I borrowed the concept from another article, but the idea is so flaming simple, I think it does need to be repeated.
The best way to save your money is to not spend it.
The simplicity of this is clear, but most folks just really don’t get it, do they? I have railed on about the Semantics of Money, but let’s get back to the basics on this one, and here are some simple questions I’d love to hear some opinions from my good readers.
Someone goes out and spends less on some interesting piece of stuff (maybe it was planned), is that person more likely to take the unspent money, and spend it on something else (due to the halo effect of saving money on the previous purchase)? I have caught myself doing the same thing, “I saved money, so I can splurge on something else”.
Conversely, does someone who decides not to buy something that was planned, less likely to have that kind of “halo of savings”, and thus less likely to splurge the “saved” money?
If someone spends time trying to figure out how much can be saved buying something, why isn’t the most important question, that is usually not asked, “Do I need this?”. Spending less money is not saving your money, it is just using less. Saving money, is keeping the money in your pocket (or your bank account).
Have you caught yourself saying (or heard a friend say), “If I buy this on sale, I can get two of them”?
Have you heard someone else say, “I decided not to buy that thing, but because of me not spending the money, I’ll go buy something else”? I guess (as Mrs. C8j pointed out) that if you decided not to buy a $5000.00 TV, and decided to celebrate with a cup of coffee and a donut, that might not be too bad.
Which of those previous two statements are more likely? I’d like to think that the second one is more likely, but I must admit, I have caught myself doing the first statement (far too bloody often). Does impulse spending compared to planned spending change the decision point?