It’s 7:30 am and you’re getting ready for work. Theoretically, anyway. What you’re really doing is standing in front of a closet brimming with clothes and feeling like you have nothing to wear. You’re staring at nineteen shirts, four skirts, seven pairs of jeans, and that cashmere sweater you wore to death last fall but you truly, honestly have nothing to wear.
That’s because you only wear 20% of your clothes. The real question here isn’t what to wear (the cashmere sweater – you can’t go wrong with a classic) but why you constantly buy stuff you don’t need. Even if it doesn’t fit right. Or it’s too expensive. Or it doesn’t match anything else in your house. Or you have three others just like it.
Here’s what you need to know to stop accumulating stuff and start saving your money for things that really matter.
It’s Not Marketers, It’s You
There’s a ton of articles out there about how marketers and salespeople dupe you into buying stuff. Yes, there are plenty of ways they can lure you into a purchase. But let’s get something straight: no one is putting a gun to your head and forcing you to buy yet another black sweater. No one. That’s all you.
You decide what to buy – or not buy. You decide how much you’re going to spend and when you’re going to spend it. You decide to either spend cash you actually have or slap down your credit card and pay that 26% APR until you pay off your purchase.
So take ownership of your actions and don’t give assumed control of your financial wellbeing to anyone else. Ever. Except Warren Buffett – you should totally let Warren manage your money…
Understand the Root Cause of Your Credit Card Balance
“We don’t buy things. We buy how things make us feel.”
Margo Aaron nailed it here. Just about every expert on the subject says our purchases are driven by emotion. We shop to fit in and keep up with the Joneses. We shop to take the edge off after a long, stressful day. We shop to feel cooler, smarter, and prettier.
But the emotional boost we get from our purchases doesn’t last – and when the novelty wears off, we shop again. And again. The cycle continues until we fill closets and cupboards and drawers, then garages, then storage units. Eventually, we own so much stuff that we start buying duplicates of items we already have because we can’t keep track of our inventory.
Emotion isn’t the only element at work here. You also have your hormones to thank for your piddly savings account balance. Your brain’s reward center tingles with a release of dopamine every time you make a purchase. And that dopamine fix can be just as addictive as cigarettes – it’s a hard habit to break.
Set Yourself Up to Spend Less
Shopping might be addictive but it doesn’t have to be a way of life. Kiss your credit card balance goodbye with these 4 tips:
1. Connect Money to Your Values
This is by far the best tip I’ve read for changing your approach to spending: Whitney Cummings replaces the word “money” with “freedom” every time she has to make a financial decision. Such as:
- “Should I put some freedom into my 401(k) so I have some freedom when I get older?”
- “Are these new jeans worth 200 units of my current freedom?”
If you have a hard time emotionally connecting to the value of saving, stop thinking of it as saving money. Start thinking of it as saving your freedom, your future, or your dreams.
Saving right now is what enables you to buy a house or pay off your student loans in a few years. Saving now is what keeps you stress-free and able to wait for a job you really love when you get laid off. Saving now is what helps you afford things that bring you the most joy and fulfillment, whether that’s a yoga retreat, museum membership, or a new puppy.
So think about what you want most out of life, then earmark your money for your biggest values. It’s a surefire way to commit to spending on things that really matter.
2. Shop Responsibly
I’m not talking about just being financially responsible. When you buy stuff you don’t need, you’re being wasteful – with your money, your time, and the environment.
Here’s a few jaw-dropping examples of just how wasteful and destructive the clothing industry is:
- The US generates 12.5 million tons of unwanted clothing each year – that’s the equivalent weight of 34 Empire State Buildings. Most of this unwanted clothing ends up in landfills.
- ⅕ of all industrial water pollution is caused by the fashion industry. ¼ of all worldwide chemicals are produced for the fashion industry.
- It takes 44 pounds of carbon and 2,700 gallons of water to make a single pair of jeans.
- Each year, 70 million trees are used to make fabrics like rayon, viscose, and modal.
I haven’t bought a new pair of jeans since I read this data several months ago. Every time I’m tempted, I ask myself whether a new pair is worth 2,700 gallons of water. Every time, the answer is no.
If you feel the same way about that 2,700 gallons, try shifting toward sustainable practices and seek out companies who are committed to social and environmental responsibility. Of course, that means shopping takes a little more time and research, which means you’ll have plenty of time to be thoughtful about your purchases and only buy things you really need, love, and will hold onto.
Some tips to help you shop for clothing more responsibly:
- Try buying luxury slightly-used items through a website like SilkRoll (I use it and love it!).
- Research your favorite brands in the Fashion Transparency Index to see how socially and environmentally conscious their processes are.
