“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.
If you are not in debt, can you remain debt-free forever? You actually can, here are 20 ways you can start to develop a cushion of extra money for future purchases:
- 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?
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I think postponing having children for a while (never if one is single) and not buying a house too soon are good ideas for staying out of debt. Also one doesn’t need a McMansion to start with or possibly never. Everyone’s situation is different and one has to apply the ideas that will work for them. I have noticed that once a family or individual gets on the fast track, it’s hard to get off.
Also frugality should be implanted to kids at younger age, once they start valuing the money and its worth, they don’t get in to debt usually.
Manette @ Barbara Friedberg Personal Finance says
Great tips! We were glad that we are nearing zero debt before the year ends. Likewise, we have started investing and has saved a few dollars. Thank you for sharing!
How’s your situation now, went down to zero finally?
[email protected] says
This is a great article. I practice all of your tips in my every day life. Amazingly, I find that I more I go “without,” the happier I am with having less.
Have a great day!
Holly good to know that you follow all. I don’t eat out at lunch or buy expensive software, I am saving to pay off for the home in full.
[email protected] says
So am I. We are on track to be mortgage debt free in less than 4 years at the age of 36. I cannot wait! That is what I dream about- not purses or shoes, or laptops =
[email protected] says
Hell yeah! Me too.
We are on track to be mortgage debt free in less than 4 years at age 36. I cannot wait! That is what I dream about- not purses, or shoes, or laptops…or other “stuff.”
Daisy @ Add Vodka says
Keeping up with the Jonses is the one that probably pushes us to do most of the bad behaviours that create debt. I don’t have a lot of tips to remain debt free, because I’m not debt free and debt doesn’t drive me up the wall like most PF bloggers. I don’t like it, but sometimes, debt is necessary (I worked full-time throughout my college degree and still had to take out loans to pay for it).
And now is your income justifies the loan you took and sacrifices you made during college days?
Shilpi Roy Virtual Assistant says
Hi! Remaining debt free is seriously a difficult job. But with the points you have highlighted it seems that every one can surely move one step at a time and at one point of time can become debt free. Thanks for the share.
Some great tips. As you know I am all about saving money, while saving our planet and some of your ideas do just that. Since the late 70’s, society has turned to a “Get it Now, Pay for it later” attitude. Delayed Gratification was frowned upon, because there was no reason to deny oneself the joy of owning some overpriced “toy” they wanted now.
As a long time follower of Dave Ramsey’s Total Money Makeover, I love how he defines delayed gratification “Live like no one else today, so you can LIVE like no one else tomorrow”. That says it all!
Thanks for the tips.
Broke Professionals says
AMEN on bagging your lunch! My husband’s new job makes it more difficult for him to do this, and many of his coworkers spend TONS of money each week eating out. I told my husband that under no circumstances is he allowed to blow his paycheck eating at a restaurant when we have perfectly good leftovers in the fridge! It may not be sexy, but it’s frugal, and that’s what I’m all about.
If its in freeze it should be fine. I do just that everyday.
One significant area for potential savings is transportation. If we lived in a metro area we would have either one or no cars, preferring to walk or use public transportation and car sharing. Right now we live in a rural area and have a well-maintained 12-year-old mini-van (paid for and reliable!) and a basic 2009 compact car for good gas mileage. If cars are used solely for transportation and not as a personal statement or reflection of the owner, then one can drive frugally. If one can do without vehicle ownership–all the better.
Yes very true, we should always go for our real needs. And a real need can;t be to keep up with Jones’s.