How to Stop Overpaying For Everything

Image by Unsplash

Thanks to inflation, $3m is the new $1m. The dollar is eroding our purchasing power and it costs more to buy less.

Although the current labor shortage is enticing companies to boost bonuses, salaries and add additional short lifetime perks to attract skilled professionals. Overall wages are still stagnant and inflation is eating into them.

But we cannot forget about inflation’s upsides which include:

  • Indicates economic activity and prosperity
  • CPI index: Consumer spending rise and market back on track from the pandemic, faster than expected requiring the Fed to taper by the end of the year
  • Inflation is better than deflation a.k.a recession
  • Inflation destroys debt as the dollar weakens and debt disappears

When it comes to consumer staples and necessities in life, there’s only so much one can cut out from their budget to save as much as possible. Scouring the internet or the grocery magazine for coupons more often than not wastes more than what saves you money.

Time = Money after all.

Opportunity cost and choices are essentials to making smart money moves. We all have finite time and limited human capital.

I’ll go as far to say that searching for deals, rates, and discounts are not the best ways to save money.

Image by Unsplash

Hidden in Plain Sight

There’s a lot Americans can ditch out of the daily lives that can save them more than they know it. Clearly, we are not heading in the right direction.

It’s becoming increasingly easier than ever to become enticed by everything. That may be a reason why banks, after the Housing Crisis adopted a more stringent loaning procedure for those taking out a mortgage or business loan but when it comes to discretionary items, we are out of control.

Still, from advertisements to low mortgage rates and a fancy degree, we fool ourselves into assuming we will get an immediate reward and investment.

Now don’t get me wrong. Not all of the debt Americans take out is toxic but out of all of them, the ones that are toxic such as credit card debt dampen the debt burden the most.

“Keeping up with the Joneses” is part of our culture. “Buy one get the next one free” is too enticing not to take advantage of. We’re all guilty of falling into the consumer trap. We want it now and tell ourselves we will focus on our weight tomorrow or work on that later.

We

need to be better spenders and it’s harder than ever to do so. Inflation is digging a deeper hole to get our bang for our buck, but it doesn’t have to be if we were to cut down these days.

As a frugal minimalist stealth wealth teen, I’ve adopted this lifestyle early on coming from an immigrant household. We only bought what we needed, not what we wanted, and mainly spent on necessities. Our lifestyle allowed us to spend less, feel better, and be more productive.

Inflation is just an excuse. You shouldn’t be budgeting to the last penny expecting not to pay more. Over time, everything gets expensive and you must take that into consideration.

Plus, we really don’t need to spend more if we don’t want to.

Although you could say home prices are at a 13 year high and rents are rebounding faster than the anti-vaxxers are getting their jabs, they are also expensive because we want more! We are buying more land than we need with money we don’t have, to impress people we don’t like.

We forget to look at the bigger picture.

You can make your life expensive or not, and with more expensive items, causes more trouble and as a result, more money is spent to maintain, guard, and safe keep it.

Since 1940, the median home value in the United States has increased at an annualized rate of 5.5%. But this is misleading. Homes are significantly larger today, on average, than they were back then.

The average home in 1940 was 1,246 square feet, roughly half of the 2,430 average of 2010 according to CNBC. Adjusting for home size, the annualized increase on a per-square-foot basis drops to 4.6%. After accounting for inflation, the average home value has risen by just 1.5% per year.

Image by Unsplash

Bend and Shape It

“Spend until it hurts” is a mantra I enjoy following simply to test myself if I ever go a little crazy with my purchases. Don’t worry, I’m not cheap, only frugal.

This mantra keeps me in check and allows me to gauge the real value of hard work through my earned money. To resist FOMO, I need to keep myself in check. But to be clear, spending less doesn’t entail a miserable life, in fact, the opposite. You appreciate what you have when you keep spending in check and are finding ways to build a financially secure life for yourself in the long run.

The truth is, the majority of what we buy is nonsense and won’t appreciate by us.

Simple but yes, it’s more complicated than that.

If unsure where to draw the line, tap into the 50/30/20 budget method of allocating your income towards different buckets. Ultimately, the more you earn, the more you end up saving since necessities don’t take up much of your salary as opposed to someone earning less.

Yet, no matter which income bracket you are a part of, you are always subject to inflation and taxes in some sort of way and progressive taxes are usually the worst. Regressive tax applies to every good and doesn’t discriminate based on income. A Coke has a $1.20 tax in NY for a middle-income earner as for a top 1% earner.

You can live a beautiful and simple life with less. It doesn’t have to be complicated, we are just told it is impossible with all the junk, gadgets, commercials, Insta stories, recurring subscriptions, big backyards, and shopping carts available.

You can invest that money, let it compound, and allow you to buy more quality shirts or anything you wish later on.

Do yourself some good and focus on what you need, what brings joy and gratitude, the Mari Kondo way perhaps, and think hard as to what will really provide you a juicy ROI, in the long run, to ultimately become the best version of yourself.

And never stop investing in yourself because that can be done entirely for free.

Also, focusing on something larger than yourself will always allow you to spend less.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Atticus Capital

Atticus Capital

Hey! We're Atticus Capital, a start-up personal finance/investment tech company here to simplify investing for everyone! Check us out here: oneatticus.com