How to Stop Spending Money on Impulse Buys
We’re all guilty of spending money where we shouldn’t sometimes. When that cute blouse, new book or upcoming concert catches your eye, it’s hard to say no. After all, you work hard for your money, you should be able to indulge every once and a while. But what happens when those impulse buys start to become a bad habit? If your discretionary spending is hurting your checking account balance, check out these budgeting tips to save money without giving up buying the things you love.
- Get a clear picture of your historical spending: The key to cutting back is recognizing where you’re spending money. Use a tool like Quicken® to track the categories where you’re spending money like household expenses, groceries, clothing, dining out, bills and impulse buys. You may even be able to set up Quicken through your online banking so your purchases and payments are automatically tracked. You should also take a look at receipts – you may have spent $400 on groceries, but how many of those items were on the list when you walked into the store? Take a look at where you’ve been spending your money for the last three months and highlight the items you know were discretionary or impulse purchases. Make sure you look at both your checking account transactions and credit card receipts.
- Know why you spend: Once you know where your money is going, the next step in how to stop spending money impulsively is to figure out why you’re spending it. You don’t have to cut out every impulse or discretionary purchase at once, you just need to take a closer look at your finances and eliminate a few unnecessary purchases each month. Do you tend to spend more when you are stressed, had a bad day, or had a really good day? Once you know where you’re spending the money and why, create a budget that will allow you to save more and plan out your discretionary spending.
- Create a discretionary spending budget: Starting with your paycheck, subtract all your necessary expenses like insurance, loan payments, rent, utility bills and so on. Then, look at the “necessities” included on your monthly grocery and clothing lists and determine how much you need to spend to get by. Now, set aside some of what is left for charitable donations and grow your savings by contributing to standard, emergency or high-yield savings accounts.
Finally, create a budget for expenses like impulse buys, vacations, dinners out, clothing and music purchases, and use what’s left to spend on hobbies. One way to track your spending money and stay within your budget is to pay as many bills as you can right when you get your paycheck. Then, contribute to your savings and use what remains for discretionary spending.
- Find ways to enjoy what you love without breaking the bank: Just because you’re spending less doesn’t mean you have to have less fun! Look for ways to spend less for the same experience. Here are a couple of budgeting tips to get you started:
- Buying more when you’re hungry? Eat before you go grocery shopping, and make yourself a list of what you need. You can still include a treat or two, but adhering to the list will help you stick to your budget.
- Retail therapy breaking the budget? Consider other, less expensive outlets for your stress like exercising or cooking dinner with friends. When you need a pick-me-up, limit yourself to something under $10. (But keep these purchases few and far between.)
- Email blasts prompting you to shop sales? It can be hard to ignore those 50% off emails. But if you really need to curb your online spending, unsubscribe for a while to reduce the temptation to shop.
- Love those season tickets? Consider purchasing tickets for one or two games and hosting parties at your home or a friend’s home for other games instead.
- Are you a fashionista? Find a fellow friend who can’t stop shopping and swap wardrobes for a season. You’ll get a new look at next to no cost! When you do buy new clothes, limit yourself to three new tops and two new bottoms, matching them to clothes you already own to create more new outfits.
- Can’t stop buying best sellers? Borrow from friends or the library first. If you really love the book and would read it again, go back and buy it.
- Country Club membership a little too much this year? Consider joining a public course to get in your time on the links.
Save up for purchases instead of succumbing to the impulse buy
Even a great budget won’t cure the urge to shop. When you come across something you weren’t planning to buy and think you have to have, leave it on the shelf or put it on hold for now. Think about it for a few days and decide if it’s worth giving up other purchases. You may even find you don’t want it five days later. If you find it fits in your budget and you still want it after some time away, then go back and buy it. Planning for discretionary purchases will help you limit when and where you’re spending your money.
Sponsored content was created and provided by RBS Citizens Financial Group.
It’s so important to avoid impulse spending. It is difficult to get out of the bad habit, but once you do you can save tons of money. It’s very freeing being able to walk out of a store not having purchased anything.
I use a list most of the time I go shopping and if it is not on the list I don’t buy it.
I think a cooling off period is a good way to control impulse spending. Some people say you should wait a week, but when you’re at the mall and you know you are going to make a decision on the spot, you can even take 30 minutes where you leave the store that has the item you’re considering, take another circle around, and evaluate whether you really want to make that purchase. In a lot of cases you will come back with a ‘nah’ answer and not even bother heading back to the store.
