Have you ever made an impromptu purchase without regard to the impact it might have on your financial health? Well, you’re not alone. This is called impulse spending, and for many people, it is the most difficult aspect of personal finance to adopt. But, before we go too much further, let me first provide a clear answer to the question, what is impulse spending?
Impulse spending is the act of spending money without prior consideration to the effect it will have on your overall financial health. As opposed to prudently budgeting and saving for a future expenditure, impulse spending is a spur-of-the-moment and often careless financial act.
In fact, controlling your urge to spend money impulsively might be the most important step you can take to build future wealth. So, in the rest of this article, we are going to cover 10 easy tips to control impulsive spending.
Let’s dive right in.
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1. Get On A Budget
One of the easiest ways to fall into the bad habit of impulse spending, is to live without a budget. You see, when you live without a budget, you remove any real form of personal accountability in your finances.
So in essence, there’s nothing to measure if you’ve spent too much, or made a poor financial decision. And that’s really what impulse spending is.
The first, and most important step you can take to control your impulse spending, is to create a budget, and stick to it. That way, you know exactly how much money you have to spend beyond your living expenses.
It’s easy to spend money impulsively when you are unaware of the negative financial impact it will have on your life. The problem is, impulse spending often leads to buyer’s remorse. Personally, I would rather deal with the pain of walking away from an impulse purchase that didn’t fit my budget, than the consequences of an impulse purchase that hurt my finances.
2. Allow Yourself Some Fun Money
You’ll notice that I didn’t title this article, ‘how to stop impulse spending, forever.’ You know why? Sometimes it is fun to buy something spur-of-the-moment.
Rather, I think it’s important to control your impulse spending. And the best way I know to do that, is to allow yourself some fun money in your budget. That’s right, in your budget, you should allocate a specific amount of money to be spent on whatever makes you happy.
The key, however, is to operate within your budgeted amount. So, if you budget $150 for fun money each month, then you can buy anything you want — impulsively or not — as long as you spend less than $150.
As a metaphor, I like to think of fun money like a dog park in the middle of a city. You wouldn’t let your dog run wild through the traffic-filled streets of a crowded city. But, within the boundaries of a dog park your dog can run as wild as it wants without the risk of getting hit by a car.
Your finances are the same. As long as you operate within your fun money budget, you can spend money willy-nilly on anything you want.
3. Use The ‘One-Week Rule’
This might seem like common sense, but if you want to control your impulse spending, you should force yourself to wait a week to spend money on something you want to buy. I can’t tell you how many times I have waited 7 days to purchase something, only to lose interest in it altogether.
Some people do this over a 24-hour period, but I have found that 1 day is not enough. In fact, for me, my desire to make an impulse purchase often gets stronger over the course of 24-hours. On the flip side, some people go as far as waiting a month to make a purchase, which is even better.
Truthfully, the length of time you wait to make a purchase should be dependent upon how strong your urge to spend money is. Just allow yourself some time to calm down and think through the purchase, rationally.
The longer you wait to make a purchase, the less impulsive it becomes — even if you end up buying it.
4. Focus On Your Financial Goals
My wife and I have a whole slew of long-term financial goals. So, the thing is, whenever we choose to spend money impulsively, we are harming our long-term financial goals. Therefore, it is a very rare thing for us to spend money without first calculating the long-term impact it will have on our financial dreams.
That’s why setting and focusing on your long-term financial goals is one of the best things you can do to control your impulse spending. The only caveat here is that your goals need to be inspiring.
In other words, your desire to achieve your financial goals should overpower your in-the-moment urge to impulsively spend money. So, set some awesome financial goals, and do whatever you need to do to keep them at the forefront of your financial decision-making.
Related Content: What Does Financial Implications Mean?
5. Say ‘No’ To Retail Therapy
There’s nothing like treating yourself to an expensive purchase in order to lift your spirits. That is, until you look at your depleted savings account a few weeks later when the sadness has worn off.
