Let me ask you a question. Have you ever been to the supermarket to buy something but you end up returning with a lot more things than you had planned?
The answer is probably a “yes”. We’ve all been in that situation where we end up buying things that we did not actually need.
This does not only happen when you go to the supermarket. It happens when you are buying stuff online as well. You want to buy a lot of things when you see them beautifully placed on a website. Some of us see a “Sale” sign and that will get us hooked. If you love shopping then you are likely to spend a lot of money on things you don’t need.
Here’s another question – Do you have things lying around in your house that you don’t need?
One more – Is your closet filled with clothes that you never really wear?
I get it. It is not your fault. In a way, we have been programmed to act this way. It is basic human nature. Businesses use different marketing strategies to sell their products. We are just a part of their marketing strategy.
My Plan to Save Money
A couple of months ago, I started noticing a lot of things lying around in my house that I didn’t need. I always knew there were things I did not use. But this time, I really started noticing them. I looked at my closet and found clothes I didn’t wear but I remembered that they were very expensive when I bought them.
I realized that things needed to change. So I made a promise to myself that in the year 2019, I will not buy any new clothes. But, suppose I had to wear a blue shirt for a work event and I didn’t own one. In that case, I will buy a blue shirt. Except for such circumstances, I promised myself that I will not be buying anything new. That was my plan.
A year later, my plan was successful. I did not buy any new clothes for a whole year. In fact, I still haven’t bought any new clothes, and it is almost October 2020.
I learned a lot from this little experiment of mine. So I started applying it to other things as well, but with a twist. Instead of not buying anything at all, I would ask myself this very question before buying something:
“Do I REALLY need it?”
That’s it. That is the question that has helped me save a lot of money this year.
Whenever I wanted to buy something off of a shopping website, I would first ask myself, “Do I REALLY need this thing?” Asking this question allowed me to stop and think for a while. There is a psychological effect that occurs on your head when you ask this question. Surprisingly, my answer is “no” most of the time. I did the same when I was at the supermarket. It did not matter if it was just a packet of chips. I would ask myself, “Do I really need to spend Rs.200 on a packet of chips that would do no good to my health?”
Okay, now you might be thinking that I’m cheap. See it is not a matter of Rs.200 for me. It is much more than that. It is a matter of discipline and willpower. Saving money is not the only goal. When you make such decisions you are becoming a person who has principles, who doesn’t allow external factors to affect the internal mind.
Asking the very question might seem really simple and easy. But it can be a lot harder.
You might also think that it is stupid. How can this little question help you save money? Trust me, it works. Try it yourself the next time you want to buy something.
There’s a famous quote that goes something like this:
Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.
I’m not sure who actually said it, but the point is quite straightforward here. People work hard to earn money. But what is the point if they spend it on things they don’t need. Some people don’t even work for the money they are spending.
The Importance of Saving
Saving money is really important. There is an online movement that has been going around on the Internet, called the FIRE Movement. FIRE stands for Financial Independence Retire Early. This movement has allowed people to retire at a very young age like 30, 35, or 40. It seems impossible to retire at age 30, but they are doing it. How? By saving money and living way below their means.
Saving is not the only thing that they do. They invest their savings and they build other ways to earn passive income. There are some controversies going around about this movement but I am a firm believer in this movement and I intend to do the same. My goal is to retire before the age of 30. If you want to know more about living below your means and retiring early, watch this video by Pete Adeney (aka Mr. Money Mustache).
Warren Buffett, the Oracle of Omaha, is one of my biggest influences in life. Here are some of his ideas on saving:
If you buy things you do not need, soon you will have to sell things you need.
Don’t save what is left after spending, but spend what is left after saving.
Warren is a billionaire and he is one of the richest men on earth, yet he still uses a flip phone, buys breakfast at McDonald’s, drives a simple car, and lives in the same old house that he bought when he was young. It’s not that he can’t afford luxury houses, cars, and food (which he clearly can), it’s just that he knows the value of money and spends it wisely.
Here’s an interesting article on Warren’s saving strategies that is worth checking out.
Do You REALLY Need It?
The next time you go to the supermarket and reach for something you are about to buy, ask yourself, “Do I REALLY need this?” When you see an “On Sale” sign, don’t be fooled. Remember, if you buy something for Rs.100 that is really worth Rs.150, you did not just save Rs.50 but you spent Rs.100.
Learn to use old things in a new way. For example, if you have an old crappy laptop, fix it. Maybe it will cost you Rs.5,000 to fix it. If that will get your job done then do it. Don’t spend Rs.50,000 to buy a new one instead. If you have old clothes, wear them. Don’t buy new ones. You don’t really need them because you already have enough. Learn how to make your own things. Thanks to technology and the Internet, there is YouTube where you can find a lot of DIY videos.
When you go out for coffee with friends, you don’t need to spend Rs.350 on a Latte. Sometimes it’s okay. But don’t make it a regular thing. Suppose you go out for coffee three times a week, you will have spent Rs.1,050 just on Latte. Again, it is not being cheap. It is about discipline and principles. Trust me, you will be doing yourself a favor.
Save money, but don’t just save to save. Instead, save to invest. You can invest your money in stocks and other financial securities that can give you handsome returns. The most important of all – invest in yourself. Instead of spending money on things you don’t need, spend it on books and other courses that will help you make a better person and that will help you make more money.
Don’t buy things you don’t need. Use this simple question to save money and live a disciplined life.