A big thanks to Jenny Lang for sitting in the driver’s seat here today! She’s an author, mom, investor, content publisher, web and app developer, DIY addict, homeschooler, and owner of FrugalGuruGuide.com, where we show people how they can live richly and spend less. Find her on Google+.
All too often, I hear people dismissively say that they don’t really care to save more—they’d much rather make more, instead, and they’d rather concentrate their energy in that direction rather than in spending less at home.
They underestimate of the power of savings—often drastically. In fact, in a study done ten years ago, it took 15 minutes of comparison shopping to find a better flight between Los Angeles and Houston to saved, on average, $139.
That works out $556 in savings per hour.
Factor in taxes at that income level, and you’d have to be making $800 an hour or over a million and a half per year to be able earn at the same rate that you saved in that quarter of an hour.
Your ability to spend within an hour or even a minute is constrained only by your credit limit. Your ability to earn only increases with a great deal of time and work—time and work that can be worth it, but only when paired with smart spending, too.
Do people really believe that comparison shopping doesn’t really save them anything? I’d argue that they don’t. That’s their excuse—the story that they tell themselves—but having observed a number of spenders of that sort up close, I don’t think that it’s because they are mathematically challenged.
The truth is that they don’t want to think about how much they are spending or could be saving—or, at best, they want to think about it as little as possible.
Why would anyone do that?
Paying attention to how much you are spending triggers the part of the brain that is linked to disgust, which dulls the pleasure of buying new things. Many people don’t want to do anything that might dampen that burst of shopping pleasure. That’s half the reason they shop! They choose to wear mental blinders and tell themselves stories so they don’t have to think about the prices. It’s not really a strategic decision to make more money. It’s an emotional one to avoid discomfort.
Don’t let your automatic reactions trick you. You can figure out when it’s really worth your time. Just give your brain the chance!
It’s a whole lot of work to create a business that yields a million and a half in income per year. But anyone at all can save like a millionaire.