Consumerism drives our world, our days, heck—our minutes. We’re inundated with ads and pressure to keep up, be on trend, look a certain part and be the best we can be, which often means having more and more things and stuff. It’s hard to break up all the brain noise and eye candy enough to declutter what really matters sometimes. And so many times we’re left with a lot of things and stuff and not so much of it is in our wallets.
As a culture we are trained to want the easy way out: a pill for our weight control, take-out for late-nights home and credit cards to extend our diminishing budgets. But what if there was an easy way out when it came to saving money and giving up these ridiculous spending habits? Maybe there is…
I knew there was no one better to consult with on this issue than Jordan Mills, CFP® a Senior Associate Consultant at Wipfli Hewins Investment Advisors, LLC. She advises clients daily on how to best utilize and invest their money and her advice even appears in USA Today among many more financial publications. The disclaimer is that she’s my sister, so I am lucky to receive the advice close to home.
Ways to Give Up on Your Bad Spending Habits
1. Pay yourself first.
Great! I’d love to. Er…what does this mean exactly, I ask her. “This is a concept that simply means you should treat saving for your future as high a priority as paying your bills.” says Mills, “For many people, if they decide they’ll save what ever is ‘left over’ after paying all of their monthly bills, there won’t be anything left. Instead, if you pay yourself first (put money into a savings or investment account), then pay all of your bills, you can then feel free to spend what ever is left. The easiest way to pay yourself first is to contribute to a retirement plan through work, such as a 401(k) or 403(b), if one is offered. Contributions are typically withdrawn automatically from your paychecks, so you never get your hands on the money to spend it. If you don’t have a retirement plan through work, you can create a similar effect by setting up an IRA (Individual Retirement Account) or Roth IRA and having an automated monthly contribution withdrawn from your checking account. Seek the help of a qualified financial advisor to assist with these strategies.”
2. Be conscious that little things add up.
This one I feel we can all really relate to. How many coffees do you buy out a week? They creep up on you, don’t they—and so do their costs. I happen to work in downtown Chicago and “cheap lunch” for me, if I don’t pack, it is at least $10.00. What does that mean in the long term? Mills says, “Let’s say instead of going out to lunch every day, you pack a brown bag lunch and save $40 per week. If you then invest that $40 per week and earn an 8% average annual return, after 10 years, you’ll have over $31,000. And after 20 years, you’ll have over $102,000.”
(Gulp) $102,000!? I just said adieu to my lunches out.
3. Cancel unused memberships and subscriptions.
This advice I followed and saved. I realized that I enjoyed exercising outside more than at my gym and boom! $75.00/month back in my pocket. Mills explains, “That health club you never go to, that magazine you never get around to reading – cancel them. You’ll save yourself money and you’ll probably also save yourself the guilt of paying for things that you aren’t using.”
4. Shop around.
“Every couple of years it pays to shop around to make sure you’re getting the best pricing for all kinds of things – car insurance, your mobile phone plan, your cable TV/internet package, etc.” Mills says. “If you find a better deal from a company you’re not currently using, you can use that information to ask your current company to match or beat their competitor’s price. If they won’t, consider switching.”