Good point Michael! On large purchases I always take my time and research. That gives me the time to make sure I really need the item.
Tracking your spending is a huge first step. You’ll see what you spend on and will be surprised at how much useless stuff cost. Great tips on discretionary spending. I find that waiting a few days usually cure my need to buy most stuff.
So true Joe. You will have a difficult time controlling spending if you have no idea what you are spending!
I have gotten pretty good at controlling my impulse buys. In the past, I have probably been one of the worse impulse buyers you can come across. Need a widget? $500? No problem. the two key things that have helped me break that? A discretionary budget and the capability to look at what I want to buy and classify it as a “WANT” or a “NEED”. Almost all of my impulses to buy are “WANTS”.
I like your point about want vs need. I teach a personal finance class to junior high students and we did an exercise in needs vs wants. When you are paying the bills it begins to have real meaning!
We rarely make impulse buys and when we do its from a savings account that we contribute to monthly that is designated specifically for impulse buys. I keep hearing great things about Quicken we will have to try it out.
We saved a lot of money on groceries by following these principles. We also started planning our meals significantly in advance, so that we could take better advantage of sales when they came up. We knew better what to keep on hand in the freezer and avoided so many stops. We are also going to join a CSA this summer to have lower prices on produce.
These are hard habits to break. I cannot tell you how many times I see clients out of control on this stuff. They are always behind on taxes and on managing their affairs. Most times it never changes. Year in and year out they just cannot change their behaviors. The tips you offer are good ones but for many they fall on deaf ears. Bad habits die hard.
Impulse spending is all about learned behaviors and satisfying emotional needs. It is very difficult to change behavior especially when there are underlying emotional issues that have not been dealt with.
It’s so true. Control the discretionary spending and you are rocking! Write it all down, get it to bare bones, and then build it up again. Thanks for the great post!
It is a simple process but the difficult part for most of us is the doing without part. We are used to a certain lifestyle and sometimes it is difficult to say no. I personally have no problem saying no or making due with what I already have.
We all have to learn how to avoid spending money on things which are not necessary. This is a good post since it provides pointers to consumers. A system of budgeting is what most people need. It helps you avoid impulse spending. The bottom line is to save enough money for the rainy day.
I use Mint on my iPhone to keep track of my spending. Makes it easy to know where my money goes because I have the information at my fingertips. One of the easiest ways to avoid spending money you don’t have is to leave the credit cards at home and use cash. If you don’t have the money it’s tough to spend it!
I find the most difficult time to stop impulse buying is when i’m hungry and go shopping in the supermarket (for groceries), I end up with lots of food I didn’t really need.
I think we all can relate to that Thomas. I try not to go food shopping when I am hungry.
Great ideas! The most important step is being aware of where you are spending too much. If we look at that, it may shock us into reality. Love some of these tips!
Mint is a great way to know what you spend by category. I avoid most impulse buys by just not leaving any room in the budget and then following it.
Buying things you don’t need and in fact never use destroys money. Just like repairing your house after a gale has blown the roof off, or fixing your car after someone has pranged it. This is all money that can only be spent once – yet the act of spending it helps to keep someone in a job even if it makes you poorer.
But that’s why the banks have to keep generating money otherwise we would end up in permanent recession and nothing would get done. It’s all entropy really.
I’m big on the saving up for something you want to buy. If you want it that bad, you’ll find a way to save up for it. Even if it means selling some of the other useless junk that you really wanted and bought in the past
. Need vs. Want is something everyone should think about whenever they are considering a purchase, especially a large one!
There are so many ways to transition out of bad spending into good spending. Granted, spending by itself is not necessarily good or bad. Many would argue if it is more impulse than not that it can become a problem.
Imagine this with many guilt purchases like on alcohol or tobacco. What do these provide for someone? A getaway, pleasure, satisfaction, perhaps just the purchase alone feels great. I wonder what it would be like to replace those with more financially responsible vices or purchases. For example, take the most risky components of investing like forex, domain names, or collectables. The same “high” could be achieved from the impulse but, there is the opportunity for a potential appreciation in the purchase.
Obviously, I’m not recommending one stop buying smokes and clear the bank account to start trading currency, I’m just wondering what the implications are for this. Does the impulse that creates that rush and high come from the fact that it is not supposed to be done, that it is breaking the rules? Or is it more of the addictive properties of that impulse buy?