Iâve wasted so much money in my life. Oh, how I wish I could go back in time and stop myself from buying that surfboard I never rode, that expensive watch I never wear, or the fancy (and broken) grandfather clock sitting in my living room right now.
What was I thinking!?
At the time I bought all these things â and many others â I believed they would elevate my lifestyle and make me happier. But the novelty wore off pretty quick, and there were no long-term benefits added to my life. Certainly not enough to make up for the price I paid. No matter how hard I try to disprove it, money canât buy happiness.
Iâm not a huge fan of the word âregretâ. Thereâs nothing I can do about the past, so I try to move on quickly and learn from my mistakes. But given some of the dumb spending choices earlier in life, Iâve now developed a system to protect myself from repeating the stupidity.
Feel free to try some, or all, of these tips below. Hopefully they can help you curb any dumb future spending in your lifeâŠ
Set a higher goal:
Right now, one of my friends is obsessed with the goal of buying a house. Do you know how much money he wastes on meaningless consumer goods? None. Zero. Because every single dollar he earns (and all his spare time) is put towards achieving his number one priority. He will buy a house this year.
Another friend of mine has no financial goals or direction whatsoever right now (Iâm not judging â neither did I at age 25). Despite his massive income of $125,000 per year, heâs living paycheck to paycheck. Since all of his discretionary dollars have no assigned purpose, they get spent willy-nilly, often based on how he feels in the moment.
Setting long-term money goals naturally helps avoid impulse buys. When you have a higher priority (especially if itâs a burning desire like retiring early) all the other unimportant things in life take a backseat. You spend less on crap and put that money to better use.
Make a âwait timeâ rule:
Do you know why so many people sign up for timeshare programs? Itâs because they are sold these packages while they are *mid-vacation*. Timeshare companies know that the exact best time to play on a person’s romantic getaway desires is around 10-11am, on the second or third day of a relaxing trip.
Of course, when these new timeshare owners get home and back to normal life, they regret making those financial commitments, because they later become anvils weighing down their financial life.
The point of the story is that, as humans, our *current* feelings or mood have a big sway on our decision-making.
Knowing this reality is part of the solution! Simply setting a minimum waiting period for purchases will curb impulsive decisions that might lead to regret. Your feelings change from day-to-day, so instead of purchasing something on the spot, waiting a week might have you thinking and feeling differently.
This is extremely important for big buys, but also works for little ones too.
For example, I personally use a 24-hour waitlist when buying from Amazon. I never complete purchases immediately. Instead, I add things to my cart that I need and then log off. The next day I log back in and see how I feel about the things lingering in my cart. Most of the time I do need an essential item, which I will go ahead and buy. But there are copious times where I ditch items I wouldâve bought that I just simply donât need. Regret avoided!
For larger purchases, items that exceed the $500 threshold, waiting a few weeks is best. Time will tell whether itâs a good decision or not.
Rent before you buy:
We live in an awesome era where almost everything is rentable. This gives you the ability to test things and experiences before sinking a lot of money into buying them.
Want to start surfing? Rent a board for $25 a day and see how you like it before blowing $800 on something you might rarely use.
Want to buy a $60,000 RV and travel the country for a year? How about renting one for 6 weeks first to see how you like the nomadic lifestyle. Most people I know with expensive RVs are trying to get rid of them, because they traveled for a few months and realized living in a van isnât all itâs cracked up to be.
Moving to a new city/state and want to buy a house? Why not rent for 12 months and get the lay of the land before putting down roots. It could be a financially smarter move, AND you can make a better purchase with more local knowledge and experience.
Renting is the best way to âtry before you buyâ. Even if it costs a little more in the short term, it can help you avoid costly mistakes, buying expensive things youâre stuck with for the long haul.
Get an accountability buddy (or a few!)
Whenever Iâm feeling âspendyâ, I call up my brother to chat… âHey bro, I just saw a wicked Yamaha R6 for sale, and itâs a great deal!â
My brother has no problems giving it to me straight⊠âJoel, you already have a motorbike in the garage that you rarely ride. Youâre not 25 anymore, youâre a dad now, donât be an idiot!â Nothing like a good honest slap in the face.
My wife is another amazing check point that stops my potential silly spending. She knows me better than anyone, and knows what will truly make me happy in the long run versus short-term stuff. (We also share the same financial goals, which helps!). So I always consult her before spending our money.
True friends donât let their friends make dumb money decisions. Find a few people you trust, and consult them before buying big ticket items.
Important side note: Make sure the friends you check in with arenât money wasters themselves. If you ask your car-lover friend if you need a new car, the answer will always be yes. Even if you donât need a car. Talk to people who share similar values and that have your best financial interest in mind.
