Have you ever been proud of yourself for getting really good deals on groceries all over town. Getting the cheap chicken one place, bread somewhere else and veggies at a third store. Then driving to the big box stores and getting a huge mustard for cheaper than a normal size mustard. After that you get 30% off all of your purchases at a department store sale. You get home and feel great about your ninja like saving skills, but wait a minute? You’re still out a ton of money and didn’t NEED most of those things. You still have half a huge mustard from last time you drove out to the big box store. You actually ended up spending way more!
It’s not about how much you save each time you buy something buy how much you SPEND overall. How much has actually left your account? If you listed all of your awesome savings you’d lead yourself to believe that you should have a huge stockpile of cash in an account somewhere. We make the mistake of connecting savings with actual dollars. When we are convinced to buy the extra shaving cream for only 50% of the original – we still are out the extra dollars vs. buying one can.
Here are my tips on actually saving money so it isn’t an imaginary saving when you actually or spending more.
1. Don’t buy as many groceries: North Americans tend to waste about 20% of the groceries that we buy so try to cut down on how much you buy and therefore how much you spend. Eat down your cupboards and then shop.
2. Set an overall budget: Look at some old bank statements, credit card bills or your budget tracking program and figure out how much you spend each year on groceries, clothing, etc. Cut down how much you have spent on those items and cut their budgets back. You’ll be able to use your tricks and tips to get as much or more for the same amount with an actual smaller dollar amount.
3. Automatically save per pay: Take the amount of each pay that you would truly feel like a champ by saving, and save it. Then brag to your friends. Invest it in a TFSA or RRSP and gain all of the savings benefits with those government accounts. Buy investments inside the account so that you’ll make even more money off of your saved money. If you need the money, keep it in a high interest savings account.
4. Make a list Before You Shop: Make a list of all of the the deals and budget helping items that you are thinking of buying and then try to cross some of them off your list. Is it too far – it could be more in gas than savings. Can you do without it? Do you only need a normal size mustard? Would you rather save the money instead?
5. Take things back: When you wake up after your drunken sailor like shopping binges, take the things you don’t need back. If you save the full amount of an extra blue sweater that you never use, or a drill saw that was on sale that you’ll never use, you’ll save a ton. Even after a party you can take back booze you didn’t drink. Returning something will not only save you a % of the full price – it’ll save you the full price! Now you’re a saving champ!
Use these steps to make sure that you don’t just save money, but spend less money. A big difference.
Have a great week,