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I’ve been editing our nosy, fun, informative How Do You Shop? series for about four months now, and in that time we’ve heard from 18 different people from across the world on how they budget, save, and, most of all, spend their money. They range in age from 19 to 59, with different professions and backgrounds and income levels; each has a unique approach to how they consider and handle finances.
Here’s just a sampling of the concrete lessons they’ve offered up, many of which I’ve personally applied to my own finances. And as always, if you know of or are someone with an interesting relationship to $$$, please reach out at email@example.com!
Keep your money organized by separating it into different accounts.
Dana Balch, who is 25, changed my economic life with a description of how she spreads her money over five different bank accounts. It’s way less complicated than it might sound — you put fixed monthly expenses like rent or mortgage money in one account, for example, and keep your more flexible dough in a different checking account, all while saving for a vacation or a home in a savings account.
Thanks in large part to our conversation, I now have four accounts (long-term savings, short-term savings, flexible checking, fixed checking) and it’s helped me save about $200 more per month ever since I started — money that was just kind of going unaccounted for and getting swallowed up by my garden-variety bad habits until I took a long, hard look at it. I simultaneously started tracking every dollar I spend, following the example of Annemarie. She’d send herself an email every day with a record of her expenses; I keep a phone note that I update every day and a spreadsheet that I update every week.
If there’s somewhere you shop all the time, research whether its loyalty or credit card program is worth signing up for.
Kelsey, 31, is a mother of three who used to have a tumultuous relationship with money, and since she now does a lot of her shopping at Target, she saves a lot by using the store’s credit card and in-store app. But fair warning: Store cards can carry deceptively heavy interest rates and fees, as Carly Oishi, 38, discovered when she accrued over $20,000 in debt on Target’s and Macy’s cards, among others. She eventually managed to pay it down with help from her family.
Live by this rule that’ll help you reconsider whether you actually love something.
“Most of us wear 20 percent of our clothing 80 percent of the time,” said Janine Thornhill, echoing the wisdom of many closet cleanout experts (which are a real thing). Janine is a 58-year-old mother of five who co-owns a graphic design business, and this mantra helps her think long and hard about what she’ll truly wear and whether it’s worth spending a lot or a little on a given item.
And if you REALLY want to commit, try putting together a capsule wardrobe of only your favorites.
When Maryam, 33, who runs a blog about Pakistani food, moved to Mexico, she built a strong seasonal wardrobe of 37 pieces, including shoes. “Over time,” she said, “I’ve just been trying to see the gaps. And once in a while I try to put in some kind of trendy piece, but one that I can tolerate for the next two to three years.”
If you can’t afford something you love, see if you can trade or barter for it.
Kate Killet, 36, makes about $20,000 a year as a freelance photographer but gets a lot of her stuff by trading her services for discounts from designers or bands with merch that she’s into. She’s also part of a local trading group called Bunz, where no money is exchanged at all. Even if you’re not a photographer and don’t live in Toronto, odds are good that there are similar groups in your area or on Facebook; after we ran an article about the Buy Nothing Project, I found my own and signed up.
If all else fails, just find a place you can rent for only $225 a month.
Andres, 26, is a teacher who lives in Miami with his girlfriend and makes me questions every financial decision I’ve ever made in my life.
Read these and other interviews from our How Do You Shop? series here.