Saving money is more impactful to reaching the millionaire status than making more money. Therefore, why not save more? Saving money meaningfully changed my life for the better. It wasn’t always easy to save but I’ve made it a habit of doing it. I take 5 seconds of reflection before making EVERY purchase to make sure I’m spending money on things that add value to me. These 5 seconds have made a lifetime of difference for me. It’s made it easier for me to save ten dollars when I’m making a purchase.
I’m fortunate to have come from a frugal family where I learned the ins and outs of saving money. My parents gave my brother $5,000 worth of spending money for 1 year of college. It could go towards food, clothes, or anything else. After 1 year, he still had about $2,000 left. Cheapskate? Maybe. However, being a cheapskate isn’t bad, no matter the connotation behind it.
How 5 Seconds Can Save Ten Dollars
Whenever I’m making a purchase, I ask a simple question. “Is the item one hundred percent worth it to me?”. If the answer is “no,” I don’t buy it. Or I look for a similar product with a lower price. Becoming conscious of my purchases influences me to think whether it’s worth it to me.
This is a simple question that has implications. First, it’s a subjective question. I don’t know how to quantify worth. I can’t pick up a product and say “yeah, this is worth 70% to me, 80% to me, and so on”.
However, I can get close. I can say that 90 – 100% is enough for me to buy the item. If the answer is low in the 0 – 40% range, my life would be better off if I hadn’t purchased. Sure, I might experience small and short-lived psychological happiness in the cash register by buying stuff. It’s not worth it in the big picture of my life.
Asking this question can save you boatloads of money. It’s a small time investment to reflect on your needs that can save ten dollars. It applies every time money is taken out of your life. Online shopping, malls, paying for insurance, and so on.
Creating the Habit
You won’t just roll out of bed and say “ok! I will start asking myself that question before making a purchase”. It doesn’t happen that way. Since it’s something that you’ve never done before, you will need to create a habit out of it. It took me months of being cognizant for asking the question to feel natural to me.
Starting small and asking once a week is the first step. After that becomes natural asking twice a week is the second step and so on. Give yourself a timeframe to when you’ll achieve the habit. Personally, it takes me about 30 days of remembering to put in the effort to make it a habit. Some habits take me longer, some habits take me less time, but that is a general rule of thumb I’ve lived by.
Following through with this habit can do wonders for your financial life. It can save ten dollars, twenty dollars, even thousands of dollars that adds up to hundreds of thousands of dollars over a lifetime. Wouldn’t you like to be the person with a cool million sitting in your bank account?
Figuring Out Worth
Aside from the subjective percentages you come up with, figuring out if something is worth it is also subjective. As a general guide, if it’s something that you need, it’s almost always worth it. How do you figure out if it’s something you need?
If you won’t be living without having that product in your life, it’s a need. Things like food, a home, clothes, etc.Be careful to not buy something that you need at any price. Now that you’ve figured out the product adds value to your life, it’s time to figure out if the value is worth more than the price.
I generally look at my past purchases to make sure I’m paying the right price. Spending $75 for two weeks worth of groceries is worth it to me, while spending $150 for the same two weeks is not. This is from my personal experience of shopping at ALDI’s vs Trader Joe’s but this is just one example.
Enjoying the Fruits of Your Labor
You can physically see the fruits of your labor by looking at your bank account numbers after one month of implementing this strategy. You may save ten dollars one day which may swell up your balance by ten dollars. That is what I loved about saving money and what I still love about it.
The results of your effort is visible and quantifiable. It’s not like work where you don’t know how much of an impact you’re having to the organization. I have no idea if the powerpoint presentation I made have helped the company. My bosses assure me that it helped but then it raises the question “by how much?”. Quite frankly, I don’t think I’ll ever know the answer to that question.
You won’t have that problem when it comes to personal finance. You eat what you kill and you can easily know if you succeeded or not and by how much by checking your net worth or account balance.
Ten dollars is significant. If it was so insignificant, why not just save it?
Five seconds can save ten dollars. It only takes five seconds and some brainpower to figure that out. A penny saved is a penny earned as long as you keep it. The five seconds saving ten dollars equates to an hourly wage of $7,200. Wouldn’t you want to make $7,200 in a month, let alone in an hour?
It starts by creating a habit out of asking if what you’re buying is one hundred percent worth it. It ends with you inflating your bank account to lead a financially secure life. Saving isn’t so scary. Saving is your friend.
Readers, what do you do to save ten dollars? Do you reflect on your purchase before going to the cash register to save money? Let me know in the comments below!
My goal is to enable your success in personal finance so that you can realize the American dream. The first step is starting today!
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