7 Things I Don't Spend Money On in my 20s
Being rich is not only about how much money you make; it is also related to how you think about your spending habits some of which can be really harmful to your wallet, mind, and general lifestyle. This is why it is important to purchase stuff that enhances your life in some way and avoid the ones that are damaging it. In this piece, I am going to share with you 7 items that I no longer purchase (or purchase very seldom) in my 20s that have improved both my financial and mental health. Are you ready?
#7 Streaming and Gaming Services
I personally prefer not to watch a lot of tv and spend hours on a video game, and the main reason is that both tv and video games can be really passive ways of spending time that can go on for many hours without you realizing how much time was wasted on them. I still think watching a movie or playing a video game in a social context and with friends or your partner can be fun, but if done excessively, it can be harmful not only to your daily productivity but also to your financial well-being.
Remember that the streaming services like Netflix or HBO spend millions of dollars on advertisements with flashy trailers to try and convince people to trade their most valuable asset which is time for a bit of shallow entertainment, which again nothing wrong with it if it is done in moderate levels. The same also goes for video games which can hook you to a virtual world and make you spend lots of money on virtual items that are detached from reality and the responsibilities we have in our 20s to progress and move forward in life.
If you add up the fees you are paying for all these various entertainments, streaming, and gaming services and products, it will quickly add up and eat a big chunk of your monthly salary. So my suggestion is to stop renewing the services or only own the ones that you truly enjoy and can use in moderation. In this way, not only you will be saving a lot of money directly by cutting out these subscriptions, but also be able to make better use of your time and indirectly increase your wealth in the long run. Win-Win.
#6 Charity Organizations
YES! You read correctly. I no longer support big charity organizations (even though there are good ones out there), but mostly focus on a problem that I care about solving (like animal rights) and support smaller charity groups that I know the people involved and can make a more predictable impact.
I have realized that whenever there is emotion involved in any act, there is always room for exploitation and that is certainly true for a number of charity organizations out there who unfortunately abused the trust of people and spend the raised charity funds for personal gains, hefty salaries and extra expenses without focusing on the issue at hand which the money was raised for in the first place.
This is a sad story and hopefully will become better with newer processes and technologies in the future that can restore the faith in the process of making the world better through bigger movements. But for now, find an area in the world that you think needs some attention, and then try to find genuine people helping that cause directly by supporting them both emotionally and financially. Be sure that if you are spending your money on the right cause, then you will reap the benefits somehow in the future as you are making the world we are living in a bit better. And that is very noble.
#5 Sugary Drinks
Soda or in general sugary drinks are heavily consumed and advertised around the world. You cannot watch a sporting event without some of this soda, coke, or energy drinks promoted by your favorite athletes. Although there is nothing wrong with the seldom consumption of these drinks, most people get addicted to them and end up spending a lot of money on something that they don't actually need.
Not only the continuous purchase of sugary drinks will shrink your wallet, but it also has an indirect effect on your finances due to long-term health effects. Previously, I enjoyed drinking RedBull after high-intensity workouts, before study sessions, or whenever I felt thirsty; but realized that the assumed effects it had on my performance were just an illusion. I now only stick with water when I am at the gym, restaurants, or whenever I become thirsty which made me much healthier and wealthier. It takes a bit of effort and self-discipline to give up a consumption behavior, but it is totally worth it.
If you are still not convinced, let me show you an imaginary scenario. Imagining that you love drinking RedBull (500ml) with the price tag of $5.49, here is a long-term overview of what you can buy with that money if you buy one, two, or three cans per day.
As you can see, the costs add up if we look at our small daily costs with a long-term view. When you have a bad habit and a credit card, it is very easy to lose money without even realizing it. But maybe replacing soda with water could get you that awesome trip that you can get nice memories in. Something to think about.
#4 Gadget Upgrades
In the new generation, we are used to getting excited by new technologies and gadgets. Just think about the previous time you bought a new phone, laptop, or camera and remember how excited you were to try out its new features. Tech gadgets are the new modern toys that are marketed to adults as "Must Have" if you would like to stay on the trendy side of the world. Even though it is true that some gadgets are used for business and work-related purposes with the potential to make us more productive and wealthier; there are also a lot of gray areas when it comes to gadgets and especially gadget upgrades.
