Financial Suicide $10 at a Time and How to Avoid It
A Confederacy of Spendthrifts
Americans might be good at many things, but saving money just isn’t one of them. In fact, most Americans don’t save money at all, at least not enough to matter when it counts. A recent report indicates only 4 out of 10 Americans would have enough in their savings to cover a surprise expense of $500.
Think about that for a moment. Most Americans couldn’t pay for a routine brake job with the money they have in their savings accounts. That means they’d have to dig out their credit cards or borrow the money from somewhere, just to keep their car running safely.
Does this sound familiar? Do you have enough in your savings to pay $500 for an emergency expense? If the answer is no, it might be time for a bit of self-reflection. In other words, it might be time to ask yourself: “How could I let this happen?” And even more importantly, how you can fix this dire situation going forward.
The Silent Killer
Ok, it’s time you admit it– a lot of your financial wounds are self-inflicted. You can complain about rising costs and low wages all you want, but it’s usually a person’s spending habits that keep them anxious and teetering on the edge of their parents’ basement.
If you’re like most people, some of this friendly fire comes from living beyond your means. Sure, you have to pay rent, eat, and spend time out with your friends once in a while, but did you really need to spend $60 on that last round of drinks for your already tipsy friends last night? And would it actually kill you to hold onto the $18 you paid Whatever.com for overnight shipping and wait four days for that fancy new comforter you didn’t need?
So it’s not the gushing wound of an unnecessary surgical procedure or three weeks in Cancun that do you in financially. In fact, it might be better if it was. At least then you’d go out in style– with a fantastic new nose or a suntan actually made south of the border. But what we’re talking about here is an ignoble kind of financial fate — high-interest rates and bankruptcy by a thousand paper cuts that each cost $10. Is any of this hitting close to home?
Oh, The Shame of It All
You see where this is all going, right? Living beyond your means isn’t restricted to outlandish purchases like a new car every year or $400 more a month to live FOUR blocks closer to downtown. Some of the worst spending habits — the ones that REALLY get you lining up for government cheese and running from the credit card loan sharks — come from impatience, impulsiveness, and just simple lack of planning.
Sociologists and psychologists have studied this phenomenon for years and still can’t figure it out. Why would so many otherwise intelligent and reasonable people asphyxiate themselves for the sake of such trifles? Is it low self-esteem, generational malaise, or the erosion of traditional roles in our postmodern society? Nope, it’s nothing so deep as all that.
You might wish an existential dilemma or the progressive fracturing of society was making you spend money like a flea market Kardashian, but it’s really nothing more than the poor decisions you make on a daily basis. One of the worst things you can do to yourself financially is to make all those small, unnecessary purchases that eat away at your wallet behind your back and leave you zilch to show for it.
And if you reflect on it just a bit, you’ll know exactly how it happens. This is all about the fourth phone charger you buy just in case, the Netflix DVD you have for three weeks and never watch, the 40% tip you desperately hope your hot server or bartender notices, and all that uneaten delivery pizza you SWEAR you’ll have for lunch tomorrow but just gets hard and nasty there in the fridge.
These little transactions attack your bank account like a thousand biting piranhas. It’s not your rent or your car payment that finishes you off, is it? It’s all the tiny, non-essential stuff you put on your debit card that keeps you from saving money. This is called financial suicide $10 at a time, and here’s how to keep it from happening.
Sleep On It, Even If It Only Costs $10
Everyone likes buying stuff, even when they’re absolutely certain they’ll regret it. Maybe it satisfies some sort of primal urge for conquest, who knows? But if you’re really committed to saving money, the urge to buy superfluous $10-$20 purchases is one you’ll just have to resist. The solution? Sleep on it.
Just pause a minute and see if the urge subsides. Your very financial existence depends on it, right? So wait, for Pete’s sake. Wait at least a day before buying anything you don’t absolutely need. Typically, these suicidal ideations will simply go away if you pause a minute before pulling the trigger. Sure, they’re usually replaced by another obsession pretty quickly, but you need to experience that a few times to learn that these are just empty urges.
If you still want that digital album (the one you can hear on YouTube for free) the next day, then by all means: have at it. But don’t come crying home, all destitute and full of buyer’s remorse when you find out that Flock of Seagulls sucks just as much as they ever did or that Arcade Fire’s music hasn’t evolved quite as much as the dutiful critics at Pitchfork claimed it did.
Eat at Home, Eat at Home, Eat at Home
Here comes the hard part. Eating at home is just a horrible torment, especially since you’re an internet billionaire or the heir to an unimaginably huge fortune that your Captains of Industry grandparents earned in the ’40s. But even though you definitely deserve and need filet mignon and yet another spinach artichoke dip every single night, you might want to consider investing in a crockpot anyway.
You’re not an outlier in this though, not by a long shot. Your dining out obsession is actually part of a much larger national trend. According to a recent survey, Americans have recently begun spending more in restaurants and bars than they spend on groceries. But trend or no trend, they only way to build up a financial cushion is to restrain yourself a bit and eat at home.
But it seems so harmless, right? Eating out isn’t just delicious. It’s also fun, easy, and a great way to nurture your social life. Life without frequent trips to your favorite restaurant seems like a dismal prospect, right? Besides, food is one of the most basic pleasures of life. So what’s the harm in treating yourself to a great meal once in a while?
But it’s not once in a while, is it? If you’re like most people, it’s two or three times a week, more if you don’t bring your lunch to work. And at $10-$20 a pop (if you stick to casual dining or fast food), any given meal out can be easy to justify. Eating out can become an almost invisible expense.
Here’s the deal. Eat at home as often as possible. Plan your meals, go the grocery, and eat at home. It’s almost impossible to save money when you’re eating out all the time. Limit yourself to unavoidable work lunches and the once a month treat. It’s easier than it sounds and could save you hundreds of dollars a month. Seriously, just try it a while.
And if you start to get too down on yourself, there’s always a bright side. Sure, you might be eating your way from Applebee’s into the poorhouse, but at least you’re not this guy yet.
Go to The Library
For many people, books, movies, and music are a big part of their monthly expenses. But many of them overlook the best and cheapest source for these obvious necessities. Your local library is like Amazon, Netflix, and Spotify rolled into one wonderful place.
And best of all, getting your entertainment at the library is absolutely free. So, if you actually want to save money, get thee to the library right away. And don’t try to tell anyone the library doesn’t have great stuff to watch, read, and hear. Public libraries these days have an incredible amount of digital media, especially when you explore the huge databases that most of them are connected to. Just give it a try. You’ll be surprised at the selection and how much money you save.
Carry Cash Once in While, Will You?
Lastly, keep cash on you for these small purchases. Buying everything with your debit card is difficult to keep track of and can make buying stuff way too abstract. Pull $40 from the ATM and keep it on you. Cash is tangible. Using it for these small transactions will make your slow suicide all too real and you won’t want to waste your money anymore.
Try these tips for 2-3 months and see what happens. You won’t’ be deprived of a thing and you’ll have several hundred dollars to show for it.