Avoiding Impulse Spending
We’ve all been there – standing in a store with a handful of things that you don’t really need. Or you could be the type of person who spends money just to have something to do. Or maybe you shop because you’re hoping to feel better about something. Anyway you cut it – it is impulse spending. Here are a few questions that you can think about and answer.
1.) Does your spouse or partner complain that you spend too much money?
2.) Are you surprised each month when your credit card bill arrives at how much more you charged than you thought you had?
3.) Do you have more shoes and clothes in your closet than you could ever possibly wear?
4.) Do you own every new gadget before it has time to collect dust on a retailer’s shelf?
5.) Do you buy things you didn’t know you wanted until you saw them on display in a store?
If you answered yes to two or more of these questions, you may be an impulse spender! Don’t worry though – we won’t toss you into retail therapy just yet. For many people though, shopping or just spending money in general is more than just a bad habit. There are individuals and families in North America that are racking hundreds of thousands of dollars each and every year because of their impulsive spending.
I’m sure you don’t need me to tell you how bad impulse spending can be. You already know that it will prevent you from saving for the big things such as a house, car, vacation, or even retirement. It doesn’t stop at just money issues though. It can also put a strain on your personal relationships – and I don’t just mean your spouse or partner. Your kids will pick up on the tension that surrounds anything to do with spending (not to mention the habits you’ll be passing down to them); if you’ve borrowed money from other people and they see you spending like mad – they will get upset with you; and of course money is a well known cause for divorce in this day and age.
Knowing that the problem exists is the first step. I know you hear that statement with every single problem management system out there, but it really is the truth. The next step is starting to set some financial goals. Make them small – even if it’s only a one week goal like not buying any coffee for the week and putting the money you would have spent into an account. Accomplishing goals is a major motivating factor for anyone. So start small, and build big.
Next, you need to start to understand the difference between your wants and your needs. This can be hard to do especially if you are a long time impulse spender. One way you can help yourself with this it to give yourself a mandatory waiting period before any purchases. If you can wait for 24 hours, that’s great! If all you can muster is an hour – then it’s a start. There are also some other ways your can help to manage your spending such as leaving your credit cards and debit cards at home. Make a list of things you need to purchase and bring enough cash to cover the cost. If you see something that you want to buy, you won’t have the ability to purchase it on the spot. The premise behind this is that in the time it takes you to go home and get back to the store, you can determine if the item is a want or a need.
What tricks do you have to manage your spending?