The consumer market works to condition your brain to think that by buying stuff, you would be solving your emotional and personal problems. But we all know that this doesn’t provide real solutions—it just adds whiskey.
By buying stuff, we just want to feel good temporarily. There’s nothing wrong with this, of course. We all need some respite. What’s dangerous is that when you’re conditioned to think this way, you’d be an easy target for advertisers and salespeople. You can easily be manipulated into buying stuff that creates a distraction, instead of confronting the problem head-on.
For a marketing professional, the more emotional their targeted consumers are, the more effective will their advertising efforts be. This explains why teenagers and individuals in their twenties are the highest risk group in turning into spendthrifts.
Oftentimes, advertisers can exploit this by inventing new needs (which really are wants) and makes audiences become aware of new problems in one’s physical appearance, mind lives, etc. The worst place to do business is a market whose buyers are not emotional and are generally content with who they are and what they have.
So here are some tricks in the sleeve that would put your spending on a leash.
Rules of the Thumb
- Getting a Raise doesn’t mean raising your lifestyle. Warren Buffet, the great investor and one of America’s wealthiest people, has not changed his lifestyle since the 1970s.
- Don’t get caught up with sales. Think before giving-in to discounts. Would you have bought it if it wasn’t on sale? If so, think of the discounted item as a bonus if you really need it.
How to Use Cash (So you’d be less willing to spend it)
- Prioritize cash spending than plastic. Studies show that consumers are more likely to become spendthrifts when using credit cards. That’s because they don’t actually perceive the costs of interest rates, surcharges, etc. and how will that affect their pockets. As much as possible, don’t take out your credit cards from your wallet unless absolutely necessary.
- Use envelopes to separate your cash. Putting your expenses into envelopes keeps your savings objective on track.
- Always pay in full. If you’re going to buy a TV, iPhone, or a car, save up so you would be able to pay in full and avoid interest rates. Don’t buy into that “Zero Interest” tagline; chances are, the interest rates are already plugged into the costs.
- Save your loose change. This habit of keeping your coins and spare pesos will surprise you on how much it bulks up in a month.
To do and not to do with Credit
- Choose future benefits instead of quick gratification. The debt trap always gets to you when you carry this belief that you must have things now. Learn to appreciate things that come from your savings plan that you followed diligently.
- Don’t use your credit card for everyday expenses. Originally, credit cards were intended as an emergency loan for those who need it badly. Now it has become a matter of convenience in purchasing anything. This misconception has created a dangerous habit that leads to unnecessary debt.
- Read horror stories from those who incurred a life in debt.
The Secret of Budgeting and Saving
- Set a savings goal within 30-day periods. Financial planners do advise that it’s better to have a short-term mindset in saving. According to the American Psychological Association, those who plan and estimate their savings longer than a month would have less money compared to those who plan a month at a time.
- Talk about Money with your Financial Consultant. This would be stressful and unpleasant, but you need to sit down with a financial professional and talk about how you can reach your financial goals. If you keep putting it off, you’ll be stuck in a rut.
Attitude is Everything
- Money isn’t necessarily good or evil—it’s just a banknote. Don’t be afraid of money. Don’t fall in love with it either. Money has nothing to do with virtues and entitlements. You should have complete control over it and not the other way around.
- Don’t compare yourself with other people. Don’t try to keep up with the spending habits of others. Live according to your needs and stick to what makes you happy.
Be happy with non-material things. Don’t measure your life’s worth with how much money you have.