Everyone knows the classics. Only use cash (eh). Wait 30 days before making a purchase to see if the impulse wears off. Track your expenses. Save X% of your paycheque. But what are some more interesting ones?
Everyone knows the classics. Only use cash (eh). Wait 30 days before making a purchase to see if the impulse wears off. Track your expenses. Save X% of your paycheque. But what are some more interesting ones?
Use the 4% rule for safe withdrawal (which is WAY oversimplified) before buying something in 2 ways. One is taking the price and multiplying it by 4 times how many times a year you are going to make the purchase to see how much you would have to save for investments to fund said thing for life. E.g. an annual subscription for 100 dollars requires 2500 to maintain that if you wanted to find it for life with investments. The other is how much income it is costing you for life. E.g. 100 dollars is 4 dollars per year for life. The 4% rule accounts for inflation.
Another is consider the opportunity cost. What is your higher interest rate debt and how long are you holding that debt? Do you have any tax shelters you aren’t using that you could use instead of buying the thing. If it costs $1000, and you have a tax shelter (e.g. an HSA, 401, etc) that saves you way 25%, it is costing you 1250 (250 in taxes) + investment return. If you have something like a US 401k with matching that you aren’t using, you are leaving even more money on the table. You are paying taxes on it, foregoing investment income AND not getting the match. So 1000 dollars in a matched 401k would allow you to invest 1000+tax savings+matching, which would be over 2000.
EDIT: Investment income is exponential growth, so play around with the SEC calculator over the span of different times and rates of return. That thing you want is WAY more expensive than the price tag.