Why do I need to save money?
Many people want to save money but they do not ask themselves why they need to save money and how they should use the money.
Different people have different reasons, such as for a dream, retirement, house, investment or vacation. For me, it is financial freedom. Set your goal, and determine your vision. When you want to spend money, think about how that money instead could contribute towards your goals. That will motivate you to keep saving!
Am I able to save money?
The answer is not “yes” or “no”. The answer is “I can control spending and save money for my goal”. Once you remind yourself of this constantly, your brain will help you to establish that saving money is easy!
Do I have smart consumer habits?
A smart consumer always knows what they need, not what they want. They have a shopping list that determines what they buy. Items on the list may have to be brought from different places because of price differences. As most experienced shoppers know, the price for an apple may be 20% cheaper at a neighbour shop!
For non-regular items, like a washing machine, you may try the following 5 steps approach:
- Do I need this?
>Yes. For washing my family’s and my clothing.
- How frequently will I use this?
>At least twice per week
- Can I afford it?
>It costs about $1,500 while my monthly income is $3,000. That means I need to finance it! I may finance through a line of credit, your savings, your emergency fund, or a credit line from a supplier.
- Any alternatives?
>Through an internet search, I found a competitive model that cost only $600 and has hundreds of good reviews. After going through those reviews, I will give that model a try.
- Are there bargains available?
>In addition to finding the cheaper model, I found the same model offered with free delivery plus a $100 coupon and 12-month, interest-free easy payment plan!
With those five steps, I saved more than $900, and you can too! As I mentioned earlier, an easy payment plan is a trap, but if you buy what you need, a payment plan will ease your financial stress.
You are now a smart consumer! Now you can focus on how to save money towards your goal!