The invention of credit cards may have made it convenient for all of us to spend money, but it has also made us unconsciously spend more. By paying with plastic, credit card companies have removed the pain of paying with cash with convenience. To make matters worse, credit companies extend credit to you (plus the ease of paying by swipes) makes it hard for all of us who use plastic to see long-term financial consequences if we accidentally overspend.
CASH IS KING
Do you want to spend less? Simple. Use cash for all your purchases. The act of parting with your hard-earned money makes you winch when you pay. However, there are situations (e.g. going on vacation, buying souvenirs, etc.) where you may want to use credit cards to decrease the pain of paying and increase your pleasure of experience. If you’re a frugal traveler you may want to stick to paying with cash. Your bank account will thank you when you get back from vacation.
TRADE OFF COMPARISONS
Another strategy to spend less is by weighing your opinions. In other words, you should often ask questions like “What am I giving up by purchasing [fill in your item]?”
NO FREE LUNCHES
We often get drawn to free stuff and we end up making bad financial decisions. We buy things that we did not plan on buying but since there’s something free attached to the purchase we buy it even if we are less satisfied with it afterwards. For example, people choose to buy real estate property with no closing costs, but sign a mortgage attached with outrageous interests rates and fees.
Have you made any bad decisions with money recently? Please comment below!
