The S&P 500 was down last week after Secretary of the Treasury Scott Bessent announced the treasury was going to double its repurchase of 30-year government bonds, from $2 billion to $4 billion. Investors have been selling bonds due to worries about inflation, the ongoing Middle East conflict, and the US national debt. This pushes bond prices down, as more people try to sell. When the sales price of a bond falls, the interest yield on the bond increases. To help stabilize the bond market, the US Treasury will be buying twice as many bonds as usual.
If you’re also worried about interest rates and the impact of inflation on your personal finances, here are two easy ways to curtail spending without feeling deprived. First, take advantage of the endowment effect. We place a higher value on things we own. Simply holding something can trigger those feelings of possession, and all the feel-good chemicals that come with it. When you go to a store and see something you like but don’t necessarily need, pick it up. Carry it around the store with you. Then put it back. Same happiness, less spending.
The same thing applies with online shopping. Adding things to your cart triggers all those feel-good chemicals, too. The trick is to wait two or three days before you buy them. Many times, you’ll realize you don’t need those items. And sometimes, the store may offer free shipping or a discount on the things you do need.
It’s a bit counterintuitive, but you can actually get more joy from doing things less often. For example, if you only get coffee, lunch out, or an afternoon sweet treat once a week, when you do, it becomes an event. Something special to be savored. If you do it every day, it’s no longer a big deal, it’s just everyday life. Look at your average week, and see what you can turn into a little luxury by having it less often.
When you’re looking at your budget, it is not about how much you are spending. The question is if your spending is making your life easier or making you happier. Making conscious decisions with our money can lead to greater happiness.
Your action item this week is to clean out your pantry. Toss any expired food and donate what you’re not going to use. Then base your next grocery run around what you already have.
If you have a question you want answered, email us at info@covingtonalsina.com. Be sure to check out our Facebook page or website to see our upcoming educational events.
CovingtonAlsina is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.