- Discover new brands that are committed to creating quality products while respecting workers and the environment, such as Amour Vert, Christy Dawn, and PACT.
- Read Overdressed: The Shockingly High Cost of Cheap Fashion by Elizabeth Cline. Trust me, it’s a page-turner – and you’ll never shop the same way again after reading it.
3. Do the Math
Raise your hand if you’ve ever come home from the mall proclaiming “I saved thirty bucks because it was on sale!”
Now take that hand and slap your forehead. Newsflash: you’re never saving money when you buy something. If those $60 tops were on a “2 for $90” promo, you didn’t save thirty bucks – all you did was spend $90.
Repeat after me: spending does not equal saving, even if it is a bargain. The math will never work out.
Okay, that was the easy bit. Now brace yourself for the more complicated numbers talk…
Have you ever heard of opportunity cost? Financial planners just looove to toss around this phrase. Opportunity cost is the potential profit or interest that is lost when money is spent or left idle. So every time you spend money, you’re not just giving up the money – you’re also giving up all the potential profit that initial amount could bring you if it was invested smartly
Here’s what I mean: Let’s say you have $500. If you leave it sitting in your savings account, you’ll still have $500 – for a while. In a few years, inflation will cause that $500 to be worth less, so you’ll still have $500 but your money won’t go as far.
Now let’s say you choose to invest that $500 in your 401(k). At a modest 9% return, your $500 will become $624 in three years. In five years, it’ll be $723, and so on. If you leave that money until you retire, it would be tens of thousands of dollars.
So the next time you’re tempted to go on a shopping spree, ask yourself what you’re really getting out of that new stuff. If you invest your money instead, what could the compounding value get you later on?
4. Avoid Temptation
We all have that one friend who’s downright dangerous near a mall. The one that begs you to go shopping then starts whipping out her AmEx like it’s a black card and chides you into trying on stuff you can’t afford. “Oh, just try it on. You don’t have to buy it. I bet it will look sooo cute on you.”
And of course it looks amazing, because the expensive stuff always does. And then you’re tempted to shop too. Sometimes you’re flat broke and you resist the urge, but other times you end up buying a sleek, navy A-line dress that forces you to eat ramen until your next paycheck
Do you really want to give up your financial security because you’re trying to keep up with this broad? I’m not saying you shouldn’t be friends with her, but limit your social time to activities that couldn’t possibly cost you more than a crisp twenty-dollar bill. Go out for coffee or frozen yogurt. Meet up at the park to walk your dogs together. Maybe hit a movie. Just don’t shop together.
While we’re on the subject of avoiding temptation, here’s an easy tip: ditch all those emails you get from Every Retailer You’ve Ever Been To. Head to your inbox and unsubscribe from Nordstrom, J. Crew, Lululemon, Pottery Barn, Z Gallerie, even Target.
And for the love of all that is holy, unsubscribe from The Container Store. Don’t let the label makers and impeccable closet organization systems fool you – that place will not make your life better. Because nobody ever needed to drop forty dollars on a big bin to throw junk in.
Less Really Could Be More
I know what you’re thinking. You’ll stop shopping and live in a barren apartment and wear the same three neutral shirts until you can’t remember what color looks like and you’ll just ache for something shiny and sparkly and totally overpriced. I thought it would be a drab, dull life too but I was wrong.
I’ve been shifting toward a more minimalist, sustainable lifestyle for the past six months and these are my most notable observations:
- Overall, I find myself feeling relieved – I have less stuff to clean and organize and more money in my savings account.
- Being more selective has increased my satisfaction with my purchases. I’m buying things I sincerely love and can use. I slipped with one impulse purchase a few weeks ago, and guess what? It turned out to be a total waste of money.
- Surprises are easier. I’ve handled some expensive car maintenance and an emergency vet visit without any stress. I simply handed over my debit card. And, man, it felt awesome.
- The occasional splurge feels like a luxury, and I can enjoy it guilt-free knowing that I’ve been making smart decisions with my money.
The only negatives I’ve encountered have come from other people – such as the spendy friend who’s always encouraging me to buy a new this or that, usually after she’s just bought one. I tried explaining why I prefer to save rather than spend, but she got defensive. Now I just politely decline.
Remember, how you choose to spend or save is entirely up to you. And it’s also the foundation of your financial wellbeing. So choose wisely.
- Ever heard of The Latte Factor? It’s the idea that eliminating small daily purchases enables you to “pay yourself” more. Replace your daily Starbucks stop with homemade coffee and you’ll save $1,000-2,000 a year. Or stop spending hundreds of dollars on bottled water (not to mention destroying the planet) and invest in a home water filter and a few reusable bottles.