Never EVER go into debt:
This is just Finance 101⊠Donât buy stuff you canât afford yet.
Taking out a loan to buy a depreciating asset is never a good idea. Even if you think youâre getting a sweet deal on something, the interest payments, lost opportunity cost, and overall stress of debt payments are never worth it.
Spending money on crap youâll regret is one thing. But going into debt AND buying crap is a whole nother level of regret. It doesnât matter how bad you think you want something, never take on debt to buy it. Just donât do it.
Reality check yourself:
Ask yourself, âwhat problem are you trying to fix?â
My wife and I were looking at a kitchen remodel recently, because our family is growing and it would be nice to have a âbreakfast barâ. We wanted somewhere our kid could sit and eat that was close enough where we could watch him while still being in the kitchen.
Well, after a few long and dreamy discussions and having a contractor come out and quote us on some kitchen layout changes, we were looking at a $20,000 project! Iâm not gonna lie, I was this close đ€ to signing off on the projectâŠ
But, during our 1-2 week waiting period, we asked ourselves, âwhat exact problem are we trying to solve?â We quickly realized all we really wanted was for our kid to sit closer to us while we cook in the mornings. We didnât need a fancy breakfast bar to achieve that. We ended up buying an $80 tall table from Craigslist and 4 stools for $25 each, which fit in a nook adjacent to the kitchen. It works perfectly!
Usually when youâre considering a purchase, itâs to solve an issue. Ask yourself exactly what problem youâre trying to solve, and consider alternative (and cheaper) solutions. You might save a ton of money versus making expensive changes youâll later regret!
Track your spending:
If you donât know exactly where your money goes, itâs hard to make smart future spending decisions. This is where tracking your expenses (even if itâs just rough numbers) can massively help reduce overspending on dumb stuff.
Subscription services are a good example of something everyone should track. According to studies, the average American underestimates their subscription spend by over $100 per month! Even worse, many of these subscriptions arenât even utilized fully. Like gym memberships that arenât being used, or streaming services that arenât even regularly watched.
Donât be one of those people that pay for things they donât even use. Track your spending and make sure your money is going to places that actually count.
For large purchases, tracking helps keep a record of exactly when and how much you spent on certain things. It might feel like your last iPhone upgrade was 2 years ago, but if you keep accurate records you might find it was only 14 months ago. Not really long enough to warrant a new purchase.
Practice gratitude:
The secret to having everything you want in life â> is realizing that you already do.
Seriously, gratitude is the ultimate life hack. It stops you from wanting more, and shifts your thinking to being content with all the things you already have in life.
In 2012 I started a gratitude journal. Actually, it was just a daily email I sent to myself, where I typed out three good things that happened to me that day. This small daily practice completely changed my life. I never need to buy things to make me happy â because I am already happy with the stuff Iâve got.
Try it! Gratitude reminds you of everything you already have. You donât need to buy more.
Ignore the money source:
Sometimes, when we get an unexpected windfall, we have an easier time spending that money. Like, when you get a big bonus at work, or an unexpected inheritance, itâs easy to spend it freely because you didn’t really have to sacrifice or work as hard for it.
But this isnât a great mindset. Money is money, no matter the source. The $1,000 that you shed blood sweat and tears for has the same value as $1,000 you find on the ground. That money makes the same difference in life, whether you use it to pay off debt, invest, or spend.
Just something to keep in mind when youâre up against a big purchase decision. Are you feeling like buying it because the money was easier to come by? If you didnât get that windfall, would you still be planning to buy the thing?
Conduct mammoth research:
OK, so youâre absolutely convinced that buying XYZ item is a good idea, and youâve run it through all your filters to make sure itâs a good idea to proceed. Now itâs time to move forward and finalize the purchase!
But, itâs still important to do proper research, especially when buying expensive things. Spend some time comparing features, reading reviews, and making absolutely sure that what youâre paying for fits your needs. The more research you do, the less likely you will regret buying that item. Plus, you might even save a few bucks finding a discount or cheaper item during your research!
The Bottom Line:
Everybody makes money mistakes and buys things they regret. But hopefully, this practice becomes less and less regular as you get older. By setting higher money goals, making a few spending rules, and learning from past experiences, you can avoid wasting money on stuff that doesnât actually provide long-term value in life.
Remember, itâs OK to buy nice things and spend money on cool stuff and joy-filled experiences. Just be careful that youâre not going into debt, or sacrificing long-term financial goals to pay for it. Too many Americans face financial regrets in retirement because they didnât save enough money when they were younger. Donât be one of them!
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