Learning how to develop smart shopping and savings habits are essential parts of growing up. Unfortunately, for many of us, financial literacy is not something taught to us in school or by our parents.
Shopping can offer temporary relief from stress or sadness, but buying “things” does not equate to true happiness. Moreover, excessive spending can actually hold you back from living an active, engaging life, especially as you age. A recent survey by Bankrate showed that 65% of Americans are saving little to nothing. This is concerning because savings are essential for covering sudden expenses and for maintaining healthy living standards once retired.
Although frugal shopping habits and healthy savings balances go hand in hand, I will be focusing mainly on tips to develop a healthy shopping mindset within this post. Please know, due to varied incomes, life stages, and general circumstances, healthy shopping habits will be different for everyone, but the three tips outlined in this post have been pivotal in helping me to reign in my spending.
Rule 1: Create a Monthly Budget
Learning to create a monthly budget is vital for anyone needing to better manage his or her finances. Budgets should include essential categories such as:
- Loan Payments (if you have them)
This is essential because it helps you to figure out your discretionary income. In other words, budgeting helps you to see how much money you have left over after you pay for all of your necessities. As a rule of thumb, you should not need to dip into savings to pay for discretionary items such as clothing, makeup, eating out, etc. Such behavior is an indicator that you are living beyond your means. Occasionally dipping into savings to pay for an unintended expense is normal, but try not to make it a habit.
Also, this should go without saying, but it is important to build up a nest egg of savings. This is why I included a bucket for “savings” in my monthly budget sheet – I want to be intentional with what I am saving away. Best practice is to save at least six months living expenses. While this can seem daunting, especially if you are only making minimum wage, don’t psych yourself out. Start small and save what you can – even if you’re only saving $20.00 a month.
Budgets can be created using excel applications or mobile applications. No matter what method of budgeting you choose, by creating and sticking to a monthly budget, you will set yourself off on the right financial path.
Rule 2: Plan Ahead
Planning ahead will help you to make smarter choices – especially in regards to food-related expenses. First, try to cut back on how frequently you are dining out or buying expensive, but delicious, juices, coffees, and teas. Treating yourself every now and again is great, but buying takeout every day can quickly get expensive. For example, If I were to buy a salad every day from Sweetgreen it would set me back $55.00 a week, whereas if I create a homemade version of my favorite salad, I can spend far less to feed myself for the week.
Therefore, when trying to develop smarter shopping habits, please consider planning out your meals and portioning things out for each day of the week. Buying and cooking your own food is not only less expensive than frequently eating takeout, but there is a good chance that you’ll make healthier choices, too.
Additionally, if you find yourself easily tempted by goodies at the grocery store, try to make a shopping list ahead of time and stick to it. Instead of buying certain foods on an impulse or out of habit, try to think about what meals you want to cook for the week and buy ingredients accordingly.
Rule 3: Evaluate Everything
What do I mean? We live in a world where everyone is always recommending something that they “love” whether they are being paid to do so or not. Therefore, the onus is on us to do our own research before making a purchase decision off of someone’s recommendation… especially when they are being paid to do so!
First, assess whether the individual making the review is being paid, received a product for free, or uses affiliate links. Why? In all the aforementioned instances, an influencer is receiving some form of payment in exchange for a favorable review, positive social post, or sponsored video. As such, those influencers are much more inclined to give positive reviews that gloss over faults in products. If you’re reading or watching anything sponsored, you may only hear positive reviews of a product because that is what the influencer is being paid to provide.
Second, evaluate the style of review. For instance, I never trust First Impression videos or Hauls for true reviews. The only exception that I make to this rule is when bloggers or vloggers show you how a certain product wears throughout the day. In any other First Impression style video, it is impossible for someone to honestly tell you whether something is a new “holy grail” or whether it is worth buying. Similarly, many hauls fail to tell you whether a product was actually worth the money. That being said, First Impressions and Hauls can be interesting to read or watch when trying to initially evaluate new releases.
Third, dissect the reviewer’s language. Telling an audience that a product is “great” or “so good” doesn’t actually mean anything. Look for reviews with descriptive language that actually explain why the reviewer likes the product – whether the reasoning is ease of application or wear-time.
Fourth, ask yourself, do I have the same tastes or needs as this person? For example, if an influencer has dry skin and you have oily skin, it is highly unlikely that you’ll want the same type of skincare or foundation. Additionally, consider the reviewer’s environment. For example, someone living in a dry, arid climate will experience differences in wear-time of a foundation than someone living in muggy New England.
Please know, as a marketer and consumer, I am not against affiliate links or sponsored content, but do feel that everyone needs to be discerning reviews before frivolously money on items recommended via the internet.
Unfortunately, most schools don’t take the time to teach students financial literacy. However, there is a bevy of great online resources and techniques that can be adapted to fit everyone’s unique needs. Please know that smart consumerism is not anti-consumerist. Instead, smart consumerism aims to help individuals make better financial decisions.
What financial rules do you live by? Are there any helpful tips not on this list?