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Saturday, January 14, 2012

Tips To Control Impulse Spending

Do you have a problem with impulse spending? If you don’t know how to answer this question then look at your latest credit card statement. Can you pay it off in full?...

If the answer is no then you might have a problem with impulse spending. Also, I want you to think and give yourself an honest answer to the following questions:

Do you go to Walmart or Target to grab “one quick little thing” and come out with more than you went in for…lots more?

Do you buy things just because they were on sale even though you really did not need them?

The first step in changing this habit is realizing you have a problem and then doing something about it. Impulse spending might be the way you spend money and you might not think of it as a problem.

However, if it’s causing you to go into debt because you fund many of your impulse buys with a credit card that you can’t pay off at the end of the month…or you just “can’t find” the money to create an emergency fund or put money into savings or investments then impulse spending could be a problem for you.

Once you realize that impulse spending is an issue for you the following tips can help you deal with it:

Buy with cash – leave the credit card at home or better yet get rid of them completely and purchase only with cash. First benefit of this is that you will feel the hurt of your impulse spending more deeply if you have to pull cash out of your wallet to pay for it. Second, it will prevent you from spending money you do not have.

Make a list and wait 30 days – when you think of that thing you “must have” or you see it online, or on TV go ahead and jot it down, make a list of things you want to buy. This helps you prioritize whether there is one thing you want more than another. It also allows you to save money towards their purchase and finally after 30 days you might find you no longer want that thing you though you needed to have.

Don’t use the mall for entertainment – the good ‘ol American mall has become one of the main sources of recreation for many. However, the reality is that malls are designed to make you spend money on something…anything…from the moment you walk in the door. Do your wallet a favor and just don’t go to the mall for entertainment or recreation. The park, visiting a friend, a walk through town, a movie, a potluck dinner, etc…are much better choices for entertainment.

Watch less TV – ever heard of commercials? That is mostly what TV is…a constant bombardment to convince you to buy things you don’t need with some entertainment sprinkled in for variety. Sure advertising is everywhere but nowhere as pervasive and constant as TV.

Don’t use shopping as a past time or hobby – although hobbies can be quite expensive shopping itself is not a hobby or at least it should not be unless you have a lot of money. If shopping is the way that you socialize with your friends then try to suggest a different activity to share with them.

Reconsider your friends – If you know that going out with Joe or Jane means you are going to come back at least $50-100+ poorer then reconsider your friendship or the way you interact with your friend if your wealth and getting out of debt are important to you.

Save – Don’t get me wrong, I am not saying “live like a monk”…I like gadgets and stuff as much as anyone else. So if you want something then go ahead and save for it and by all means buy as much as you want as long as you have saved the money to pay for it.

If you have any other tips to control impulse spending feel free to share below…

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  1. Shane in TX3/15/12, 9:22 AM

    i think you should include Debit/bank cards here with credit cards. I've fallen into the trap of not carrying cash because "the money's in the back" and whipping out the bank card to pay for whatever little things that eat up the budget each month.

    CASH is king when trying to live on a budget.

    1. That is a very good point. It always "hurts" a bit more when you have to pull a paper bill from your wallet to pay for something. When you see those bills slipping away from your fingers you are a lot more aware of your expenses. Which is why credit cards are so effective at putting people in debt...


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