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Are you in the habit of impulsive spending? Do you often find you’ve got a lot less cash to spare at the end of the month than you thought? It’s time to reconsider your money habits to curb your impulsive expenses! You don’t have to cut out life’s luxuries, either – in fact, working on your must-have-it-now tendencies will leave you with MORE spare cash to invest in the things you REALLY want.
Here’s how to curb your impulsive spending habits in 2021 – without feeling like you’re missing out.
We don’t mean calling your credit card company! Although, if you have several cards, it might be worth shifting all balances to one 0% interest offer card if you can. That’s purely to save on interest payments, though. It also doesn’t mean you can suddenly spend more on your newly-empty card!
What we mean by freezing your credit card is – quite literally – freeze it. Put your card in a Ziplock bag with some water. Stick it in the freezer. If you want to be super-savvy, wrap the card in paper towel first too – that way you won’t try squinting through the ice to read the details! Doing this forces you to decide whether you REALLY need to make a purchase. You need to wait for the ice to defrost – and that means you have time to think carefully about buying.
It’s an old trick, but it still works!
The modern version of this tactic, however, is also worth your time. We’ve got Paypal, stored payment details on retailer accounts, and even Google can save your payment information if you want. That’s before we look at smart tech like Apple Pay and Samsung Pay, where you can make purchases with your smartphone or smartwatch!
Take time to unlink ALL of your payment cards from every online account you can think of. It’ll take an afternoon to list everything and go through them all – but it can really make a difference. While you’re at it, think about the apps you have on your phone, too. Do you want to spend less on takeaways, for example? Delete Deliveroo! (And remove One-Click Buy from places like Amazon, too).
Making yourself take an extra step to complete any online transaction – by deleting your stored payment details – puts you back in control. You’ll have to consider if you really want the purchase before you take time to find your payment card and fill in the details.
Impulsive spending is a hugely common habit – but people do it for many different reasons. They might have previously had more spare cash to spend and developed a spending habit. Or, they spend for an emotional boost. Others spend to make people happy, such as giving gifts. Some have a ‘keeping up with the Joneses’ impulse – driven by social media ‘influencers’ making them feel inadequate.
Finding out why you overspend or spend impulsively is key to curbing your expensive habit. The best way to do this is through therapy. These days, it’s not about lying back on a couch in a stuffy office, either! You can access therapy online, over the phone, or even by email. Individual therapy is a great thing to do for your overall wellbeing – but if you want to find out why you’re an impulsive spender, your therapist can help you dig into that specific part, too.
Getting the right therapist is about trial and error. Find one that understands your background, specialises in addictive behaviours (because impulsive spending is one), and who you feel comfortable talking to. That might mean trying a few therapists to discover one you’re happy to work with – so don’t give up if your first attempt doesn’t ‘feel right’.
BetterHelp has tons of info about using therapy for emotional regulation skills at https://www.betterhelp.com/advice/therapy/bring-more-balance-to-your-life-with-emotion-regulation-skills/. There’s also a ton of info on the site about different types of individual and couples therapy – and how to find one right for you.
Impulsive spending leads to debt. If you’re already in debt, focus on stopping your unnecessary spending altogether so you can pay off your loans, credit cards, and overdraft. This is better for your mental health as it’ll stop you falling into an overwhelming debt-stress cycle.
However, if you’ve realised your spending isn’t yet putting you into debt, now’s a good time to start managing it well. Instead of spending from your main bank account, set up a separate pot (or even bank account) that’s just for your extra expenses. Work out a budget for the month – set aside your essentials such as rent or mortgage payments, food bill, utilities, phone and internet, and travel costs. Set a further amount aside – say 20% – for emergency costs. Pop 10% in a savings account. Whatever is left – that’s your ‘fun money’. Shift this into your spending account!
Doing this helps you regulate your spending – and makes sure you’re saving something, too. You can still spend on the things you want each month – but the amount is limited and using a separate account means you won’t be tempted to dip into your essentials money.
Therapy will help you consider your spending behaviour and your ‘why’ – but you need a way to actively stop spending excessively, too. The best way to do it is in two steps:
First: ask yourself, “Do I need it or do I want it?”. This helps you define whether your purchase is a necessity, or if you’re spending for a different reason (such as to cheer yourself up, make someone else happy, or find validation in material things).
Second: don’t buy immediately. Give yourself AT LEAST 24 hours to consider the purchase. Do this for both online shopping and when you’re visiting bricks-and-mortar stores. If you’re in a shop and think ‘well, I don’t want to come all the way back tomorrow’ – you don’t want the item enough, anyway!
Pausing before you buy will help you decide if you really need to make the purchase, or if there are other things you can do instead of spending. For example, if you want to cheer someone up with a gift, give them your time or make a homemade item instead. If you want to buy something to cheer yourself up, look at other ways to do so, such as releasing endorphins through a long woodland walk.
This might feel counter-intuitive, but trust us, it works!
Take a weekend to sort through ALL of your clutter. Under the bed, in the wardrobe, clear the attic and the garage. You’ll be surprised at how much stuff you already have! Sort your items into Keep, Donate, and Sell piles.
Doing this works on impulsive spending on a few levels. Firstly, it helps you rediscover things you’ve already got – you might find a Little Black Dress you’d forgotten all about, instead of the one you’ve been eyeing up in the sales. Secondly, you’ll feel better for clearing your clutter – an emotional burden we often don’t realise we have. Thirdly, you might feel shocked when you realise just how much ‘stuff’ your impulsive spending habit has gathered over time. (Try adding up what you’ve spent on these items over time, too – that’ll certainly jolt you into wanting to save!).
Finally, it provides you an opportunity to recoup some of the cost of your impulsive spending habit. You can choose to do two things with the cash raised from selling your unwanted stuff: put it in your ‘spending only’ account, or save up for something you REALLY want in the future. It’s up to you!
Impulsive spending leaves us with far less cash at the end of the month (or negative amounts!) than we’d like. Read these articles next to discover more ways to save more money each month and live a financially free life.