How to Stop Impulsively Spending Money Once and for All
You have tried to curb your spending problem . You have frozen your credit cards. You won’t be traveling within a mile of Best Buy, Marshall’s, Sephora, or anywhere else where your weakness in spending is at its worst. However, for some reason, you still lower your budget every month. It’s time to take control of your impulsive spending once and for all.
The problem with most “stop impulsive spending” tips is that they don’t focus on what it takes: your willpower. I guess it would be helpful to literally cut back on your credit cards, but that doesn’t change the fact that you’re still tempted to buy things . Carl Richards, a certified financial planner, advises creating a space between incentive (your urge to buy a new gadget you don’t need) and reaction (your decision to buy a gadget). In other words, don’t just avoid your impulse or deal with its consequences – fight it. Spending tricks can help, but if you really want to nip the problem in the bud, focus on your willpower with these tips.
The easiest way to test and hone your willpower? Make yourself wait.
A friend uses what I call the $ 100 Rule. When she gets the urge to buy something that costs $ 100 or more, she forces herself to wait at least a week. This way, she will have time to think if she really wants it, or if she is just impulsive. Adjust the numbers to suit your budget. Maybe you’re broke, and even a $ 25 purchase will set you back a pretty penny. Change it to the $ 25 rule. Or maybe you are playing and $ 100 means nothing to you. Cool, make it the $ 1000 rule.
The point is to give yourself time to make an informed spending decision that fits your budget. Bonus: when you wait, you also give yourself time to look for deals or discounts.
However, impulsive spending is not always expensive. Sometimes it’s lipstick at the checkout or a new Amazon phone case. For these small purchases, I follow the 10/10 rule . If I’m thinking of buying something for $ 10 or less, I don’t spend more than 10 minutes thinking. If an item costs more than $ 10 and I’m still not sure, it comes back to the shelf no matter what. I know this is a basic option, but it works pretty well with impulse elements. Again, you can adjust the numbers to suit your situation.
I recently wrote about Amazon Contemplate too. This Chrome extension is perfect for this kind of task. When you click buy something on Amazon, you have to wait 30 seconds to really think if you want the item. Half a minute is a short time, but sometimes that’s all you need to avoid being impulsive.
Focus on alternative cost
This is why it is helpful to have goals. When you are saving for a purpose, it is much easier to resist the urge to spend because you can think of impulsive spending as the enemy of your financial goal . Oh, do you want to pay off your debts by July? This new pair of shoes that you don’t really need will get you back before September.
There is a technical term for this: opportunity cost. Investopedia defines opportunity cost as “the loss of potential benefit from other alternatives when choosing one alternative.” In this context, opportunity cost is something you give up when you spend money buying crap you don’t need.
The key word here is opportunity. Let’s face it, when you have to give up on trifles, it usually feels like a sacrifice. Nobody likes sacrifice. However, when you have a goal of saving, you can reimagine “sacrifice” as an opportunity. You now have the opportunity to make better use of your money. It’s up to you to take advantage of this opportunity, but it’s much easier to take control of your money when you see how it will benefit you.
Go broke strategically
When I first started budgeting, I really overestimated my willpower. I figured I could resist any temptation to spend, so I didn’t budget for anything other than debts or bills. You can probably guess what happened next. I ruined my budget because it was unrealistic . And since my budget was already screwed up, I would keep spending money, because what’s the point?
It took me a long time to figure out my budget. Let’s not forget that money is just a tool. It’s ok to spend! There is nothing wrong with spending money on something you love every now and then, you just want to do it strategically. That way, you don’t get burned out, but you also don’t spend money like crazy.
Create a small charitable foundation or add a category to squander your budget. Don’t go crazy, of course. It is not meant for a luxurious lifestyle, it is just a small amount of money that you can benefit from when you feel like pampering yourself. This way you have boundaries and guidelines so that you can strategically go broke. You are tied to the amount in this fund.
When you spend money, it also helps you spend money on what you like rather than what you like . This way you get more out of your expenses and it brings more satisfaction. Divide your spending into two categories: likes and likes. What kind of things do you like to spend money on, and on what – just? I love spending money on clothes, but I love spending money on travel. Give up likes and focus on what you like. It helps weed out impulsive purchases that you later regret. Financial website Phroogal explains it this way :
Take a step back and ask yourself, “How many purchases did you make that you just liked but didn’t like?” Quite a bit of? You’re not alone. Imagine all my $ 40 meals I ate in 30 days. This $ 1,200 is enough for an all-inclusive trip to the Dominican Republic for two. I would have complained that I had no money for vacation, but I kept buying things that I liked, instead of what I said I love … to travel.
When you try to exercise willpower, you also don’t want to burn out on it. Part of training willpower is understanding your limits. No one has an unlimited supply of willpower . However, you probably have more than you think, you just need to learn how to build it, which can be especially difficult when it comes to money. These tips are more difficult to implement because they focus on restraint, but in the end they will probably pay off more (literally).