Welcome to the second edition of the Alpha Consumer Challenge. Here's how it works: Share your favorite money-saving technique by posting a comment below. I'll pick the top three, with extra points going to the entries that sound enjoyable, realistic, and creative, and then open it up to a vote, which will select the winner. (Practicality and resourcefulness seemed to win the last challenge.) The winner will have his or her name featured on this blog and receive a copy of Rob Walker's Buying In: The Secret Dialogue Between What We Buy and Who We Are, which is also the first selection for the Alpha Consumer Book Club—more on that later.
I curb impulse buying by stopping to think about each non-reoccurring, non-necessary purchase before I make it. The amount of time I think depends on how much the item is. If the purchase is less than $10, I will spend a couple of minutes. If it's $10 to 25, I will give it 24 hours. For $26 to $100, three days is the standard. Any more, and I give it 10 days or a month.
For those bigger purchases, I find I have more time to research better deals on eBay or Craigslist. This has enabled us to save hundreds of dollars on iPods, iRobots, and even my wife's wedding dress and veil.
We all know we should be saving money, but if you look at your budget and decide to save $400 each month, it can be a little overwhelming—where do you start? I use the "85 percent solution": It's better to do 85 percent than to try to be 100 percent perfect and actually end up doing nothing.
Here's how to apply it: I target only one or two problem areas—for me, it's overspending on eating out--and focus on reducing spending in only this category. I aim to cut $50 the first month, then $75 the next month, and so on. Don't try to cut it all at once—you want your spending to be sustainable. But in a few months, you'll have cut a significant portion of your budget, which you can use for paying off debt or, even better, investing for the long term.
Now, it's your turn. To participate in the challenge, please submit your idea by next Wednesday at 9 a.m.