No matter how your current financial situation looks like, building smart saving and spending habits can never hurt. None of these tips will be life-changing on their own, yet added up they can make a huge impact on your financial journey in the long run.
DON’T FALL FOR DISCOUNTS TOO EASILY
Imagine you’re strolling through the mall and discover a cute pair of shoes, which is 25% off and now costs 60€ instead of 80€. You like it, you buy it, you’re happy that you made a good deal. The truth is though, you didn’t save 20€, but lost 60€. If you didn’t plan on buying shoes that look exactly like those ones anyway, you’ve been wasting your money on something you didn’t know existed just a couple of minutes before. If it’s really love at first sight, go for it, but otherwise, think twice.
CHECK ON YOUR ABONNEMENTS
Do you know how much you pay for your mobile data, Netflix, Spotify, gym and other memberships altogether each month? I’m not saying that you should quit all of them, but I think it’s helpful to make yourself clear what you regularly pay for abonnements so that you don’t lose track of these expenses. There are so many people for instance, who pay monthly fees for their gym membership but never actually work out. I, on the other hand just started sharing into my friends‘ Netflix account and therefore decided to cancel my Amazon prime membership, because I know I won’t need both. Not paying for Amazon prime anymore also means that I won’t get as many free deliveries anymore, which prevents me from shopping too much. It’s a win-win situation.
DOCUMENT YOUR EXPENSES
I don’t do this all the time, yet I have been doing it when I was solo traveling in Asia and studying in Canada. During these times, I have documented literally EVERYTHING I spent. Tracking your expenses is quite helpful when you want to discover at which areas you could handle your finances more responsibly. I’ve actually never done this at home in Germany, but next month (and maybe longer) I want to do it again, just to become more aware of how much and on what I spend my money. As for many things in our digital age, tracking your expenses is super easy if you’re using an app, but if you’re more a pen and paper kind of person, this works just as well.
I for instance never cared about owning the latest iPhone. Yes, I do love apple products but I always buy an older generation whenever I need a new one. I wouldn’t even consider buying a phone for 1000€ or more. This is something I don’t have to think about for a second. I also try to keep my phone for as long as possible. Three years is a fair time frame in my opinion unless, of course, it breaks before. Quick reminder: this is just my personal perspective and only one of many examples. If it’s important for you to upgrade your phone every year, go for it! Just know what’s a priority to you and what’s not.
KEEP YOUR EYES ON THE PRICE
This one ties up on the last point, but I still think it’s a different matter. I’m much more disciplined in terms of money when I know what I’m saving for. Right now I’m saving up for furniture and my first few rents since I finally want to move out of my parents‘ house next year. Sometimes, you have to reject the things you want to get what you REALLY want in the long run.
USE UP PRODUCTS BEFORE YOU BUY NEW ONES
As a teenager, I used to buy tons of different body creams, cleansers, face masks, shampoos, conditioners, you name it. That’s just what teenage girls do. Now, however, I won’t buy any new shampoos, conditioners, creams, etc. anymore until I finished off the ones I currently have. For me, this tip is much more than a financial benefit because I genuinely hate having too much clutter around me.
DON’T EAT OUT TOO OFTEN
To keep it real, this is the point that is the most challenging for me. I just love to eat out and who watches my Instagram stories knows that I have a weakness for donuts. As this is kind of a priority to me, I’m not giving up on it completely. However, I now decided for myself, that I only buy one donut or one drink whenever I go to the donut store instead of two donuts plus a drink sometimes. I also stopped buying myself lunch during my break at work, which is something I never really enjoyed anyway, because I don’t like the food around the area of my workspace that much. Additionally, I was always in a rush when I was eating out during lunch break. So now I take my own food with me when I go to work and only eat out every now and then and when I have the time to actually enjoy it.
BUILD AN EMERGENCY FUND
I know how boring this sounds but I think it’s very important to put aside some extra money in case of an emergency. I don’t want to go into depth here since I’m no expert in this area myself, but I would recommend you to open a savings account and inform yourself about your options. Many people think it’s better to REALLY start saving and investing when they’re older and earn a higher salary yet it quite literally pays off to start when you’re still in your 20s.
USE CASH INSTEAD OF CARDS
For many people, it’s a lot easier to be aware of how much money they spend when paying with cash instead of a credit card. If you pay by card you just have to swipe it or enter your code, whereas if you pay by cash you need to hand over physical money. Although I prefer online shopping over offline shopping, this is one of the aspects that makes online shopping dangerous, since paying by card or transfer feels less real than by cash.
WAIT IT OUT
Have you seen something you would like to have and you want to have it immediately? Wait a few days and see if you still have to think about it all the time. I usually keep the items I want to buy for days, weeks or even months on my wishlist before I possibly buy them. Many times I forget about them, so I’m glad in the end that I didn’t buy them impulsively.