Summary
Bank Account.. When I started teaching personal finance, I made the error of thinking that those who struggled to manage their money only required more commitment and direction. I fell victim to many of the clichés and out-of-date personal finance advice from the early 2000s, such as “Just cut out your daily coffee to save more.”
I was in error.
In retrospect, I see that excessive spending is influenced by a variety of other things. Although it can exacerbate the situation, a lack of financial literacy is typically not the main cause.
Spending excessively may be a sign of a more serious issue that makes it difficult for you to restrain your desires. For instance, you might see that when you’re lonely, anxious, exhausted, or stressed, you tend to overspend. However, if any of these situations are happening to you, there are solutions to reduce your expenditure.
Here are some unusual strategies from me as the CEO of Save My Cents and a money coach to help you resist the need to impulsively buy.
Never go shopping when you’re hungry
You can’t think properly when you’re hungry, and you “are not yourself,” much like in those Snickers advertisements. Although it’s common knowledge that you shouldn’t go food shopping when you’re hungry, studies reveal that when you’re hungry, you’re more likely to overpay overall. According to a University of Southern California study, those who shop when they are hungry often spend 60% more than those who buy when they are not as hungry.
It’s also not shocking. Wanting is triggered by hunger. You’re more likely to try to overspend in an attempt to sate this urge if you shop before you eat.
Try eating before you head out the next time you’re getting ready to run errands. Pack a snack in your luggage or car if you’re not hungry so you always have something to eat in case you get hungry and are tempted to buy food or other items that could increase your spending.
Online shopping is subject to the same regulations. If you are a regular impulsive buyer, start by assessing how hungry you are. Take a break, get some food, and then decide if you still want to buy it if it has been a few hours since your last meal.
Assess your degree of stress
Your capacity to make decisions may be hampered by stress. It makes it more difficult to stay within your budget since it throws your body and mind into fight-or-flight mode. After a demanding workday, you might order DoorDash takeout since you’re too exhausted to think about what to do for supper. Or, if you just want to decompress, go through Amazon. While it may feel wonderful to use shopping as a stress reliever occasionally, doing so over time might have a negative financial impact. You also won’t be dealing with the root of the problem.
Being cognizant of your current mental and emotional condition might be helpful at times. “Okay, I’m not in the best frame of mind right now. Let’s exit that shopping cart and come back to it another day,” is a nice statement that you can make. Other methods of rewiring your emotions when under stress can also be found. Before making any financial decisions, try taking a stroll or watching a show to help you decompress.
Put a 24-hour shopping freeze in place
Have you ever bought something on the spur of the moment that you later regretted and wondered why you did it in the first place? Everyone has. You can have more time to decide whether a new purchase is necessary or fits with your budget by putting it on hold for 24 hours. Apart from necessities, I prefer to wait to swipe my card until I’m sure of my choice before making a purchase.
This is how it works: Before checking out, give yourself at least a day to consider any purchases you are considering making. You can put things in your online shopping cart and forget about them till the next day. This advice, according to many of my clients, allows them to control their impulsive impulses and decide whether the purchase is in line with their financial objectives, values, and budget.
A bonus for holding off for at least twenty-four hours? You may receive an email coupon or discount from certain shops.
Read product reviews from users who have had the item for a few months.
Like me, you undoubtedly get delighted when you make a new purchase, whether it’s an iPhone, headphones, or a vacuum. However, we frequently develop a perfect expectation for the item we are purchasing. You may be led to believe that something is better than it truly is by using this line of reasoning.
For example, you might come across a brand-new espresso machine that has all the features you desire. You may rationalize your desire for the item by pointing out that it will save you money by eliminating your daily coffee run. We then utilize this logic to support the purchase and prevent disappointment, even if your espresso maker isn’t as amazing as you had planned.
(I’ve previously used a Dyson vacuum cleaner and fell into this trap.)
But as soon as something stops being novel, we start to see things more objectively. Maybe you may concede that the new espresso maker is too pricey to maintain or too hard to use. I suggest reading product evaluations from people who have owned the thing you want for a few months or more to avoid finding yourself in this predicament again. You might want to reconsider your purchase and go with a less expensive option if the reviews from previous owners are extremely critical or negative. If you experience similar problems, at the absolute least, make sure you can return it with ease.
Avoid being duped by influencers: This advice may seem counterintuitive at first, but it has the potential to change your perspective. A lot of individuals buy things they think will bring them happiness, success, or other things they think are out of reach.
Have you ever bought something because you saw an advertisement for a lifestyle you wanted to pursue, or because you were influenced by a social media account you follow? Everyone has. However, nothing spectacular happens to your life when that item comes. Alternatively, you might have to deal with an additional object occupying room in your home and an ever-expanding credit card debt.
Even now, I have to constantly remind myself that not everything is better on the other side and that what individuals choose to publish about themselves on social media is who they are. Your ideal lifestyle may not be as achievable as the person you follow portrays it to be.
Just my two cents
Despite my expertise in personal finance, I do not advocate imposing excessive regulations on expenditures. Consider these suggestions as guidelines to assist you determine whether or not the purchases you make are improving your life and when you are likely to spend more money. It all comes down to maintaining a positive relationship with both saving and spending.