Lending Club Blog

Finding the Frugal Habit: Beating External Factors

In a recent post I explained how developing the frugal habit can be prevented by two factors: internal ones, such as desires, temptations, and a lack of discipline, and external factors. By developing a plan to beat these obstacles, we can more easily develop the frugality habit.

So what are external factors?
External factors are things outside of yourself that cause you to spend money. Think of advertisements, bad habits, and the most insidious of all: social pressure. How can we limit our spending even in the face of these ubiquitous challenges?

In my previous post I discussed developing a plan to introduce and assimilate the frugal habit. By having a frugal outlook, you can limit the strength of the internal factors influencing you to spend. Add that habit to a system of checks and balances to combat external factors, and you have a complete system.

1) Approach situations with a mindset of frugality

When you plan to do anything that involves spending money, prime yourself with thoughts of frugality. Although it sounds weird, consider developing a mantra, a set of repeatable words to remind yourself of your goal, before doing any spending. If you think about your goals or recite a mantra while shopping, for instance, you are more likely to keep your purse strings closed. This phenomenon is a psychological principle called priming.

2) Try to limit your intake of spending opportunities

If you are going out every night, you are going to spend a lot. Decide which is more important to you – the money drains that you follow, or your need for frugality. Then, reduce the number of spending drains that you follow. Try reducing the number of times you go out, for example, but still continue to follow rule number 1 and approach these nights with an air of frugality.

3) Eliminate wasteful spending

You almost certainly have some particular things that cause you to spend the most money. Consider your magazine subscriptions, your cigarette and caffeine addictions, and your other recurring purchases that are putting a damper on your savings. Choose which you can eliminate – your wallet will thank you.

By following these steps, in conjunction with limiting your internal setbacks, you will be able to develop the frugality habit. This is imperative to becoming debt-free and increasing your ability to contribute to your savings and investment accounts.

Saturday, November 22nd, 2008 at 3:33 pm

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