Technology companies hate selling you a one-time physical product as their source of revenue will be unpredictable and not sustainable; that is why they have been focusing their marketing and production processes on incentivizing their older customers to upgrade to new gadgets every few years. While there is some inevitability when it comes to the need to upgrade gadgets as we are limited to useful battery life, but many upgrades just seem a "feature checkbox" illusion that makes the consumer think they DO need some new features even if they don't.
A few years ago I bought an iPad Air 2 which was reasonably priced at the time. I mostly used it for reading, note-taking, and practicing piano. So even though there have been many newer models after then, I have never considered upgrading my iPad because all those new fancy features do not enhance my usage. Imagining if I was an artist and wanted to use the iPad for drawing, an upgrade that allows me to use the new Apple Pencil could have made sense, but not for a lot of other folks who might be tempted into buying something they might not need. You will save a lot of money and headache by only upgrading the gadgets that will improve your life in a significant way.
We are all social creatures and need a certain degree of validation and attention from our social groups, but as with any other behavior, a compulsive need to grab other people's attention is really harmful; not only to our mental health but also financial health.
That is why I try to dig deep into the reasons why I want to buy an item (especially expensive ones) before actually making the purchase. If that item is making my OWN life better in a significant way or brings joy to my life and the people that I actually care about, then that purchase can be a positive one.
But buying things only to brag to others and show them off is a really desperate and poor way to manage your life and will make you poorer as the years go by. I really hope this Dave Ramsey's quote was put on a billboard in every city, so a lot of folks can see it every day.
We buy things we don't need with money we don't have to impress people we don't like
For example, if you want to buy a car or a house, one of your decision criteria should not be about how lavish is that house or car but mostly about how practical it is and how it can bring you more joy and practicality. Always remember that strangers care much more about their own pain than yours, so it is much healthier to not include them, directly or indirectly, in your most important life purchase decisions.
Now, if you are looking for the best places to cut down costs you need to consider housing, transportation, and food. Overall, these are the categories that people spend the most on and I have found out there is always some improvement that you can make in this big chunk of expenses, especially when it comes to transportation and owning your personal car.
There are always very valid reasons to own a car, especially if you are older, have kids, and do not live in urban areas with close access to public transportation, but even in that scenario maybe you would not need the latest and fanciest car on the market. Remember that as a house, there is a lot of hidden costs when it comes to owning a car, from insurance and parking to gasoline and maintenance costs. So buying a safe, efficient, and also a sufficiently good looking car is a much smarter decision than buying a car that is going to put a lot of financial burden on your shoulder, depreciate and lose its value as the years go by, and not have any significant difference rather than occasional Instagrams selfies in it.
Additionally and for younger adults like myself, who happen to live in more urban areas; I would argue that buying a car could be more troublesome than solving problems. In a lot of places, you have access to fast public transportation. if you need to go to a close destination, it is best to bike or walk; not only that is healthier but I have found out the most inspiring thoughts in my life usually happens when I go for a walk and interesting thoughts keep coming.
And even if you do need to go to an out-of-reach area, there is always the option to rent an uber or a car for a short period of time. That will save you much more money down the road.
This one can be controversial for some people and I need to point out that I still enjoy the occasional Gin and Tonic at parties and celebrations with close friends, but I do not see the need, both for my enjoyment and also my wallet, to keep spending lots and lots of money on alcohol.
This is a bigger issue in the countries that I have lived in with much higher prices of alcohol, but I would argue that even if the price of alcohol is as cheap as coke, it is still a mistake to make your body and wallet dependent on any substance including alcohol. We are all creatures of habit and perfect at deceiving ourselves; so if you keep telling yourself that you need alcohol to have fun, then it will be true and make you responsible for the consequence.
Experiment with lowering your consumption value and I will guarantee that not only you will feel much better, but also richer. But I guess this is easier said than done.
Have anything else that you would not consider buying in your 20s? Make sure to share them with me in the comments section.