As a reward for reading me all these long months (and following me when I upscaled and moved into Mike’s crib), I’m finally going to pull back the veil and provide 3 mind tricks to become cheap. I love little ideas that can give you a totally new way to evaluate the world (things like “Sunk Cost” blow my mind).
Keep in mind, knowledge can be dangerous if incorrectly applied. Luke Skywalker didn’t start trying to take over people’s minds until the *THIRD* movie (and even then, it got him thrown to the Rancor). If you apply these and your girlfriend / boyfriend / husband / wife dumps your ass (or if they turn into a Rancor) you’re not going to get any sympathy from me!
Mind Trick #1
Any time you’re going to make a sizable purchase (not a cup of coffee, we’re talking Canoe size purchase plus here), take 10-15 minutes (maybe in the store, maybe in your living room when searching on E*Bay) and imagine your life with that item. Imagine going out canoeing, or wearing the cardigan around campus (do kids where cardigans around campus these days? Did they ever? Does anyone know what a cardigan is?). Some times you’ll decide you can’t see yourself using the item much in the future, sometimes you’ll enjoy the idea of the item enough that you don’t need to actually purchase it.
Mind Trick #2
When you’re about to buy something (big or small), compare its purchase price to something you really enjoy. Say you like going to Mexico once a year to an all-inclusive for $2000. When you’re buying an extra-large double-double at Tim’s, ask yourself “Would I rather have the trip or 1300 cups of coffee? Say you like going to the movie on a weekly basis, ask yourself “Is dinner at a fancy restaurant really worth 4 movies to me?”
Mind Trick #3
Somewhat related to #2 (but different enough to justify being another point ), when you’re about to buy something, consider it in terms of your hourly salary (to take a trick from Ramit, if you’re paid an annual salary, your hourly rate is 1/2 it, so if you make $40K / year, your hourly rate is about $20). If you want to get really depressed, consider the price after sales tax AND AFTER INCOME TAX (e.g. reduce your salary by the tax rate you pay).
I saw a woman in a McDonald’s uniform coming out of Starbuck’s one day. She totally deserves a bit of a treat on her way to work (who doesn’t love a Mocha), and maybe its just the occassional indulgence (I doubt it though), but that drink would probably cost her the first hour of her shift. Who would ever trade an hour of labour for a bloody cup of coffee?!?!? Or even a cup without any blood in it????
Does anyone have other “mind tricks” they like for saving money or just getting more out of life?
Want to learn more about RESPs? Buy The Book:
The RESP Book: The Simple Guide to Registered Education Savings Plans
Everything you need to know about RESPs.