I remember during the diet craze of the 90s, people talked a lot about the set point. The set point was the minimum number of calories (and exercise) that your body would except before it started losing weight. The idea was to try and change that number so you would lose more weight and get fit.
I was thinking about how frugal living and saving money can work the same way. We all get used to a certain way of spending and living, and tend to increase that spending when we have additional income. So, the extra money gets swallowed up in an extra latte, a couple of movies for the kids, a pair of shoes that weren’t on sale or dinner out.
Lower the frugal set point and instead of losing weight, you’ll gain money.
How can a set point be related to frugal living? Well, everyone has a different comfort level with how much they are willing to spend on something. The average person may think that $30 for a pair of jeans is a really good deal, the bargain hunter may think that $15 is a better number, and the really frugal person won’t pay more than $3 for a pair of gently used ones. They have different set points for shopping for jeans.
The first step in changing your set point, is to first understand how much you spend in the areas of your life. I know you are going to groan, but having a budget is the best way to see what you are really spending. A way of cheating at this (remember that a real budget is best) is to keep your receipts for the month and then add them all up. How much did you spend on groceries for example? Set your goal lower. Eventually, you will get used to the new set point and start saving.
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