If you’re one of the many Americans who vowed to change their financial habits this year then you probably need to change your spending habits. When people make money resolutions they may want to start saving more or pay off their debt. However neither one of these goals can be achieved if you don’t stop spending.
Money doesn’t fall out of the sky or grow on trees and therefore in order to allocate more money towards one thing you need to cut spending somewhere else. Or you can make more money, but that’s a whole other topic.
I’ve come to learn that the act of spending is so much more a mental obstacle than it is a physical one. Think about the last time you had the urge to spend and now ask yourself why did you do it?
Here are five ways to help control your spending urges:
Stop thinking spending makes you happy
The mindset of thinking that spending money on material things will make you happy just leaves you with lots of debt and no savings. Of course it’s nice to have new clothes all the time, but do you need them? Probably not. It’s nice to have expensive candles in your apartment, but do they smell any better than the cheaper brand? Probably not. Stop spending money on things you think will make you happy because they won’t be around forever, but your debt might.
Leave the credit card at home
If you have limited income your spending urges may result in credit card debt – that’s a double whammy. Not only are you spending money that could otherwise be saved, but you are also accumulating debt at the same time. To say this is a bad financial habit that won’t help you save is an understatement.
Try and cut out your spending gradually. Start by leaving the credit cards at home, then declare one day a week as a no spend day, then bump it up to two and before you know it you won’t be spending any extra money unnecessarily.
Give yourself consequences for spending
This is the financial equivalent of a swear jar. If you spend money you should add a fiscal penalty into a savings jar. When you quickly see your fun money being thrown into a punishment jar you’ll stop spending carelessly and start saving more. It may sound childish, but trust me it works. It’s like paying a fee to take money out of another bank’s ATM and I’m sure you don’t like to do that. It’s a waste of money and so is spending carelessly.
Think about what you’re giving up when you spend
When you spend money that you shouldn’t you are taking money away from your goals. Maybe you want to save for the down payment on a new home or maybe you want to save for a great vacation. You might even want to invest with a reliable broker, to see some of the things a broker can invest/trade in see this. Whatever your savings goal is, think about it when you want to spend money. I bet you’ll definitely put your wallet back in your pocket.
That’s the great thing about saving money, once you start seeing the balance add up you’ll become so addicted that you won’t want to spend money anymore and when you have to you’ll second guess yourself every time. That’s when you know you’re spending habits have officially changed.