I’ve been a freelancer since I was 15. Took two years, but I’ve learnt the best finance lessons ever. Even a fin-fluencer can’t teach you how to save money effectively!
People will tell you about expense tracking apps and more. But what if you cannot convince your brain to not make those extra expenses?
That’s what we will delve into as we go deep into this article.
The Rewards Our Brain Thinks Of..
First, let’s understand why we make those extra, impulsive expenses with an example.
Let’s say you want to eat chocolate. Now that you’re craving it, there’s an itch in you that will stay until you fulfill that craving. So, you go and get one.
Your brain’s ‘want’ was fulfilled so it feels rewarded and hence, dopamine release.
Similar to this example, you make all your impulsive expenses for that feeling of being rewarded.
Logical Vs. Emotional Expense
Coming to the solution — How to save money?
The chocolate bar example shows an emotional expense. In fact, most of our expenses are emotion-based.
Here we have to find a middle ground between our logic and emotions.
For example, let’s say you come across a beautiful painting on the street. The emotional side of you would likely make the purchase but logically, you will think — “Is this painting so important?”
If logic wins, you just saved yourself from an extra expense!
Ask yourself questions like, “Is this [object] really good for me?” or “Do I need this right now?”
Remember, it’s not about torturing your mind to convince yourself. Instead, it’s more about mindful purchasing.
Google Sheets - The Best Tool Ever!
For even further visual tracking, I’d suggest using Google Sheets. Plus, since 65% of us are visual learners, creating a record that we can see would be better.
Here’s how you can do it the better way:
First, pre-plan and create an estimate of how you think your expenses for the coming month would look like. You can categorize them like, “xxx for medicines, xxxx for groceries, etc.”
Then create a Google Sheet with sections including — Date of Expense, Type of Expense, and Amount.
Finally, track the expenses at the end of the month and check where and how much ‘extra’ expenses were made.
A Bonus Tip
You can also track your yearly earnings on another sheet.
I’ve been doing this for a few months now and it’s working wonderfully for me. I know it’s harder to save money than spending it. Try it out, what if it works?
