It seems that when it comes to money saving techniques there are some great ones and unfortunately there are many horrible ones. As you graduate from college and transition into the real world you will become interested into how you can save more money. To help make sure you guys don’t make the same mistakes as your friends, I have listed the money saving techniques that do not work and the money saving techniques that do work:
Money saving techniques that do NOT work
The people that want to save money on everything. One of the more foolish money saving techniques because how can you cut costs on every aspect of your life? Do you really plan on drinking less coffee, going out less often, buying less clothes, buying less Corona’s? I hope not because I certainly don’t.
“Cold turkey approach”/Drastic changes. This money saving technique often fails for obvious reasons. If you go out 3 times every week, don’t try to fool yourself into thinking that you will save money by never going out again. That is the money saving technique equivalent to a person with bad eating habits saying they will never eat junk food again. Yeah right. It’s like me saying I will never drink another beer again. Sorry not happening anytime soon.
Money saving techniques that DO work
Delay the spending theory. One way to save money is to cut back by delaying instead of eliminating the purchase. Okay this may seem stupid at first glance. Think about it. Instead of buying that HDTV today, try delaying the purchase for a few weeks or perhaps a few months.
As time goes by a few things can happen: you will find a lower price, you will find a better value, or you completely change your mind on the purchase.
To further elaborate on delaying the spending I will introduce haircuts. Don’t stop getting haircuts. You don’t even have to try to cut your own hair. Try to get your hair cut less frequently. Well unless you’re a model and need your perfect hair, but, in that case I doubt you would be reading Studenomics.
Set specific goals. Telling yourself you will save money is like telling yourself you will lose weight. It is too vague and you need to be more specific.
How will you lose weight?
What behaviors will you change?
How will you measure your progress?
If you buy too many books than focus on buying less books. If your college tuition is killing you then focus on this area.
(Don’t worry I do provide actionable tips- check out how you can save money on your college tuition)
This may seem simple but the funny thing is that most college graduates don’t set specific savings goals.
Target areas that matter. No point to save money on your daily coffee purchase while you don’t even bother with negotiating your credit card APR or monthly rent. We all have major problem areas when it comes to spending money. Focus on these areas before you try to alleviate guilt by saving a dollar here and there.
As a college student or college graduate are there money saving techniques mentioned above that you would like to dispute? Think I’m full of it? Please do discuss…
photo: Aaron Webb
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I totally agree. I tried cutting out everything and just backfired. My wife got mad and we fought often about money. That lasted about a week, then we decided there were things worth cutting out and worth keeping. I now choose value over dollar. If we value eating out or doing fun activities with the kids, it’s worth the cost.
Great post.
I think you hit it right on with going cold turkey. It almost never works.
Great picture by the way! Go Blue!
I’m big on the delayed purchase concept. I don’t do it as much as I should, but I like the idea of waiting 1 day for every $10 you’re planning to spend. Now this might not work for everything, big tickets items might need to be 1 day for every $50, but it’s not a bad rule to try.
@Jesse Good point. Too often do people view eating out as this horrible financial thing. If you want to relax with your family while someone else prepares the meal then it’s the perfect option.
@pfincome “cold turkey” simply does not work for personal finance or dieting. If it has worked for you then please share with us.
@Kyle hmm interesting. Never heard of the 1 day for every $10 theory. How/when has it worked for you?
@Studenomist – “cold turkey” has never worked for me and doesn’t work for other people I know who have tried it.
I think most people would agree that saving money is something “easier said than done”. Personally, I believe it’s a mind-set that needs to be developed by creating good money-saving habits.
Here are some things I’ve done to help change my spending habits:
- Cooking more at home ? Eating out is very expensive especially if you do it a couple times a week
- Shopping online ? You can find better deals than in the store and you save on gas (I recommend http://www.shoptivity.com)
- Paying the full balance on credit cards each month ? Interest charge is like giving away free money
- Don’t forget to pay yourself ? Set up an online savings account (they pay higher interest than a normal savings account)
- Setting a budget and goals ? It’s good to have your goals written down so you see them everyday and don’t lose focus on your ultimate objectives
Again, saving money requires a lot of patience and hard work. However, you’ll thank yourself later on in life. Good luck everyone!! =)