Save Money

Match your whims in savings

We all have whims, ranging from probably over-priced cups of coffee to a new pare of shoes or a dinner at a nice restaurant. We all have our own guilty pleasures which often mean spending a bit of money in things we don’t really need. The good news is, there’s nothing wrong with that! As long as you work hard and keep up with your responsibilities there is absolutely nothing wrong with treating yourself to something nice every once in a while.

However when you decide you need to save some money these whims tend to hunt our conscience. Thoughts such as “I don’t really need this” or “I could probably put this money to better use”… start popping up in our heads more and more often and this makes us fill uncomfortable, even guilty every time we want to spend a bit of money in something that is non-essential.

Saving can sometimes require little sacrifices, but it should never make you feel uncomfortable in any way!

This method tackles this specific problem and will allow you to put your whims into perspective and save money without sacrificing things you don’t need to sacrifice.

The method is pretty simple: Every time you want to treat yourself to that over-priced salad or that nice new jacket that’s on sale put the same amount you are going to spend on that whim in your savings account. This will make you think twice before actually making that purchase and value it more if you end up going through with it. And if at some point you are not able to match the price of your whim in savings, that probably means you shouldn’t be spending that money in something you don’t really need in the first place, so its also a good way to make sure you never go too crazy with your treats.

How much can you save?

This will totally depend on your spending habits and might vary a lot from one person to another, but you can try to estimate by honestly thinking about your spending.

Without going into crazy detail think of an average week and how much you spend on those things you could consider whims, for instance the coffee or expensive salad. These are things you probably spend money on every week. Then think of a regular month and what whims you succumb to on a monthly basis. Then try to do the same for the average year. You might find that every spring you buy a new pair of sunglasses when summer starts showing its first signs of arrival.

It’s important to do this exercise within different time frames such as a regular week, month and year, since you’ll probably won’t be tempted to buy a new pair of sun glasses every week, but you are once a year.

Once you’ve done this do the math to figure out how much you spend on average per month on things you don’t really need. If you’ve been honest in your answers you’ll have a pretty good idea of how much you’ll be able to save using this method over a certain period of time.

Tweaking this saving technique

If you want to be really aggressive about saving money you could add a multiplier to how much you save per every $1 you spend on treating yourself. For example, if you use a multiplier of 1.2 and you treat yourself to a $4 cup of coffee you should save not $4 but $4.8 (applying the 1.2 multiplier).

On the other hand, if you feel like matching your whims is just too much you could start by applying a multiplier lower than 1 to every $1 you spend on treating yourself. In this scenario if you bought they same $4 cup of coffee and you are using a 0.8 multiplier you’ll need to save not $4 but $3.2 (applying the 0.8 multiplier).

Applying multipliers to this method can be tempting but should be done carefully, specially if you are thinking about using a multiplier lower than 1. Remember, if you can’t save just as much as you are going to spend on something you don’t really need you probably shouldn’t be buying that thing in the first place.