Unnecessary and Impulsive Spending

(4 of 6)

Unnecessary and Impulsive Spending

With so many ways to shop, it is very easy to indulge in unnecessary and impulsive spending. Stores and malls are all around and most stores are online, so you can shop from home.

Unnecessary spending can happen for a lot of reasons. With so much conspicuous consumption in the media, on television and the Internet, there are always new clothes, accessories, technology, furniture and experiences out there.

Credit and debit cards make it all too easy to buy anything you want and deal with the consequences and bills later. Many stores offer discounts when you shop and sign up for their credit cards, so that makes it especially tempting to buy things at new stores.

Ways to Transform Unnecessary Spending

In many cases, unnecessary and impulsive spending needs to be addressed from two different angles. The first is dealing with the issue that prompts the spending and the second is dealing with the source of funds for the unnecessary spending.

The desire to buy new things can spring from many sources. Sometimes it’s emotional—if you’re feeling bad about something, going out and splurging on something new can make you feel better. Other times those feelings come from seeing what other people have and wanting those things for yourself.

In other cases, a catalog or coupon can make you feel like you can save money by buying something on sale and get a deal. If you can identify what you are feeling when you are thinking about buying something new, you have a better chance of controlling the impulse to spend and avoiding spending money on something you can’t afford.

In addition, if the source of funds for spending isn’t available, then you’ll have a better chance of staying away from temptation and spending. That might mean cutting up a credit card or keeping it in a drawer at home instead of carrying it in your wallet. Or it could mean setting aside a small amount of money in your budget for these types of purchases and sticking with that limit.

See the Impact of Wasteful Spending

One of the best ways to curtail wasteful spending and stop impulse purchases is to go through your checkbook and bank statement and track your spending on a daily basis. Often, you don’t realize where your money is going until you track it. Once you do that, a budget calculator can help you see where the money is going and what expenses you can cut out.

If you tend to spend money on alcohol, either when you are out in a bar with friends or at home, the calculator at Rethinking Drinking will show you how expensive drinking can be: http://rethinkingdrinking.niaaa.nih.gov/toolsresources/AlcoholSpendingCalculator.asp. This calculator from the American Heart Association provides information on the costs of smoking: http://www.heart.org/HEARTORG/GettingHealthy/QuitSmoking/QuittingResources/Financial-Cost-of-Smoking-Calculator_UCM_304171_Article.jsp .

Once you’ve figured out how much money you are wasting by spending money on fast food or clothes or technology or whatnot, this spending calculator at Bankrate.com can help you determine how much you can save when you put that money to better use: http://www.bankrate.com/calculators/savings/spending-investment-calculator.aspx.