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Controlling Impulse Spending

Impulse spending can be a real problem if you are trying to be smart with your money. If you are the type of person who just can not control their destructive spending behaviors, we may be able to help you. Take a look at some simple tips that can keep your money in your wallet.

1) Create A Simple Budget

If you do not already have a budget, getting one should be your first step if you want to control impulse spending. Think of your budget as your roadmap to responsible spending. It should account for every dollar of your income, leaving nothing to chance.

While this might seem like an incredible pain, it really is very simple to create and live by a budget. There are numerous templates online, but you do not have to get that fancy. Just having a list of all of your expenses, preferably in spreadsheet form, will do. With all of your expenses laid out in front of you, it is easy to compare it to your income and create a balanced plan for spending.

With a budget in place, it is simpler to see how your impulse spending can affect your finances. Ideally, this will help you curb your impulse spending.

2) Leave Yourself Some Fun Money

If you are an impulse spender, you are not going to be able to quit cold turkey. It is probably so ingrained in who you are that it will take some time to erase the habit. To prevent spending withdrawals and make life a little more fun for you, leave a little fun money in your budget.

How much you decide to leave for discretionary spending is up to you and your level of income. One or two hundred dollars is not an unreasonable amount however. Just make sure that it is enough to do something fun but that it is not too excessive.

Additionally, make sure that you still have money in your budget earmarked to savings. Ideally, your savings amount should be equal or greater than 10 percent of your take home pay.

3) Set Attainable Goals

It will take some form of motivation to quit spending with reckless abandon. To give yourself this motivation, set some financial goals. These goals could be paying off a credit card, saving for a vacation or really anything that motivates you.

The key with your goals is to make them attainable in a reasonable time period. For example, you don’t want your goal to be retiring in twenty years because it is too far out in the distance and you will lose sight of it. Make your goal something that you can accomplish within a few months. You can then use it to motivate your reduced impulse spending. Since your frugal spending will be easily seen in reaching this goal, it will motivate you to carry on.

4) Unlink Your Credit Cards

If your credit card numbers are stored in your shopping apps, you are making it far too easy to impulse spend. Saving these numbers is really only doing the retailer a favor because it increases sales. You might be surprised at just how much you will lose interest in a purchase if you have to go chase down a credit card.

But what if you have those credit card accounts memorized? This can be just as damaging as having your card information stored, so go ahead and request some new cards. While you are at it, delete those apps from your phone as well. The harder you make it to shop, the better off you will be financially.

5) Make Purchases With Cash

Speaking of credit cards, let’s talk about not using them at all. Our connection to credit cards is fuzzy at best. It almost seems like the costs are not real when you charge it and for some reason, carrying credit card debt has become okay.

Cold hard cash is another matter altogether. We have a physical connection with our money and it is harder to spend it. It is much harder to lay a 100 dollar bill on the counter than it is to swipe a piece of plastic. Switch to making purchases with cash and you will see for yourself.

While you are at it, take it to the next level by implementing the envelope system. Take some envelopes and label them with certain variable expenses like food or entertainment. Then, fill them with the amount of money you have budgeted for these expenses. Once that cash is gone, it is gone and that should make you think twice about impulse spending. There is nothing worse than needing more money at the end of the month and not having it. That may help you change your spending behavior.

6) Institute A Wait Period

Impulse spending is just that, spending on an impulse. If you can institute a waiting period before making large purchases, you will usually find that the impulse goes away. But how long of a waiting period and what should the dollar threshold be?

For most people, a 24 hour wait period works best for moderate purchases. What is moderate to you will depend on your income and overall budget. For some, a purchase limit of 100 dollars might be appropriate. For others, 200 dollars or more may be more the best number.

You should also give some thought to major purchases and set another waiting period. An example might be a two week waiting period for any amount over 600 dollars. That will give you plenty of time to think about getting into a major money issue.

7) Make Shopping A Chore

If you spend for fun or shop when you are bored, you need to change this habit. You can tell yourself not to spend as much as you want, but if you are constantly putting yourself in positions where you are tempted, you will eventually break.

Instead, make shopping a chore or a means to an end. You need a new shirt, so you go to the store pick one out and go home. You don’t want to spend hours shopping the outlet malls and you certainly do not want to make a day out of your shopping event.