Chances are you aren't spending your paychecks on expensive sports cars or high-powered speed boats. Instead, your paycheck is trickling away on drinks after work, sale items at the store, and the occasional outfit. Small, daily impulse spending can quickly lead to an empty bank account. Curb your spending with these five simple exercises.
1. Track Everything
The best way to curb these impulse spending is to track each purchase. Whether it's using a check ledger, an online tool, or a scrap of paper, keep track of each purchase throughout the month. Write down the expense before you actually buy the item. On paper, it may not seem that necessary and prevent the purchase.
2. Enact a 48 Hour Waiting Period
Impulse buys are rarely necessities. Often, they are niceties that happen to be readily available. Your coffee maker may work just fine but if you find a brand new Keurig on sale, you may find yourself considering the purchase.
Cut this behavior out entirely by making a 48-hour waiting period. Choose an amount you're comfortable with such as $5 or $10 and any purchase higher than that amount needs to go through a 48-hour waiting period before purchase. This ensures you spend money on necessities and prevents impulse spending.
3. Create a Budget
Having a budget and tracking your expenses is a basic behavior that helps you save money. Setting up a fool-proof budget with free online applications, like Mint, or purchased budget tools, like You Need A Budget, will allow you to track your expenses without lifting a finger. Prioritize sitting down every month and reviewing your budget. Just observing where money was spent will help you avoid impulse buys during the next month.
4. Set Up Reminders
Even people with the best intentions find themselves slipping into their past spending styles at some point. Having frequent reminders can serve as a powerful tool for preventing impulse spending. Sign up for financial news letters or financial blog rolls so these reminders show up in your mailbox and inbox unannounced and repetitively. If you're successfully avoiding impulse spending, the information will provide great tips for continuing to save. If you've relapsed into frivolous spending, they will motivate you to avoid future impulse spending.
5. Get a Buddy
Whether it's a spouse, a friend, a relative, or even a stranger on the Internet, get a budget buddy to help you prevent impulse buying. Having someone to talk to about your budget goals and implementation will provide accountability and a fresh set of eyes to review your spending and suggest places to reduce impulse buys. Looking at another person's spending habits can also motivate you to reassess wants and needs within your own budget.
In conclusion, curbing impulse spending is essential for maintaining a healthy financial life. By implementing these five strategies, you can take control of your finances and prevent small, seemingly insignificant purchases from draining your bank account. Start by tracking every expense, which makes you more aware of your spending habits and can discourage unnecessary purchases.
Enacting a 48-hour waiting period for non-essential buys allows you to differentiate between wants and needs, reducing impulse buys significantly.
Creating a budget and regularly reviewing it helps you prioritize your expenditures and stay on track with your financial goals. Setting up reminders through financial newsletters or blogs keeps you informed and motivated to stick to your budget. Finally, having a budget buddy provides accountability and a different perspective, helping you to stay disciplined and avoid frivolous spending.
Together, these tips create a comprehensive approach to managing your finances effectively. By being mindful of your spending and making deliberate choices, you can ensure that your money goes towards what truly matters and build a more secure financial future. Implementing these simple yet powerful practices will not only curb impulse spending but also promote long-term financial health and stability.
