We are constantly bombarded by advertisements, influencers/celebrities showing us new products that could improve our lives.
Don’t make emotional purchases- eg after a horrid day at work, we might feel tempted to buy something to reward ourselves.
An occasional purchase is ok, but if it becomes a crutch for you to cope emotionally with the pressures of life, it will impact your long term savings/investments in the long run.
One tip that I do is that I’ll put it in shopping cart for at least 3 days.
I’ll then come back to reassess if I truly need this item, or after 3 days, I realise that I do not need/ want it anymore.
Save/invest your bonuses. We might put bonuses into a different mental bucket-ie. it’s “extra money” that we did not expect to have anyway, hence we might think that can be spent on items that we previously did not budget for. However, if we are able to set aside this money for saving or investing, it will help us reach our savings/investing goals faster!
Before you buy something, calculate how much opportunity cost it would be.
I could be tempted to spend $300 on a bag. However, the same $300 could also mean 60 lunches, or if you prefer travelling, 2 nights at a hotel in Japan. When you put it in this context, you would think again about whether this purchase is worth it!
Hope these tips help you!
Disclaimer: Content for educational and entertainment purposes only, this is not investment advice.
