Quote of the Week:"That man is richest whose pleasures are cheapest."~Henry David Thoreau
The festivities are upon us already. How time flies and the financial frenzies be it the tradition start fork out money from the 12th of December right up till New Year and arrive in January with a hangover bank account. Perhaps, though, this should be the year that we all start a brand new tradition of financial discipline for the festive season. The words 'discipline' and 'December' do not really seem like typical partners but the truth is, they should be, if we are to stay on track with our financial goals. It is a process of maintaining balance of how we spend and how much we have and avoiding impulse expenditures. Have you ever made a purchase and later regretted spending so much on the item or wondered why you even bought the item? Does this happen to you often? Unplanned spending to purchase things that you may or may not need is often referred to as "impulse spending."
Identify Ways that make you spend impulsively:
Spending when you are in a good mood is easy. At the clothing store, everything you try on looks great, they have got your size and since the red one suits you so well, you may as well grab a blue and black one at the same time. We often make good mood purchases in a subconscious effort to make your good mood last longer, a mood which fades quickly when you realize you have just spent the grocery money. When you have had a rough day and are feeling down, you will try almost anything to improve your mood and make yourself feel better. While your mood may improve temporarily, but eventually when you are short for the rent, the good mood that you tried so much to achieve will feel like a distant memory. When you try to justify an impulse purchase, money is always harder to earn than it is to spend. Plan for purchases within your budget before you indulge so that you have the funds in your account. This will allow you to maintain greater control over your money and not the other way around.
Impulse spending can cause debt; in some cases, a significant and unmanageable amount of debt. It's easy to let balances accumulate with the intention of paying them off in a few months. Accumulating debt will lead to your future income being spent before it reaches your account. When your debts start to get out of hand, so does your sense of control over your money. The feeling of losing control over your money is frustrating, discouraging and extremely stressful.
How to Minimize Impulse spending:
You may struggle with this question all the time or periodically throughout your life. Recognize that impulse spending is as much psychological as it is physical. The physical conditions that precede spending money are often easier to identify like receiving a birthday invitation from an old friend and need to buy a gift. However, there are thought processes that occur, often subconsciously, that contribute to your spending. These are the same thought processes that influence your judgment over needs versus wants when you build a budget. A coat of paint may be all you need for your apartment but you add new rugs, and a new table. Recognizing the underlying strength of these contributing psychological circumstances will help you in your efforts to control your impulse spending.
We only have so much energy and personal resources to draw upon to maximize our ability to resist impulse purchasing. Our personal battery, our energy reserve, wears out as we go through each day and week. To avoid impulse spending, learn how to charge your batteries, as well as re-charge them on short notice when necessary, so that you have the energy to make wise choices more often than not. Keep in mind that setting boundaries for yourself is a personal choice, not a punishment. Deciding on a spending plan and setting a budget that allows you to meet all of your monthly and seasonal expenses without incurring further debt, gives you personal freedom to make choices rather than set limitations which you may resent.
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