This week’s podcast is the final installment of the series with Megan Russell from Marotta Wealth Management regarding healthy spending. We began the series by identifying a core values budgeting strategy. Then we moved on to avoiding advertising in order to curb impulse buying. Our episode on waiting a week before making larger purchases really resonated with our audience as a great way to spend less. The last episode centered around buying worth and getting the most from what you’ve already spent.
Megan’s last theme for us involves some great advice for spending less. In particular, we talk about setting up spending alerts, performing an intentional review of those alerts, becoming conscious of your spending (especially the things that you are paying for automatically and on a regular basis), establishing a price book to make sure that frequent expenditures aren’t costing you more than they should, buying in bulk/wholesale/secondhand and finally returning things that don’t live up to your expectations. Let’s explore each tip in more detail:
Set up automatic alerts with your financial institution. This could be your credit card or bank card, whichever you most often use to pay for things. On your settings page, you can choose to be alerted to any purchase that exceeds $1. You read that correctly, one dollar. Worried about your inbox being inundated with spending alert emails? That’s the point.
Every spending alert email you receive will have a dollar amount included. Now it’s time to review all of those purchases. Did you realize you have the habit of ordering lunch every Wednesday? Maybe you find that you frequent the local coffee shop multiple times every weekend. You get charged every month for Netflix, Disney+, ESPN and Hulu. Did you even know that your entertainment spending was so high?
Now it’s time to think about your core values. Does grabbing a coffee on the weekends bring you joy? If the answer is yes, great. Keep doing that! Is lunch on Wednesdays simply because Tuesday evenings is your carpool night for kids’ basketball? Maybe you can start prepping two lunches on Monday night. Do you really watch programs on all those streaming services? Enough to warrant the $1k price tag for a year’s worth of subscriptions?
Now that you are conscious of your spending, are you sure it is consistent? Have you ever noticed that the same pack of diapers you buy every week is sometimes $12 and other times $18? You would if you kept a price book or use a free service like camelcamelcamel to track prices on Amazon. Next time those diapers are $12, buy more than one pack, which leads us to Megan’s next tip…
Buy in Bulk
This one is a well known way to spend less on items you use all the time that don’t have a short shelf life. Check the unit price on items. A bottle of 200 ibuprofen tablets might cost $15 and the bottle of 500 is $30 and you think “that’s double the price!” But the exact same pills will cost you $.09/each in the small bottle and $.06 in the larger container.
Did you finally buy that headset you had your eye on? You waited a week, you watched the pricing, you did research beyond the ad you saw on social media and now it has arrived but it pinches your ear. Return it. It didn’t meet your expectations. Send it back, get your $75 refund and start over again. Don’t let the $75 collect dust next to your computer.
Spending less is all about awareness. Use these tips to avoid that dreaded question “where did all my money go?”
Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/
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