Impulse spending is a huge problem for a lot of people. Our inability to keep our hands out of our pockets every time something new and shiny appears is a huge contributor to our pathetically low savings rates.
So how do you go from being an impulse shopper to a saver? You might want to:
Figure out what’s triggering your spending. The best way to do this is to keep a journal where you note each time you shopped, when you bought something (day of the week and time), and why you bought it. If you can begin to get a grip on how your stressors and life patterns feed into your spending, you can find ways to save. Do you shop when you’re bored? When you’re sad? When you’re mad?
Distinguish “needs” from “wants.” People tell me all the time that they can hear me in their heads: “Is this a need or a want?” If you can internalize this question, asking it each time you get the urge to plunk some money down, you’ll be more conscious of your spending.
Decide if this is the best use of your money. This is where the rubber meets the road. If you spend this money and you really should be saving it, how will you feel later? If you have suffered from buyer’s regret it may be because you haven’t stopped to consider what else you might need to use the money for before you shopped.
Don’t set your goals too high. Nothing is more frustrating than a goal that’s out of reach. If you want to save six months’ worth of emergency money, your first goal may be to have $500 saved. Then you’ll aim for $1,000. After that, you’ll try for one month’s worth of essential expenses.
Reinforce your savings behaviour. If you’re going to swap the “feel good” of spending for the “do good” of saving, you better build some feel-good aspects into the process so you stick with the plan. Tracking your savings visually is one way to reinforce your positive decisions. Building small treats in along the way is another. Remember, deprivation is a setup for failure. So as you work towards and achieve your savings goals, give yourself an attaboy along the way.