Simplify your spending. That sounds like a good idea, right? Especially right now.
Money is so much easier to manage when you have simple, clear systems in place.
To simplify your spending has two benefits – you save money and expend less energy on your finances and shopping habits in general; from reducing paperwork to making fewer trips to the shops each week.
I’ve put together a few suggestions to unravel the complexity of your finances and get into the habit of simplifying your spending.
Switch to Debit Cards
Carrying massive credit card debt will ruin your financial freedom. Now I recognise that society is evolving to the point where credit is king. But it doesn’t mean you have to have multiple credit cards.
When you’ve got multiple cards, you open yourself up to overspending plus more mental energy juggling different account balances that you need to pay each month.
Managing your spending is much simpler with a debit card. These days most debit cards have all the necessary features of a credit card, The most significant advantage is that you are using your own money. Makes it much harder to overspend and get yourself into credit stress.
Avoid a million ‘spending categories’ in your spending plan
Having emotional breathing room is key in creating a spending plan you’ll actually stick with.
Tracking your expenses for a few weeks is important to figure out where your money is going. When it comes to setting up your spending plan however, don’t overcomplicate things when it comes to miscellaneous spending.
Creating a separate allocation for EVERY individual miscellaneous item can be overwhelming and feel restrictive for some – although others do love to get down to the granular detail! A million might be a bit of hyperbole, but you get the point.
Instead of having 10 different categories of spending eg; coffee, takeaway lunch, take away dinner, magazines, alcoholic drinks, etc, create a few broad categories. You won’t suffocate with the details and you will have more flexibility – simple spending plans are winning spending plans!
Look at purchases in the value of time rather than money
This is a way to reframe your perspective on the value of something you want to buy; you’ll find it simplifies how you spend your hard-earned cash. Instead of thinking, is this t-shirt worth $50, begin to think, is this t-shirt worth *insert number of hours* amount of my time?
For example, let’s say you earn an hourly rate of $35. If you want to buy one of those automatic vacuum cleaners for $300, that means it’s gonna cost you almost 9 hours of work.
Is it worth it to you? There’s no right or wrong answer, we all place a different value on things.
You can also consider if the purchase will actually give you back time. You might save yourself 3 hours a week cleaning thanks to this wiz-bang automatic vacuum cleaner. So, while it costs you 9 hours of your life to buy, it can potentially save you 156 hours a year!
Re-framing spending in this way simplifies things because I can guarantee you’ll end up buying less when you consider what something costs in hours of your life instead of a dollar amount. Plus, it helps you identify what is truly important to you vs purchases that really don’t add value.
Simplify Your Spending by Automating your finances
This is hands down THE BEST way to simplify not only your spending but your entire financial life.
I know I talk about this a lot but seriously, automating your finances is one of the keys to financial success AND a stress-free way to manage your money. Check out my post on all things automation here.
Try a minimalist, multi-purpose approach to your beauty and personal care products
An amazing way to simplify your spending, save time in the morning, AND have less clutter in your bathroom cabinet is getting minimalist with personal care products.
Learning to love multi-purpose products – items that can be used for more than one thing – will slash the amount of stuff you need to get ready every morning.
Now I’m not suggesting you give up on looking good and feeling good about yourself. Just take a look at your current requirements and look for ways where you can be more minimalist. It will save you thousands per annum, and probably a bunch of time too.
Simplify your clothing choices
Another great way to simplify your spending and buy back time in the morning? Downsize your wardrobe.
Every day we’re all faced with a bunch of different decisions, in fact, some research says we make almost 35, 000 a day! The more decisions we need to make (including what to wear in the morning) the more tired our minds become. It’s called decision fatigue and that’s why crazy busy decision-makers like Barack Obama and Mark Zuckerberg are fans of a smaller wardrobe.
A smaller wardrobe means you’ll reduce your clothing spend and avoid the morning *I don’t know what to wear* stress. Winning combination!
Review your subscriptions
This is a biggy. Especially with how consumerism is progressing in modern society.
Spotify, Netflix, meal boxes, Audible. We’ve got more subscription choices than ever these days and it’s SO easy to sign up for one and…..totally forget about it.
In fact, subscription services kinda rely on your complacency when it comes to canceling (or not!) your account.
Subscriptions are usually fairly low cost and we don’t notice the money drip, drip, dripping out of our accounts on a monthly basis. Having a bunch of different subscriptions can get messy – take the time to review what you’re signed up for and make a call if you still need it.
These spending habit changes may not seem that much, however when you add them together the cumulative effect is substantial.
It’s actually how the English cycling team changed their results and became world powers on the bike. They looked at every aspect of their professional cycling team and made small improvements to every single aspect. The results were astounding. They went on to win multiple Olympic gold medals, world championships, tour de France yellow jerseys, and so on.
You get the point. Incremental change can make all the difference.
What tips have you used to simplify your spending habits?
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