Friday, November 13, 2009

How to stop overspending & start living

Aw, doesn't that sound like a self-help book title? Maybe I'll write one. One that isn't littered with BS about the stock market and funny little calculations about interest and stuff. I'm sure that stuff has a place in the whole scheme just as calories and fat calories and proper vitamins have a place in weight loss. But really I think, in both of these situations, those fiddly little bits addle the average person so much that the whole business seems Way Too Hard. That feeling keeps us in our old habits and never allows us to break free.

1. Stop buying in order to solve problems. I'm not just talking about retail therapy. I'm talking about the immediate urge to go out and BUY something to solve a problem. Buy a new lawnmower rather than fix the old one. Buy a new piece of furniture because your coat closet is stuffed full rather than cull the contents of the closet. Buy the whole series of Star Wars toys for your kid because they really enjoy playing with the single one they have. Buy more clothes because you hate doing laundry, rather than just doing the laundry more often. Buy books because you feel like you don't have enough time to read.

2. Stop buying in order to "save" money. Our society is so discount-oriented that when we see something on sale, we feel like we need to buy it because if we need it later and it's NOT on sale, we won't be able to afford it. Ergo, we're "saving" $10 by buying it today. Another problem is comparing the previous price with the current price. Yes, a kate spade handbag for only $15 is a great deal over the original $150. But if you don't need it, you're wasting $15 rather than saving $135.

3. Don't base purchasing decisions on justification--base them on how much money you have. Over the weekend I contemplated buying a new camera. My old one is slow, meaning I miss cute moments when I hit the button and it "thinks" before it takes the picture. I'd also like one that's smaller, to fit in my pocket, and also easier to use for my daughter, who loves to take pictures. I found one on sale for $109. It was originally $129. I could also upgrade to a package for $150 that would include an extra battery, case, and memory card. This was a great deal and perfectly justifiable--most of us parent-type folks like to take pictures of kids at the holidays, the price was right, our old camera was more than 5 years old and failing, and getting a new one would enable me to give the old one to my husband (who doesn't mind if it's slow). I only had about $40 in my checking account, however. I considered pulling money from savings or using my credit card. And then I stopped. Just because it wasn't a stupid purchase in general didn't mean I could afford it. I'm asking for a new camera for the holidays instead.

4. Wait. That's all. It's so hard to do! Especially when the "shiny" urge takes over. If you don't need it right now, put the money back in your wallet and don't buy it. Don't buy a whole bunch of books you "intend" to read. Don't buy a new dress because you might have holiday parties to attend. Don't buy things as soon as they take your fancy. Wait until you really need them, then decide.

5. Pay Cash. I didn't like this one at first. Cash ran out much more quickly than credit cards. So I'd always pay cash until it was gone, use my debit card until the account was empty, then use my credit card. After all, I needed those things, and the money wasn't there, so that's what it was for. But the cash thing is more subtle than that. It's not just that you pay cash instead of using your credit card, and keep your buying habits exactly the same. It's that using cash FORCES you to recognize EXACTLY how much money you have, and doesn't permit you to indulge in squishy numbers when figuring up what you're actually spending. If the cash is gone and you "need" something, suddenly you are forced to decide whether or not you really NEED it. Sometimes, yeah. Medicine for the baby, sure. New Stephen King book? Not so much!

When I began Paying In Cash, I used to run out of money really fast. And then I'd scrimp until the next payday, then buy all the things I was holding off on. It was rough. But it was a transition. Slowly, I realized that even when I HAD money in my purse, I was trying to figure out ways to get around buying things. Did I have something already that could suit that purpose? Did a family member or friend have one I could borrow? Could I just do without it?