The Number-One Personality Trait That Will Save You Money
Our culture is focused on having everything immediately. Delayed gratification is no more! Everything is about on-demand, delivered right to your door, made to order, etc. On the one hand, this demand for immediacy means that convenience is increased and time is saved. On the other hand, it’s costing us all a lot of extra money. Some services are worth the additional cost for the value they add to our lives, but a lot of them aren’t. Paying for convenience is almost always more expensive.
I’ve written before about how “Frugal Living Is A New Mindset.” My overall point in that post is that it’s often easier to just throw money at a problem, or buy the first item that comes to mind; that tactic, however, always comes at an additional cost. Less significant short-term pleasures can be deterrents to long-term goals. By changing our mindset and thinking in a more resourceful manner, we can make significant savings on daily necessities. Simply planning ahead before making purchases can avoid a lot of wasted money, and those savings can be used to build wealth more quickly.
So, what’s the number-one personality trait that will save you more money? Forethought (aka, planning ahead)! Here are seven ways that planning ahead can save you money:
1. Avoid impulse buys.
If you take your time and wait before making a big purchase, many times, the desire to buy the item will fade away on its own. You’ll also no longer get that feeling of “buyer’s remorse” after the impulse has rammed its way into your credit card report, since you’ve taken the time to think through the purchase decision carefully. Rather than just trying to rely on willpower, the general rule of thumb is to wait at least two to three days before purchasing a non-necessity. This way, you won’t just be purchasing something as a reaction to being caught in the moment; you’ll be acting on a well-thought-out decision.
2. Avoid poor-value products.
By taking the time to research your options, you’ll find the best item in terms of its overall value. It may not be the cheapest cost upfront, but by taking the time to read reviews and compare prices, you’ll end up with a quality item that will last for a longer amount of time (and you’ll save money in the long run by not having to replace the item).
Ideally, you want to purchase the item that will have the lowest “cost per use.” What does that mean? For items you use often, it’s better to spend a little more on an item that will last much longer (higher price ÷ more uses = lower cost per use). Yes, if you buy the cheapest item, the overall cost per use will be lower, but the value will be lower, too: that item will quickly break down and force you to make another purchase and spend more.
3. Prep and cook meals at home.
In a post last week, I detailed nine ways to lower food costs. One of the main ways that we’ve been able to keep our food costs so low is by cooking nearly all our meals at home. Planning ahead is a key component to making this successful. From planning which meals you’re going to eat throughout the week, to planning which ingredients to purchase at the grocery store, the additional preparation can save you a lot of money.
Plan ahead for meals outside of the house, too. Pack lunches, snacks, water bottles before going on outings such as the beach, hiking, road trips, plane flights, etc. This helps prevent you from stopping for fast food or dropping cash at convenience stores.
Meal planning extends to buying pre-packaged foods as well. Pre-packaged foods are always marked up significantly. From prepared frozen meals, pre-cut trays of fruits and vegetables, and pre-mixed salads, all these items will be a lot cheaper (and often healthier) if you buy your own ingredients and prepare them yourself.
4. Coupons, promo codes, and after-season sales.
There are a lot of methods for obtaining a better price when you don’t have a specific timeline for needing a particular product. You can check sites like DealsPlus to find promo codes for online shopping, printable coupons for in-store purchases, and up-to-date sales for thousands of stores. A few minutes of searching can lead to big savings on your shopping trips.
Additionally, many stores have big holiday sales and price markdowns at the end of each season. For example, you can find huge savings on winter jackets during the first few weeks of spring. Halloween and Christmas decorations will see their prices slashed up to 50% to 75% the day after the holiday. Stock up on them while they’re cheap and store them away for the next year.
5. Avoid last-minute holiday rushes and price hikes.
Similar to the above point, you ideally want to try to shop at the opposite time that everyone else is. Waiting until December 23rd to complete your Christmas shopping is a horrible idea for your wallet. Plan ahead by picking up gifts throughout the fall months, when you can take your time and actually find quality deals. You’ll also avoid having to pay for expedited shipping to get your gifts to arrive in time for the holiday.
The biggest culprit for price hikes is (surprise, surprise) airlines. Studies show that the prime timeframe for purchasing a domestic flight is around 57 days prior to departure. You’ll see prices start to trend upwards as the travel date gets closer, with the biggest price hikes occurring a few weeks before the flight. By planning your travel ahead of time rather than procrastinating, you can save hundreds of dollars on plane tickets, depending on your destination.
6. Stay within your budget.
One of the biggest hang-ups people have about budgets is that they’re “hard to stick to.” The average person writes out a basic budget, ends up overspending in a few categories, tells themselves they’ll “try harder next month,” and repeats this cycle until giving up. Sound familiar? Don’t simply rely on willpower. Get out of your comfort zone and think differently. Allow yourself some wiggle room with a small “Misc Expenses” category as a buffer.
Also, by planning ahead, you can incorporate upcoming expenses into your monthly budget. Instead of birthday gifts, social events, or the bi-annual car insurance bill being complete surprises, you’ll already be covered if you’ve planned ahead and allocated the money accordingly. Be patient: budgeting is a process that takes time to refine. It took us about three or four months before we finally found a budget that worked for us.
7. Plan what you’ll do with windfalls.
There’s a good chance that, at some point, you’ll receive some windfall of money: a new job with a higher salary, a raise at your current job, bonuses, gifts, an inheritance, etc. Avoid blowing through it all by making a plan ahead of time for what you’ll do with the additional money. Take some time to craft this plan. When the windfall drops in your lap, take some time (again) for a “cooling off” period right after you receive the windfall (to get over the excitement and temptation to make impulse buys). This way, you’ll ensure that you’re being wise with your newfound cash.
What other ways have you planned ahead to save money?
A lifelong Bay Area native, Matt Spillar graduated in May 2013 from Fresno State with a Sports Marketing degree. He currently works on the Content Management team for DealsPlus.com and has worked four seasons with the San Jose Giants. You can read more of his writing on the DealsPlus blog, or his personal blog. He is also on Twitter.
Image via Unsplash