Let’s be honest, retail therapy is just the sugar-coated name for emotional spending. And when it comes to solid financial decisions, emotions rarely play a positive role.
If you want to curb your impulse spending habit, avoid all retail stores when you are emotional. The last thing you actually need when you are sad or angry, is to take it out on your financial future. Emotional spending is a self-destructive behavior.
Instead of spending money, go for a run, go for a hike, go see a movie. Just don’t go blow your paycheck on crap you don’t need.
6. Budget And Save For Life Events
Life is full of wonderful moments. But most of life’s biggest moments come with a high price tag. And in the midst of planning and celebrating, it’s easy to spend money impulsively — and lots of it.
That’s why, if you want to control your impulse to spend money, you should plan well in advance for major life events. Saving and budgeting for moments like, your wedding, a new baby, a new puppy, an annual vacation, or a new house, will help you see the bigger financial picture and keep you from getting carried away.
7. Use The ‘Give-Before-You-Get’ Rule
This is, hands down, favorite tip in this whole article. If you want to control your impulse spending, you should practice the ‘Give-Before-You-Get Rule’. It’s extremely simple, and forces you to think through every purchase you make. Here’s how it works.
Every time you want to buy something, you have to either give something away, or sell something that is equal in value. So, if you want to buy a new sweater, you either need to sell enough clothing to equal the cost of the new purchase, or give an equal value of clothing to charity.
The thing I love about this technique, is that it forces you to take a hard look at the value of a purchase in comparison to what you already own. Plus a little bit of good comes from every purchase you make. Either you sell enough of your belongings to pay for it, you give something away to charity, or you don’t spend the money at all and stop yourself from purchasing something that won’t add value to your life.
8. Limit Your Triggers
When it comes to impulse spending, I know my weaknesses. For instance, my bank account is in danger any time I walk into a store, or visit a website that sells woodworking equipment and supplies. For my wife, she is weakest in stores like TJ Maxx or Target.
So, we consciously limit our exposure to these impulse spending triggers. And that’s exactly what you should do if you are trying to get a handle on your impulse spending. Here’s how to do it.
First of all, be honest with yourself about your desire to spend money. Where are you weakest? Maybe you’re like me, and you have a particular passion that you use as a way to justify impulse spending. Maybe you’re like my wife, and wandering through the shoe aisle is your greatest impulse spending temptation.
Second of all, figure out what is the initial trigger. For me, it is often a Home Depot ad in my email. For my wife, it might be an instagram post about a certain pair of shoes at Target that triggers her initial desire to buy something impulsively. Whatever it is that triggers your initial desire to spend money, identify it, and limit your exposure to it.
9. Don’t Shop For Groceries When You’re Hungry
Ok, this might be the most mainstream tip in this article, but I couldn’t leave it out. If you go grocery shopping on an empty stomach, you are playing with fire.
There is no easier place to blow your budget, or spend money impulsively than the grocery store. I should know. I have blown more money on boxes of cereal, Oreos, Pop-tarts, and cartons of ice cream, than I am willing to admit, all because I went to the store before dinner.
Even if you have to grab an $8 Chipotle burrito before you go grocery shopping, it’s better than blowing $30 extra on groceries you don’t need.
Related: How Much Should I Budget For Food?
10. Pay Cash
I left this one for last, because it is the ultimate fall-back plan. If none of the other tips in this article work for you, just pay cash for everything. If you just can’t seem to muster the discipline it takes to curb your impulse spending habit, then shred your credit cards, leave your debit card at home, and pay cash 100% of the time.
Impulse spending is a harmful financial habit. Though, with the right course of action, you can curb the habit, quickly. Hopefully the 10 tips in this article will help you get your spending habits in-control, and on track for a promising financial future.
Do you struggle with impulse spending? Do you think any of these tips would work for you? Or, what techniques do you use to keep from spending your money impulsively? Be sure to comment below. Here at Be The Budget, we love hearing from our readers.