What’s a small money habit that made a bigger difference than you expected?
For me it was an automatic transfer to savings. The money is essentially gone before I can think about spending it. I had always heard start with what you can, but for years I never did because I didn’t think we could afford it. Eventually I started out an actual saving plan - it was an automatic $1 every day the debit card got used. We didn’t miss it. I opened another account and started intentionally adding money, it was probably $50/month. Again, we didn’t really miss it, but not we were building a savings that could turn into an appliance or family trip. I now save a lot more than that, but getting that start made it happen. I just wish I did it a lot sooner than I did.
I think this applies. Paying attention to Total Cost of Ownership (TCO) is important. As an example, I’m a bit of a tech head, and I like to get a new state-of-the-art laptop every year. I then sell the old one, so using a laptop is almost like renting since I only pay the portion of the cost between the original purchase and the resale. I thought I’d save money by buying a less expensive, less common brand of laptop. What I found though after a couple flips was that the less common brand was harder to resell, and didn’t get as high a percentage of return as compared to the initial cost. Spending a bit more on a popular model of Dell or Apple laptop made it easier to resell and gave a much higher percentage of return (there’s lots of demand). So the initial price might be higher, but the TCO is lower. Sure, TCO is likely to be even lower if you hold on to the item for a longer period of time, but the same philosophy of spending a bit more to get a bit more back on resale still holds true.
Towards everything you said, i think it depends;
for better or worse i think the new laptop every year overall cost is a hobby cost and we all like hobbies. It’s a similar vein to people who chose have their own home server vs backing up to the cloud, and the main reason is usually either privacy or TCO over the long term. Usually there’s faster and easier ways to reduce those without the massive initial outlay. But they like to tinker and that’s fine.
So i think if you like the latest tech; even if it’s less common say an ASUS ROG, sometimes it’s just worth it, lol
Giving my kids an automatic allowance! They get $5 each week into their accounts. Then when they want to impulse buy something they have to decide if they want to use their own money, not buy it at all, save up for it, or put it on a birthday/holiday wishlist.
It is still hard to watch them “waste” money on something that I know they won’t enjoy long-term, but it has also helped cut back on family impulse purchases because now they are budgeted for through the allowance.
Non-money related bonus: I am no longer the mean person who says no! Their bank balance does that for me.
That is a great way to do it!
- Keep a wish list.
- Impulse desires can mellow there awhile until you’re more clear headed and actually have the cash.
- When you have the cash, you can review what you actually want most and not just buy what you thought about most recently.
- Budget charitable giving. Impulse giving is just as bad for your budget as impulse buying, but it is a good thing to support charities that support your values. So make it part of your plan, then when you’re faced with requests you can either grant the ones within your budget or say “I already gave to xyz.”
If you own your home and your car, your biggest expenses are fixed and don’t go up every year. When I get a raise that’s “extra” money, I can put half of it towards automatic savings while the other half goes to ease inflation pressure. Some companies offer an automatic 401k contribution increase, I do it manually at raise time.
This is why we buy new cars. We also include opportunity costs in our TCO calculation.
If I borrow at 3% and invest at 7%, I’m making 4% more than I would if I paid cash (long term average, you could hit a good or bad year). We drive them until maintenance costs exceed new ownership costs, which is more years if we bought new than if we bought used, and we know the full history if we bought it new. The model of car we drive has good resale value.
YMMV, run the numbers on your favorite model and the factory loan deals available. My truck was not as good of a deal, and we paid that off as quick as we could. Paying off a car also provides security in case of job loss, where long term savings may be disadvantageous to draw down when a recession hits both your job and your portfolio at the same time.
For me it was to stop living pay check to pay check. The more I made, the more I spent. By setting my financial goals and creating a budget, I was able to break the habit of spending every dollar earned.
Interesting. I think the times passed since we had to upgrade the computer every 2 years or less. The performance and memory changes are now very incremental, and the use is 90% in the browser, for most of us, which does not require much of compute. I now keep the same computer for many years - until the peripherals get outdated or the storage is not sufficient anymore. I save time on buy/sell/customize process. Same for cars - as long as it works fine, why change? My last car update 2 years ago is a 2009 model 
I can never justify for myself financially buying a new car. Always bought used cars, with a loan, if it was more than $5-6K. My last car upgrade was free - insurance paid for the totaled car enough to get a car 2 years newer. And with a $5K valued car, almost any body damage is treated as total.
I work in IT, so I spend a lot of time on the computer, and do a lot of different types of activities. I thankfully haven’t had the need for ‘workstation’ level power, but I do need modern laptop/desktop level power to make my tasks tolerable. Plus, I’m a tech ‘junky’ so having the latest and greatest is fun, and worth it for me to spend a little more. Paying attention to the TOC helps make that habit a little less hard on the wallet.
I too used to upgrade computers more often. Building computers is a hobby and I used to build a new one every 2 or 3 years, for me and my girlfriend. Now, it’s closer to every 7 years and the difference isn’t so noticable anymore.
As for cars, this may be straying a bit off topic, but newer cars have so many new safety features that it’s worth considering upgrading to a new car (or newer used car) that’s at least within the last 5-10 years. Sometimes the most economical or frugal choice is not the best overall choice.
A small habit that made a big difference for me was learning to cook and not eating out so often. Cooking at home is so much cheaper than restaurants or fast food, and healthier.
So many things are cheaper when you provide the labor yourself. That’s why we own so many automotive tools and an air nailer. At the beginning the tools cost as much as labor but if you keep up the habits it is an investment that pays off. (And you can still go to an expert when the job is too big.)
When we wanted a chicken coop, we found we could pay half price with a kit, and half again with raw lumber, including the price of the air nailer to make the job go quicker. We put it together in a few weeks of evenings.