How can you Reduce the Urge to Splurge and Stop Spending?
I’ll admit, I’ve been a shopaholic. At various times in my life I have spent up big, spent all I had, been in significant debt (to me) because of spending and hidden my spending at one point in my marriage, early on.
If I was meeting friends, we met at the shopping centre. Every week I bought new clothes before I had kids then once I had kids I bought stuff for them. Sometimes, the shopaholic in me blew money at Target or Kmart on nothing, other times I spent way over budget on food.
With this in mind, and knowing how and why I have been a shopaholic at times in my life, here are my tips to stop spending.
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1. Know why you Spend and What Void You’re Trying to Fill that void
Emotions were my leading cause, especially when I was younger. In my teens, I had issues with depression and self-esteem so shopping was used as an escape. A new outfit made me feel better for a bit. It never lasted long and I wanted that feeling as much as I could so every payday I bought more.
Realising the reason behind the desire to spend helps you determine how to end that cycle. As an adult, my spending has gotten out of control when I have felt unattractive or depressed, when my marriage broke down (it was abusive) and when I lived in Melbourne with a partner who was on again off again. I was miserable.
Knowing this, instead of going shopping, I aim to go for a run or catch up with friends at a park or at home. Finding an activity to distract me and not spend money helped curb my spending.
2. Sanity Money
Instead of blowing money every time you get it, select an amount you allow yourself to spend each pay, but don’t go over it. I call this sanity money (more recently, it has been called splurge by The Barefoot Investor) and it is an amount I can keep to do whatever I want with whether it be buying new shoes or going out with friends. It is no guilt, carefree spending money.
It helps limit the risk of overspending in other areas and means I am getting what I want without having to rework the budget, put it on the credit card or jump through any other hoops.
Check out how to create a budget and stick to it as well as how to stick to a budget as a single income family for more budget tips.
3. Leave the Cards at Home
Ok, this was more effective before cards were readily available on our phones and cardless cash available through ATM’s. When I leave the house I rarely take my purse with me now. Usually, it’s my phone, keys and headphones in my pocket, nothing else. This stops impulse buys because I don’t have the money on me to spend.
I have not connected my main cards to my phone. Instead, only my sanity money is connected to help curb spending.
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4. Block Sites
If you know you are likely to spend up a storm online, block the sites for a while. Chrome has an extension you can install called Self Control which allows you to block certain websites for however long you choose. Sometimes limiting your access is what is needed to stop the spending or reduce the urge.
5. Add up the Cost of all Your Purchases
How much have you spent unnecessarily in the last week? Month? Year? Add it up, go over your bank statements, look at items around your home and work out how much you have spent on stuff. When I did this, I felt sick.
While I do use most things, there were plenty of purchases that were completely unnecessary.
Once you have added up the cost, work out how long you had to work to make that amount. Once, when I saw I hated wasted $4,000 over a specific period, when I converted that to hours worked, it was devastating.
I do the time cost analysis for all expenses now. Knowing how much I have to work to buy something changes the value.
6. Sell What You Don’t Use
Now you see all the things you have bought and how much it cost you, sell off anything you aren’t using. You’ll quickly see you don’t get back anywhere near what you spent on the items and it is a lot of wasted time and money having bought these items.
Check out how to make over $10,000 a month buying things to resell for tips to do this effectively.
7. Work out Your Opportunity Cost
As mentioned in tip 5, work out the true cost. How much do you make per hour? How many hours did you have to work to pay for these items? That calculation alone often makes people feel uncomfortable. Take it further.
How much time did you spend shopping for and purchasing this item, how much time was spent moving it around your home, dusting it or cleaning it when you weren’t really using it?
How much time has it taken you to de-clutter and either sell or get rid of it from your home? Add those hours to the amount of hours spent obtaining the item. How much of your time and money was truly spent on this item?
Now, if you spent an hour browsing then buying something and another hour moving it from here to there in your home, listing it to sell and posting it, you’ve spent two hours on it. That is two hours lost. If the item cost $50 and you earn $25 per hour, that is another 2 hours lost because it is two hours you worked to pay for an item you don’t want, need or use.
Also, if it cost you two hours of time to acquire and dispose of the item and you earn $25 per hour, realistically, the item cost you $100 because those two hours spent on that item could have been spent working.
What could you have done with four hours? How often are you making these purchases that cost you time and money that would be better spent doing something to improve your financial future?
Next time you go to buy something, work out how much it is really going to cost you in time and money. Do you still want it?
Also read 18 time saving tips for busy mums.
8. Have A Cooling Off Period
Instead of buying something on the spot, have a cooling-off period, just like you do when buying a house. Give yourself one week or one month before buying it then at the end of that time if you still want the item, work out how it fits in your budget.
The bulk of impulse buys are forgotten about or not used. Instead of buying everything you want, give yourself time and space to truly determine what you want to spend your money on.
Personally, I use a delayed gratification list. It’s a note on my phone I can access anywhere and add to. Anything on there, I have to wait 30 days before I can buy it. Most of the time, I don’t buy it.
9. Stop Notifications
Cancel store emails, unsubscribe from everything you can, unfollow your favourite brands on social media and put a no junk mail sign on your letterbox. If you don’t know the sale is on, you won’t feel like you are missing out and are less likely to spend.
10. Don’t go to the Shops Unless you Have to
Instead of making time with friends at the shops go to the park, meet at each other’s homes or plan another activity that doesn’t cost money. Shopping doesn’t need to be the way we spend time with each other.
Create a menu plan so you only need to do grocery shopping once instead of multiple trips to the supermarket. Plan your clothing purchases and choose not to go to the shops unless it is essential.