One of the reasons I started DumbWealth was to help people take simple actions to live a richer life. While some of my articles might dive into more complex concepts, many are straight-forward and driven by simple common sense.
Since we all won’t become billionaires, we must learn to make the most of the cards we currently hold in our hand. And that means we need to make everyday decisions that set us on the path to financial freedom.
Reduced to its essence, this means spending less than you earn. To help accomplish this, one habit I teach people is to delay discretionary purchases.
“Sleep on it,” I say.
Why? Because it helps us make better decisions.
The brain needs time to process complex decisions. Sleep helps do this, as it’s biology’s way of cutting out the noise.
Have you ever had a problem that seemed insurmountable, only to have the solution jump out at you after a good night’s sleep? That’s the kind of clarity you need when making purchase decisions. It’s basically the same reason you aren’t supposed to buy groceries when you’re hungry.
Marketers love it when you aren’t thinking clearly. They want to do the ‘thinking’ for you. They know that you’re more likely to spend your money if you make decisions using your stomach, ego, hormones or emotions. They want you weak and tired so you are more likely to succumb to their influence.
Take back control by delaying your purchases. If you’re in a store and are about to buy a pair of shoes, put them back down, go home and give it a few days.
Based on my unscientific experience…
…40% of the time you’ll forget about it.
…35% of the time you’ll decide you don’t really need or want to make the purchase.
…15% of the time you’ll find a better deal.
…10% of the time you’ll go back to the store and buy the shoes.
If you do this consistently, you’ve cut your discretionary purchases by at least 75%. Your mileage may vary, but you get the picture.
Half the battle when building wealth is controlling your spending. It doesn’t matter how big your income is, you won’t get rich giving all your money away. Slow down your purchase decision process. This will make it a lot easier to spend less and build wealth.