consistent enough this will actually become a natural behavior. So when the feeling of purchasing something begins to happen your natural behavior will be to wait. And chances are that you won’t feel the desire for that product anymore after you’ve waited for 30 days.
Normally when we want to buy a product is because that product is probably pretty popular at the time. Meaning it is at a peak price so even if you wait for 30 days and you still wanted chances are you might be able to buy it at a reduced price.
5. Give your savings account a meaningful name
If you do this you will be surprised of how powerful this little hack can be. If you’re saving money to invest and grow your wealth or for your kids college education giving your savings account a meaningful name will make it much harder to take money out of that account.
By naming your savings account after your daughter, for example, you are attaching
emotion to this account and it’ll make him much harder to cash out. I mean think about it.
If you have a savings account named after your daughter or your mom you don’t want to hurt it. And if you purposely attached motion to this account, for example, if you’re building your wealth account and you name it after your daughter or your mom because the purpose of this money is to one day allow you to provide better for them. Now this will make it even much harder to cash out.
6. Avoid advertising
As much as possible! I know in today’s world it’s pretty much impossible to get away
completely from advertising. I mean simply going to the grocery store and walking by the checkout line you are being advertised with many different products. And the truth is companies pay a lot of money to hack the psychology of the consumer to make them want to buy, so staying away from them altogether as much as you can can be very helpful. Think about it. A lot of the products you buy are because you saw a form of advertising.
7. Convert money into time
Whenever you see something that you want look at the price in terms of time. If you convert the price of those $85 sunglasses to how long you would have to work to pay them would you still buy them. Are the glasses worth losing seven or eight hours of your life? This will give you perspective on what you are actually spending and what it takes to earn it by thinking of the time that you’re spending into this product.
I mean, are you willing to give up a hundred and sixty hours of your life for a new TV? Or
is there something better you can spend your money?
8. Create a meal plan and a list before going grocery shopping
By knowing exactly what you need can help you avoid buying things that you don’t need or buying too much or while you do need. When you have a meal plan you have a good idea of how much you need of each unit so this way you don’t buy too much of it and have it go to waste.
Plus, having a list will help you spend a much less time at the grocery store and prevents the hassle of going back because you forgot something. And spend less money because the more that you go to the grocery store the more you tend to spend.
9. Creating a monthly income statement and track your expenses
When you write down how much money you’re making and how much money you’re spending gives you an insight of where your money is going. Simply by knowing where and how you spend your money will help you be more conscious on your spending. And it
doesn’t have to be complicated. You can simply split a piece of paper I personally do it in a whiteboard into two parts: one is for your income and another one is for your expenses.
Then you simply keep track of how much money you’re making on one side and how much
money you’re spending on the other. Then at the end of the month you see if you had a surplus of money or a deficit of money. If you had a deficit you got to practice the tips on this article :)
10. Keep track of your net worth
So, let’s say that after doing all of these tips you were able to save an extra $600. And if you don’t have any savings and your monthly income statement you write down, your net worth you put down these $600. And every month you update your net worth.
There’s a funny thing that happens when you write down your net worth. You won’t feel very comfortable if it goes down next month because this number represents your worth. Not your worth as a person but your economic worth we don’t like to feel like our worth is going down and we get excited when it’s going up.
11. Make more money
If you make $3,000 a month and you can only save $800 you can work to increase your income to $4,000 and now you can save 1800 dollars. Of course, this is assuming that you do not raise your expenses when your income goes up. Otherwise you’ll just work harder but you won’t have anything in the bank to show for it.
Thank you for reading this article about best ways to save money and I really hope that you take action my advice. I wish you good luck and I hope its contents have been a good help to you.