“When people start buying things they don’t need, they soon need to start selling things they need.” – Warren Buffet
Borrowing had a charm before the recession, banks had money to lend you and you saw everything going up in prices. But, consumers have gotten a lot more frugal-minded now. It’s not enough anymore to find where to borrow money from when you need it, but people now realize it is also important to not spend money unnecessarily to avoid future debt.
Big ticket items may require large loans, but even they can be saved for with a strategy that employs delay gratification on smaller purchases. If you are already in debt, here’s my 51 ways to tackle debt.
- Make a budget – That’s the first step to developing a strategy to use delay gratification to complete your savings goals. You can always use online finance tools to help figure out you spending patterns which will help you create a better budget.
- Save Money Every Paycheck – To engender the habit of delay gratification, you can opt to have money put aside every paycheck into a savings account that is on hold for some specific purpose, like a new car.
- Cut Unnecessary Expenses – Control impulse purchases. Go through the budget and find out where you can cut costs using delay gratification. Then, take action. The next few points show you how.
- Bag Your Lunch – A lunch can cost anywhere from $5 to $8 these days and is a completely discretionary use of your money. By brown-bagging lunches you may not have as rich a lunch experience, but you will save from $80 to $160 a month. This can be put aside for a larger purchase later or to pay off debt.
- Keep an Eye on the Thermostat – People tend to go from heating in the winter directly to cooling in the summer, changing only the way the thermostat is set. While reducing energy demands is helpful, to delay comfort for extra savings can result in two to four months of no usage, depending on where you live by shutting the central system down. You can rely on sweaters and blankets for a period of time in the winter and spring, and use less expensive fans for cooling in the summer. Idea is to save on energy consumption.
- Wait for a Tax Holiday – Not all purchases will qualify, but those that do will be exempt from sales tax on a tax holiday (around the start of school). By planning some of those purchases for that day, you save money guaranteed.
- Live Below Your Means – As I explained in post “living under $10,000 a year“, living below means generates a lot in accumulated savings in short-term forced hardship. Specially when you anticipate a big expenditure, like kid’s college education, a marriage or even a new car.
- Plan Your Purchases – As can be seen delaying gratification means you don’t just run out and buy something. You have to plan the purchase to save the money.
- Build in Rewards – Don’t just focus on major life purchases. If having that cup of Starbucks coffee is something you really enjoy, then use it as a small reward for yourself once a month. This way, you don’t feel deprived.
- Get a Savings Buddy – Just like dieting can use a coach, so can delay gratification. By calling a spouse before a purchase you may find additional reasons to wait before making the jump.
- Recognize Your Successes – If you delayed all year long to save up for a big vacation. Recognize your efforts so that it doesn’t seem like hard work all the time. Remember and enjoy that vacation to the maximum.
- Choose to be a Step Behind – Don’t try to keep up with the Jones. They may have the latest gadgets and fashions in the right season, but they also have no money in the bank.
- Find Matching Opportunities – You may not be able to enjoy your retirement money right now, but it doesn’t mean you can’t make it grow twice is fast with matching funds. Not only do you delay instant gratification, but you use the power of time to compound the worth.
- Look for a Free Version – If you want a software or mobile application, you can sometimes avoid paying for it by looking for a free version. It takes more time to research it, but you save money.
- Invest in the Future – You can learn how to practice saving for the future through investing. By putting aside money and waiting to get a return, you exercise your delay gratification muscles more.
- Make Your Own – It’s definitely going to take more time and skill to grow your own vegetables or make your own home decorations, but in the end you will also exhibit a pride in being able to produce, and not just consume. Sure berries would take time to grow, but they should taste a lot sweeter when they grow finally in your backyard.
- Time Large Life Events Better – If you delay having children until you are more settled in a career, you can have more time to save for life’s larger expenses. Same with home buying, rent as long as you save for a larger down payment. Earning interest is always better than paying interest.
- Do Nothing – Sometimes just waiting can help you lose the desire to buy.
- Avoid Temptation – If you’re working on delaying gratification, don’t expose yourself to temptation by window-shopping in malls or online stores.
- Live Debt-Free and Enjoy Life – If you avoid getting loans, or faithfully repay back all your debt, you don’t have to worry about the debt or jumping interest rates. It can help you to have spare cash for things that you enjoy in life, rather than just things that you need.
Basically going slow has its own advantage, definitely while spending money, go slow. Readers, what techniques you recommend to remain debt free?