Lessons Learned From A Spending Fast

The idea of spending only on the necessities is a scary one, but if you are determined to try a spending fast, you will be surprised at what you learn about yourself AND your spending.

Rules of a Spending Fast

Some things are obvious: There is no question that rent, electricity and other necessary bills have to be paid. Food is more difficult, though. You don’t need to go to the most expensive grocery store in town, and certainly don’t need to eat lunch or dinner out.

Exercise is another tough one. Yoga and group fitness classes are great, but running and walking outside or putting together yoga sequences at home keeps you from spending.

What purchases actually make you happy?

As you go through the spending freeze, the first couple of weeks are full of moments spent daydreaming about what you can’t buy. By Week 3 the things you truly miss become clear. Maybe it is going out to dinner, drinks, and coffee with friends.This is less about the food, and more about sitting down with a friend and catching up. One remedy is suggesting walks or hanging out in the park. Free, but still fun.

Studies show that spending money on others makes us happy. When a friend is having a particularly bad day, you want to get her flowers to cheer her up or offer to take her out for a drink, but you can’t during your freeze. Or when a friend has a birthday party and you show up empty-handed, that doesn’t exactly feel good. So, use this time to figure ways to bond with your friends without cheating on your fast.

What spending looks like after the freeze

A spending freeze helps you become a lot more mindful with your spending. Will that four-dollar almond milk latte really make you happier than the free coffee at work? Do you really need that T-shirt right this instant, or can it wait until fall? Overall, you learn what is really important and what you can live without.

Does Money Buy True Happiness? Maybe.

Money is kind of like health in that it affects us more in the negative. Not having it, you’re very aware of its impact on your happiness. But then once you have it, it’s easy to take it for granted.

Once your basic expenses are covered and you don’t lie awake thinking about bills you can’t pay, there are still ways to use your money to increase your overall happiness level.

Buy things for other people.

Kindness and altruism are important qualities for most people, and studies show that buying things for others makes us happier.

While buying ‘stuff’ won’t bring you happiness, buying things for others can. When people spent their work bonus on someone else, independent of how much money they spent, they felt happier. What’s more, investing in experiences, such as a family vacation, can help increase your happiness.

Use your money to invest in your relationships.

If long-term happiness is the goal, you’re better off investing that money in your relationships with other people.

Money can buy you that plane ticket to visit someone you love or you can have a baby sitter for a date night, or a party with your friends. These things can help you keep relationships strong, and money can help you do those things. Is money something that’s essential to developing strong ties to other people? No. But it can make it easier if you are spending your money wisely.

Use money to save time.

Putting your money toward saving time could be an excellent use of it. More specifically, putting your money toward tasks you dread doing yourself could contribute to happiness.

One way to spend money is to pay people to do chores you don’t want to do. People who use money to save time are happier.

Remember, spending your money on plane tickets to see your friends and hiring a house cleaner isn’t essential to happiness—but they’re certainly worth keeping in mind the next time you’re getting ready to pull the trigger on that expensive handbag.


Losing Weight Can Save You $30,000

Between society’s addiction to sugar, and the amount of time we spend sitting, weight loss isn’t always easy. But if you’re at an unhealthy weight, losing those extra pounds is worth it, and not just for the sake of your health. Your wallet will benefit from it, too.

For a recent study, researchers at Johns Hopkins set out to determine what the price of obesity really is over the course of a lifetime. What they found? If you’re an obese 20-year-old, losing enough weight to meet the “overweight” BMI classification will save you $17,655 over the course of your life. And if you can reach a healthy BMI range, you’ll save nearly $30,000.

“Over half the costs of being overweight can be from productivity losses, mainly due to missed work days… This means that just focusing on medical costs misses a big part of the picture, though they’re a consideration, too,” study co-author Bruce Lee said in a statement, noting that of course medical bills contribute to this number as well. “Productivity losses affect businesses, which in turn affects the economy, which then affects everyone.”

Unfortunately, the CDC estimates that one-third of Americans are obese—so we’ve got a lot of work to do. If you need to lose weight, be sure to eat enough vegetables, move more, and avoid losing weight at a rapid pace. According to research, slow and steady wins the race—so go easy on yourself and know it takes time.

Shop Around For Car Loans First

When they step foot in a dealership, car shoppers generally focus on haggling the best price for their ideal vehicle, having researched every aspect of their new purchase. Gas mileage, safety aspects, and all the dings and whistles are calculated when figuring the optimal price.  But when doing your homework, don’t forget: car loans are shoppable, too.

Secure Financing Before Buying a Car for Smoother Negotiating

If you’re going to finance your car rather than buy it outright, it’s easy to assume you have to go with the dealer’s financing. But as a recent study suggests, it’s important to shop around.

The study was co-authored by professors at the MIT Sloan School of Management and the Brigham Young University’s Marriott School of Business. They looked at data on over 4 million car loans from 326 different financial institutions across the U.S. According to the study, there are a few interesting findings:

“Search frictions”—including the time and hassle of researching and applying for alternative financing options—make it much less likely consumers will get the best interest rate for their credit profile.

Less than 20 percent of borrowers in the study’s sample successfully originated an auto loan with the lowest available interest rate…

Most borrowers would only need three interest-rate quotes to get close to the best rate.

As Professor Christopher Palmer of MIT pointed out, “Consumers often fail to shop around for lower interest rates. It can be a costly choice —small differences in monthly payments really add up, and many people find they can afford a newer car when they secure a better rate.”

Next time you’re in the market for a car, let this serve as a reminder: shop around. Check auto loan terms at local bank and credit union branches. It takes a little extra time to get a few quotes, but the money you’ll save on interest is worth it. Meaning, you can still go home with the perfect vehicle, but also the perfect financing.

Is Social Security Failing?

There’s a lot of mystery and anxiety surrounding the future of social security and the availability of retirement benefits when we actually stop working. We’ve all heard the fact that the social security trust fund will run out of money around 2033 and that worries people who plan on collecting benefits from the program after that date.

However, what most people don’t know is that the majority of social security given out over the course of a year is funded by payroll taxes from that year, a whopping 77%. Therefore, most people approaching retirement now should not see a significant cut to their benefits. That’s not to say that there won’t be changes. More of your social security money could be made taxable, which would result in a net loss to the monthly checks.

This may change your plans to retire early. Some of the people for whom this was the plan should rethink it, not only because of the (somewhat) uncertainty of the program, but also because the benefits are high for those who work longer. For each additional year you work after retirement age, your benefits jump 7-8%, which isn’t chump change!

Finally, those close to retiring but in need of some extra change CAN collect benefits while still working, which helps ease some of the anxiety of getting older. However, you don’t get a full amount – social security takes about half of what you earn for them and saves it until you’re officially retired, which means you can’t fully drain the account. Hey, maybe these social security people do know what they’re talking about!