Cut Your Spending | Part III

Start saving cash today

Sometimes you really do need an installment loan to make ends meet. But an easy cash loan isn’t the only way to round up extra cash. Here are some money-saving ideas that might help you save cash now and make it easier to manage your expenses.

Keep moving and don’t touch

According to an article published by Joann Peck and Suzanne B. Shu on the Chicago Journals website, touching an object or even staring at it for too long increases the psychological sense of ownership. This isn’t news for retailers, who have long known the benefits of window dressings that stop passersby in their tracks and table displays that encourage shoppers to handle the goods. Staring and touching make it harder to resist buying. So tread lightly.

Be a happy shopper

Don’t go shopping when you’re in a lousy mood. According to a study published by Jennifer Lerner on the Harvard Kennedy School website, people who feel depressed when they shop are willing to spend 30% more than consumers who shop in a better frame of mind.

Don’t get started

According to marketing research published on the Stanford GSB News, for most people, buying the first item — however unremarkable it may be — opens the purchasing floodgates. The researchers called this the “shopping momentum effect” concluded that the phenomenon has important implications for how stores are laid out as well as for understanding individual shopping behavior.

A big cart can lead to big spending

A big cart can lead to big spending

Don’t make it easy

The easier it is to shop, the easier it is to overspend. Unless you intend to stock up on supplies, use a shopping basket instead of a cart. In fact, if you’re wandering around without a clear shopping agenda, don’t use a basket at all. If you aren’t willing to carry it, you probably don’t need it.

Write it down

According to MIT behavioral economist Dan Ariely, author of Predictably Irrational, making your spending limits concrete by writing them down or even telling them to someone else can help you maintain self-control when shopping. When you walk into a grocery store with a list in hand, you’re far less likely to make impulse purchases. If you stray from the list and make one impulse buy, the “shopping momentum effect” can take over.

Indulge yourself a little

Research published by Columbia University marketing professor Ran Kivetz on the American Marketing Association website suggests that occasional self-indulgence is a good thing. If you’re too hard on yourself and don’t splurge occasionally, you’ll end up feeling deprived. Deprivation fosters regret which in turn tempts you to splurge on something big in an effort to feel better.

Don’t overtax your willpower

According to Roy F. Baumeister, Kathleen D. Vohs, researchers and authors of Handbook of Self-Regulation: Research, Theory, and Applications, you have only so much willpower to work with. If, for example, you’re trying to lose weight and also trying to cut back on spending, give yourself a little slack on the spending front. Losing weight will save you so much money in the long run that you can probably afford those deeply discounted shoes now.

Pay in cash

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According to a study published on the NYU Stern website by joint researchers at New York University and the University of Maryland, consumers spend less when paying in cash and spend more when using credit cards, gift cards, or gift certificates. Additionally, consumers are more frugal when they estimate expenses in detail. The authors concluded that “treating [non-cash] tender as play money leads to overspending.”

Use coupons

Coupons can yield big savings if you’re not too proud to use them. But don’t quit your day job to become a full-time coupon clipper, and use coupons only for items you would normally buy.

Save on homeowner insurance

Check with your homeowner insurance carrier about ways to reduce your premiums. Loyalty discounts for long-term customers, increased deductibles, combined policies (home and auto for example), and installation of dead bolts and security systems can help lower your premium payments.

Small houses make wonderful homes

Small houses make wonderful homes

Move to a smaller home

If you’re struggling with a huge mortgage, now is a great time to consider downsizing. Home prices in many markets appear to be bottoming out and mortgage rates are low right now. Or if the interest rate on your current loan is higher than prevailing interest rates and you plan to stay in your home for a few years, consider refinancing now.

More money-saving ideas

Find more ways to save cash until payday by reading Cut Your Spending | Part I and Cut Your Spending | Part II.