Do money saving tips really work? The answer might surprise you.
Dieting has been with us for decades. For the past fifty years, people have struggled to lose weight. Frustrated, they turn to gimmicky dieting systems promising results fast.
With all of the marketing behind dieting, it’s easy to think you can quickly change your body without sacrificing. Furthermore, it’s easy to think you can diet once, achieve outstanding results, and never diet again.
If you’re struggling to save money, you might be dieting. I want to share my thoughts on money saving tips and how these tips are much like dieting.
Money saving tips and dieting are exactly the same.
As you might have guessed, I have a major problem with diets. It’s easy to get sucked in. You read million dollar marketing material and get convinced a diet can work for you. You get played by their advertising.
Try not to fall into that trap. Avoid thinking you can suddenly start saving money using a few tips you found on the internet. Much like you can’t safely lose 50 pounds in a week, you can’t suddenly cut your spending by $5,000.
To understand how I feel about money saving tips, bear with me. I want to explain my take on these gimmicky dieting systems.
First of all, diets like Weight Watchers, Jenny Craig, and Slim-Fast are businesses. They’re designed to make money. Second, diet programs like to emphasize the short term. “You can see results in just one week!” You get sucked in by millions of dollars in advertising designed to play on your instant gratification gene.
Finally, diet programs lie. They promise you can eat the same food you eat everyday and still see results. What a crock of shit.Money saving tips and dieting are exactly the same. Instead, focus on changing your lifestyle. Click To Tweet
Now that you know my real feelings about dieting programs, it’s easier to relate to how I feel about money saving tips. These tips are usually designed for the short term. And as many of us know, the short term doesn’t work for saving money.
Here’s an example of what you can expect from a money saving tip: Setup automatic contributions to your 401k. (I’ve even put together a money savings guide for my blog, but I don’t pretend it’s the answer to all of your money saving problems.)
Sure, it’s great to setup automatic contributions to your 401k, but it implies something much more.
Like dieting, money saving tips don’t fix the root problem.
Let’s play a game. Let’s imagine I’m searching for ways to save money and I have no knowledge of personal finance. I was unlucky enough to have parents who didn’t care about saving money and spent every dollar they earned.
Even worse, my parents were scared of the stock market and put any money they saved under the mattress.
As you might expect, I’m older now and I have no knowledge of anything personal finance. I don’t know how to plan for the future and I know nothing about retirement accounts, brokerage accounts, the 4% rule, emergency funds, savings accounts, etc. Basically, I’m a complete personal finance noob.
What will happen when I search for money saving tips and come across this? “Setup automatic contributions to your 401k.” Can you image the confused look on my face?
- What the hell is a 401k? Do I have one?
- I already spend all of my money. How can I contribute to a 401k anyway?
- I think I heard about a 401k. Is that something I get from my parents?
Even if I somehow figure out how to contribute to a 401k, am I really on the right track? Do I have the discipline to save money over the long term?
There’s a big chance I’ll turn off my automatic contributions when I need to make my next big purchase. The money saving tip didn’t fix the root problem. I still don’t have the discipline required to save money over the long term.
By its nature, a tip lies to you. It promises fast results.
That’s my problem with money saving tips. By their nature, a tip promises you fast results. That’s why we look for tips in the first place. We want instant gratification.
Saving money is not short term. You need a lot of time and a lot of discipline to save money. You have to learn how to think about money and what’s important to you before you can actually save it. A tip doesn’t give you that.
Like dieting and saving money, the sport of golf is bombarded with tips. You’ll see websites all over the web posting their latest swing tip. These tips prey on instant gratification.
Men and women alike flock to see the latest swing tip. Instead of focusing on the putting in 10,000 hours of practice, they look for shortcuts.
If you’re not careful, you can fall victim to those same traps. You might find yourself consuming tips about saving money on a regular basis. You might find yourself stuck in a loop, not getting anywhere or achieving any financial goals.
A proper foundation is necessary to take advantage of any money saving tips.
Tips exist to give us bite size pieces of information with practical applications. Without a proper foundation, you’ll have a hard time seeing the big picture.
Imagine you’re learning how to make a peanut butter and jelly sandwich for the first time. You have no prior knowledge of sandwiches.
A tip on making a peanut butter and jelly sandwich might be something like this: Only use creamy peanut butter because creamy tastes the best.
OK? At this point, you might be thinking, “Ok, that’s great, but why do I need peanut butter?” I know nothing about the bread, spreading the peanut butter on the bread, or why creamy peanut butter is the best.
That’s sort of what it’s like when you read: Setup automatic contributions to your 401k. If you’re not well-versed in personal finance vocabulary, contribution might be foreign to you. Also, you’re not going to understand the benefits of a 401k vs. a Traditional IRA.
Don’t use tips. Change your lifestyle instead.
Instead of looking for the next tip, change your mindset. Don’t think about fast results. Slow down. Don’t get caught up in lies and false promises.
Learn to create discipline in your personal finances. Give yourself a great foundation.
If we think back to the sandwich example, learn about the history of sandwiches. Watch videos on how to make all kinds of sandwiches. Read comparisons about creamy vs. crunchy peanut butter.
I know this example is trivial, but it works. There’s so much to know about personal finance and you can find tips about saving money around every corner.
But, do tips really help you? When you come across a tip, there are usually a whole bunch of things you need to do first.
If you’re told to contribute to your 401k, that tip implies you have extra money to save. If someone tells you to cut back on your morning coffee routine, what if you hate coffee?
I understand not all tips apply to everyone, but my point still stands. I don’t regularly buy coffee from Starbucks, but I understand the big picture about stopping your coffee habit.
Instead of “stop buying coffee at Starbucks,” I see:
- Track all spending and review your spending habits regularly.
- Know how much you spend on rent or your mortgage AND how much you spend eating away from home.
- Compare your spending this month to your spending one year ago.
Do you see the difference? The tip is short and sweet. It’s a quick fix and doesn’t get you to see the big picture.
Tracking your spending will help you see the big picture. At the end of the year, you might see that you spent $1,000 at Starbucks. Now that’s something you can work with.
When you’re trying to save money, don’t get addicted to tips. Saving money is a journey. Embrace it.
Much like dieting, consuming the latest and greatest money saving tips is likely to get you nowhere. When you’re done with the latest diet, you’ll tend to regress. The same rings true when you use tips to save money.
Focus on the discipline instead. Change your lifestyle. Much like losing weight requires you to completely review your lifestyle, saving money is the same.
When you’re trying to save money, you’ll need to review your lifestyle and career goals. Are there areas where you can sacrifice and cut spending? You may not need that 150 channel cable package or that new expensive cell phone.
If you start asking the right questions and see the big picture, you’ll start to see some results. You can begin applying money saving tips with the right foundation under your feet. You’ll find it easier to understand why certain tips work and others don’t.
Remember, much like losing weight, saving money is for the long term. You can’t spend a week and expect to see results.
Change your life forever. Morph your brain into a money monster and achieve your financial goals.
Are you frustrated with money saving tips that miss the point? Do you have any stories about how you changed your lifestyle to achieve your financial goals? Let us know in the comments below.