Have you ever found yourself trying to save money by not buying a takeaway coffee? Or possibly saving the R8 parking fee by finding street parking instead? But then you just end up blowing R1 500 on a designer shirt or R3 000 on a new pair of sneakers?
Personal finance blogger Brendan Dale of takechargeofyourmoney.blog makes the point that we get caught in a vicious cycle. We “punish” ourselves by denying a small luxury like a cappuccino or go out of our way to save some small amount and then we reward ourselves with things to feel good. The problem though is that the rewards are generally out of proportion to the savings we made.
Here are his tips on how to break the cycle:
Track your savings by creating a list on what you are giving up in order to save money, like consciously deciding not to buy breakfast or doing a price comparison and choosing a cheaper brand. Make a note of which of these felt like a sacrifice.
Then track your spending including every little expense! Mark all the “feel good” expenses on this list ‒ the things you spent money on to cheer you up, make you feel valued or more confident. This could be a coffee, a dinner out or new clothes.
The point of the exercise is to try to identify how buying certain items (or not buying them) can make you feel. Compare the sacrifices to the rewards and see how they align.
This will give you insight into whether your spending is in line with your values and priorities. Think about what brings you joy and true satisfaction in life and then check if your expenses reflect that.
Sometimes it’s those large expenses, where you could save significantly, that you could really live without, while its those smaller luxuries that keep you sane. Make sure your spending is worth it.