“If you buy what you do not need, you steal from yourself” – Swedish Proverb
Most of us have found ourselves making impulsive purchases. How often have you used (or heard) phrases like, ”I deserve this buy” or ”This is my reward for working so hard “, or “I’m buying it at a discount”, to justify buying more than what we should?
There are different reasons why people overspend. Some do it to relieve stress or to while away boredom. When you spend money, it triggers a brief dopamine rush (feel-good sensation), allowing you to cope with stress, loneliness, or a tough or boring day. This motivates you to repeat those behaviors. Also contributing to your overspending is the convenient and easy access to digital payment . The one-click checkouts, buy now-pay later schemes and mobile wallets require very little effort to buy almost anything at an instant. Not having a clear tracked budget – what you spend on or where your money is going, makes you underestimate your spending until the bill comes. We thought we still can afford, until we cannot.
There was a point in my younger life that I became a victim of overspending. I was a self-confessed impulsive buyer. My friends used to joke that my heart would palpitate every time I see a ‘SALE” sign. I would stash stuff “in case” I will need them, which usually didn’t happen. I have given away clothes that still have tags on them.
Until I realized and accepted the fact that I was overspending on things that I really didn’t need. As I matured, life taught and showed me what truly matters and that having those excess baggage are not necessary. It wasn’t easy but the following helped me overcome the temptation to overspend.
Follow the 24-Hour Rule – I wait at least 24 hours before buying things that are non-essentials. When I do my online shopping, I dump all my choices to the “cart” and go back to it after a day or two. And almost always, I would end up only buying 10% of what’s in my cart. This rule prevented me from doing those impulse purchases.
Avoid using credit cards – Until I have learned the art of disciplined shopping, I didn’t use credit cards, especially when abroad. Since there is physical cash, it was easier for me to budget my spending. Zero cash means no more buying, regardless how I want it. This inconvenience made me to be more mindful of where every peso was being spent on. You may still use your credit cards for your essential purchases but for your discretionary spending, I suggest you have a pre-set amount of physical cash instead of using credit card.
Track spending – know your spending habits and identify leaks. Do you know where your money goes, where you spend them on? How much is spent on needs, how much on wants? Do you really need those subscriptions? Do you need to eat out as often? One very helpful technique is always shop with a list and stick to it. Whether you’re shopping in physical store or website, be clear of what you need to buy, why you’re buying it and your spending limit. This will help you avoid impulse purchases.
Identify triggers – Have you paid attention on when you usually do the spending on non-essentials? Was it when you’re stressed, bored or sad? Are you easily triggered by those SALE signs or alerts? Or by those Buy Now, Pay Later schemes? Knowing what triggers your urge to spend will help you avoid them. Reduce your mall time, deactivate those sale notifications on your phones, block shopping websites or minimize your exposure to social media ads. Instead of spending it scrolling on your FB page, convert your idle time to productive activities like reading books, exercise, gardening or cooking.
Automate Savings – Money that is available is spent. The goal then is not to have money in your checking account that can easily be accessed. Set up auto bank transfers so that a specific amount of your paycheck goes directly to your dedicated savings or investment accounts even before it reaches you. You can even have your savings/investment accounts locked for a definite time so you cannot easily withdraw them when there’s an urge to do so.
Doing the above does not mean depriving yourself from those little guilty pleasures. You are still allowed to do those discretionary spendings but this time you are doing it intentionally and more mindful. Spend wisely now for a better future you.
