SALARIES / AUG. 05, 2014
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5 Life Hacks That Save Money

Are you in a never-ending battle with your bank account? Constantly wondering where the heck all of your money is going? Maybe you’re that person who spends hundreds at the grocery store and yet you still catch yourself ordering out.

Fear not. Too many people are falling victim to terrible spending habits, but with these quick and simple lifehacks, you can avoid temptation in stores and save yourself some cash.

Convert money spent to hours worked

I can personally attest to this. Working from home as a freelancer means making money is suddenly a bit more difficult, and spending that money on crap I don’t need is a big no-no; even more so than when I was earning a salary. I had trouble curbing these ingrained spending habits at first—a top here, dinner there, shoes on the weekend. When you think about it at the time, what’s $40 for shoes?

Well, to some, that’s about four hours worked—and that’s if you’re making around minimum wage. Likewise, people who make more often find themselves shopping in more expensive stores, and those really nice shiny new shoes can really make a dent in your wallet. So instead of thinking about the dollar amount, convert that amount to hours worked. How many extra hours would I have to work to pay off a $400 phone, or $40 shoes? Some things can really start to add up, and suddenly you’re converting money to overtime on weekends just to order dinner out every night.

Wear headphones in stores, and chew gum or eat before you go shopping

Part of the whole shopping experience for some is including a meal—for instance, dinner and a movie. Save yourself a bit of cash and cook dinner at home, then treat yourself to something small at the theater, like a box of candy (still not cheap, but it’s better than the works at movie theater prices). If you’re planning on going out with the girls or guys, eat beforehand, or even invite everyone over before you head to the malls or outlets.

If you’re heading to a grocery store, chew gum to prevent impulsive food purchases. Studies have found that shopping on an empty stomach means you’re buying what you’re craving—and that can add up. Plan out meals for the week, then head out with gum (preferably mint) to curb cravings and impulse buys. The mint can also help counteract delicious bakery smells.

Wearing headphones and listening to your own music can also help you spend less time in the store. Some stores manipulate your senses to order to keep you in the store for longer periods of time. Wearing your own headphones can work against the music the store is playing to keep you shopping.

Work against your brain’s biases to save money

One of the trickiest biases to detect while shopping is the decoy bias. This bias is essentially a marketing trick that companies use to sell products that most people don’t really need. For example, if you walk by a tech station at Best Buy and see a $499 iPad, most people are going to keep walking. However, if you see a $150 Kindle next to that iPad, you’re more tempted to stop and investigate—and even buy—because the tablet is smaller, functions very specifically and is far cheaper. You may not even really need a tablet at all, but if you did, you’d definitely want to pay less for one, right?

Decoy bias works well in the marketplace because advertising has become far more sophisticated and some products (like tablets) are really hot gadgets right now. You may not even want a tablet, but it’s cheap, so you feel like you should buy a tablet.

A little research on your smartphone or on one of the store’s display laptops is one of the best ways to counteract the decoy bias. You can also ask yourself if this is something you actually want; if you can’t answer that honestly, ask yourself or someone close to you how often you would use that item on a daily basis. If you wouldn’t use it every day, you probably don’t need it.

Change the way you carry cash

Some studies actually show that people are generally more resistant to breaking a larger bill. While there’s nothing different between a $50 and five $10s, the smaller denominations are, psychologically, easier to spend than the big crisp bills. According to a study done by Priya Rahhubir,

“The results suggest that large denominations are perceived to be less fungible than smaller ones and that they are preferred by people who would like to save as a strategic way to control spending.”

Instead of carrying smaller bills, try carrying one or two larger bills to curb justifying the overspending that may occur when you’re packed down with small, crumpled one dollar bills.  Also, asking the bank for new or crisp bills when you make a withdrawal can also help curb bad spending habits.

Unplug appliances that you aren’t using or invest in power strips

In the grand scheme of things, your coffee pot isn’t going to cost you hundreds of dollars per year should you choose to leave it plugged in, even when you’re not using it.

However, when it comes to more than just your coffee pot (things like your small kitchen and office electronics) can really start to add up and set you back. Investing in power strips is the best way to curb this sort of unconscious spending.

By plugging in all of your electronics into several power strips, one switch suddenly controls appliances and electronics that are draining electricity. The Association of Energy Services Professionals estimates that consumers can save an average of $100 per year per strip. 

There are numerous ways that people can work to save money, but these are some of the more simple tips that can show you immediate results and save you some cash. 

Creative Commons licensed (BY-SA) flickr photo by 401(K) 2013.

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