Financial experts have long emphasized the need to focus on spending. At the same time, a new approach known as the 1% rule is beginning to catch on. Glen James, host of “My Millennial Money,” recently explained this approach on CNBC. The 1% rule is a great way to set yourself a mental stop impulse buy. That puts you in control so you can spend less and save more.
The core principle of the 1% rule is straightforward: if a non-essential purchase exceeds 1% of one’s annual income, it signals the need for a pause. After all, it’s not unreasonable to expect someone making $50,000 to stop and think about any purchase of over $500. This “cool-off” period gives shoppers time to assess whether they need a purchase, likely saving them from future remorse.
This strategy doesn’t mean people have to give up every single pleasure. Instead, it promotes mindful consumption. “Think of it as a gift to your future self!” said Bobbi Rebell, a Certified Financial Planner (CFP) and personal finance expert at CardRates. The 1% rule keeps folks from making impulse buying a habit by programming them to pause and think before they deeply invest in something new.
Furthermore, James pointed out that using the 1% rule over and over again could result in runaway spending if not carefully controlled. “It’s not a rinse and repeat kind of thing. It has to be used very sparingly,” an expert cautioned. One of the best approaches to being mindful while shopping is called the “6-to-1” grocery rule developed by Chef Will Coleman.
The “6-to-1” approach makes choosing healthier groceries easy by motivating people to buy at least six healthy foods and one indulgence. Coleman explains, “You grab six veggies, five fruits, four proteins, three starches, two sauces or spreads and one fun thing for yourself.” This strategy helps minimize wasteful spending while saving time and confusion in the shopping process. It gets shoppers in and out faster while making trips more efficient. “This makes grocery shopping way easier, way cheaper, and you get in and out, so you’re not there all day long,” Coleman added.
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