Wednesday, January 17, 2018

6 Easy Ways To Save Money

6 Easy Ways To Save Money

Who wouldn't like to have more money?

Start the new year out right, and learn how to save more and stress less. Here are 6 easy ways to start saving money today.

1. Beware of the "sale" Sign - 90% off something you'll never use isn't saving money.
  • When an item is “on sale,” we act more quickly and with even less thought than if the product costs the same but is marked at a regular price 
  • Focus on what things cost, not how big of a discount you're getting
2. Money is money - People are more likely to spend their salary on “responsible” things like paying bills, because it feels like “serious money". Whereas "bonus money" is often spent on frivolous things-but money is money.
  • Every dollar is the same. It doesn’t matter where money comes from
  • Saving so-called "bonus money" can positively affect your savings
3. Try and use cash - Using cash has a bigger impact on your brain than swiping a card.
  • Using credit cards blurs the process of handing over money and makes you more likely to spend
  • You're more likely to overspend or loose track of your spending when using credit cards
4. "Fair" is a four letter word - The concept of "fair" messes with our heads and causes us to reject deals that still offer plenty of value.
  • It doesn't pay to get hung up on the concept of "fair
  • Think about whether you're getting reasonable value for the money you're paying. Otherwise the person who gets punished will probably be you
5. Try A "Ulysses Contract" - A Ulysses contract is any arrangement by which we create barriers against future temptation.
  • You probably already use a financial Ulysses Contract and don't even realize it. Ex: RRSP's-You've made the decision in advance to save for retirement
6. Drop Anchor - "Anchoring" is a potentially devastating cognitive bias where the first number mentioned in a given scenario unconsciously influences your future choices.
  • Example: You have consistently overpaid for lattes and oil changes in the past so you mindlessly keep doing it
  • Look at your regular purchases and ask if they really make sense and whether there are cheaper alternatives
 For more on each of these 6 tips, check out Eric Barker's blog, Barking Up The Wrong Tree.

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