If you’re anything like me, you’re tempted multiple times throughout the day to spend money on things that you really don’t need.
For me, I find it tends to be that “one more thing” I add to my already-expensive checkout experience. Say I’m at Lowe’s picking up some lumber for a weekend project. I look down at my cart costing $300+, and then I almost instinctively grab a soda for $2. I tell myself, “I’m already spending this much. What’s a little more?”
Amazon is another weakness of mine. It’s all-too-easy to pick up my phone, purchase something for $20, and have it sitting on my front step two days later. It’s so damn convenient!
Whatever it may be, you spend a few dollars here and there, and then you forget about it.
This happens dozens of times. Then, come the end of the month, there’s more month than there is money. You ask yourself, “Where did all our money go?! We make too much money to not be able to save anything.”
The root cause to all of this, embarrassingly, can be summed up in four little words: lack of self control.
Almost on repeat, we make short-term impulse buys without even considering the consequences, or how it affects our long-term goals. Making the long-term choice is almost always the better option, but it’s definitely the more difficult one.
The trick is breaking out of the mindless routine. Our mind and body thrive on the instantaneous dopamine response received from instant gratification and impulse buys.
If you’re reading this article, you know exactly what I’m talking about. You’re realizing that your lack of self control is debilitating. You’re not making any real progress towards any savings goals, and are most-likely drowning in credit card debt. You may have long-term goals, but they’re constantly being undermined by short-term impulse buys.
So what do you do?
Here are a number of things I’ve tried to implement in my own life to save me from myself. They’ve helped me regain self-control, and made me feel that I’m now back in the drivers seat, finally back in control of my financial life.
Quit Making Excuses
Here’s the cold, hard truth: every time you purchase something you don’t need, you’re stealing money from your future self. And not only that, but the money you’re spending today is worth 2-3x more in the future. It may only be $100 today, but you’re essentially stealing $300 from your future self.
When we justify that unnecessary purchase, we’re making excuses for why we either can’t or don’t want to get our financial lives in order. Often times, that item goes wasted, or was purchased for the wrong purpose (i.e. to impress someone else — pro tip: they don’t care).
Ultimately, it circles back around to our first point: we chose short-term pleasure instead of financial stability for our future.
If deep down, we truly want to have a strong financial future, quit living paycheck-to-paycheck, and build generational wealth, we have to stop making excuses. Stop justifying it.
“Do I really need this?”
Before you purchase anything (and yes, I mean anything), ask yourself, “Do I need this to survive?”. If you’re talking about rent, food, or your water bill, the answer will be an absolute “Yes”. However, that new purse, concert tickets, or shiny car is not a necessity.
One of the hardest thing to do in personal finance is take a step back, look at each and every purchase, and analyze whether or not it’s truly a necessity. Whether you’re purchasing with cash vs credit doesn’t matter (sort of — see below). Will it help you survive? Or maybe, is there a less expensive option that will help you survive in a similar manner?
Every time you place something in your cart, ask yourself this question. Every time you pay a bill, ask yourself this question.
If the answer is a very obvious “No”, then buying it does nothing more than set yourself back farther. If the answer is a “Yes”, immediately ask yourself if there is a cheaper option.
Self-control isn’t something that’s achieved overnight. It takes consistent, concerted effort. Self-control is built by repeatedly questioning whether or not something is required, and then weighing the pros and cons.
Ditch the Credit Cards
While this point may seem to contradict the post I wrote about why you should be using a credit card for each and every purchase, I promise it’s not. I still very firmly believe everything I wrote in that article. But if you’re struggling with self-control, it may be wise to hide your credit cards from yourself, at least temporarily.
One of the biggest reasons that credit card companies push credit so hard, is that it’s very easy to distract you from the true amount of money you’re actually spending.
There’s something psychological that happens, which is very different from when you’re paying with cash. Say you go to the store and buy groceries. You hand the cashier a $20 bill. In exchange, the cashier hands you your groceries, as well as $1.32 back. Ouch. You used to have $20. Now you’re left with less than two dollars. There’s an emotional response triggered during this exchange that actually hurts. You see yourself with less money than you walked into the store with.
The opposite is not true when using a credit card. In this same situation, you walk out with both your same credit card that you handed the cashier and your groceries. There’s no pain involved. You get what you want, and it feels like it didn’t cost you a thing.
The solution is simple: only spend using cold, hard cash. Completely stop using credit cards for a while. Doing this will re-program your brain, and cause the emotional trigger to be rebuilt which, until now, has been long gone. If you don’t have enough cash to cover the purchase, you simply cannot buy it. If you find that you’re running out of cash to pay for the things you need, this will cause you to re-evaluate your budget, and to cut out some of the unnecessary spending so that you can actually purchase the things you need.
Financial self-control is like riding a bike. You need training wheels temporarily, but once you gain your balance, you can begin using credit cards once again. And when you do, you should definitely check out our article on how to travel for free using credit cards.
Visit tempting locations without money
My wife LOVES new clothes, and she LOVES the Buckle. Whether we’ve specifically planned to go there, or we’re walking past in the mall, we stop regardless.
Now, I don’t mean to place my wife in poor lighting, because she’s absolutely more frugal than I am. But chances are, more often than not, that we’ll come out of the store with something that we hadn’t planned on purchasing.
We all have our Achilles heel when it comes to spending. Mine is eating out. We all have certain places where we’re more likely to make poor decisions and spend money on short-term desires without thinking of the consequences. This could be Starbucks, Best Buy, or the Buckle, for instance. Which locations are your weaknesses?
You might think that it would simply be enough to avoid these locations altogether. But that’s not enough. You don’t teach yourself self-control, you’re simply teaching yourself avoidance. A better approach is to visit these tempting places, but place a hard dollar cap on what you’re able to spend. Or, don’t take any money with you at all. Leave your purse or wallet in the car, go browse, and then tell yourselves you’re now allowed to purchase anything.
Again, this is only temporary. Until you get your spending in check, there needs to be some growing pains. Not forever, of course.
Once you’ve regained your self-control, tell yourself that you’ll be going to “X” store for “X” item, and take only enough money for that specific purchase, and nothing else.
Focus on the experience, not the items
So often, a “night on the town” ends up involving a nice meal out on the patio, accompanied by plenty of drinks. These locations strongly emphasize spending money. Before you know it, your evening has stolen $150 from your wallet.
Be very careful with social engagements. You don’t have to spend hundreds of dollars to spend time with your friends. Try to find other forms of socializing, either at someone’s home or at a place where spending isn’t necessarily part of the experience. Go with a friend to walk your dogs together. Not only is it free, but healthy too! Go to a park and play a game, or cook a gourmet meal at home. Have friends over for a BBQ in the backyard.
It’s common for friends to tease when they hear exactly what you’re doing. Feel free to join them at these restaurants, but set a specific limit on what you’re going to spend. Rather than getting the T-Bone Steak, stick to the Salad Bar. Rather than getting 5-6 drinks, have water.
It may not be the most popular option, but you’ll be leaps and bounds ahead of your friends financially at the end of the month.
Don’t give up when you fail
You’re going to fail. At least a few times. You’re going to either unintentionally (or intentionally) purchase something you really don’t need.
Get back up, and start again.
I really don’t understand this notion in society, and that we tell ourselves, “Whoops. I messed up. I guess I’m done now.” One mistake does not instantly mean you’re done. So many of the world’s most successful entrepreneurs have experienced hundreds, if not thousands, of failures. But all-too-often, we look at them because of their successes. Most don’t realize how frequently they’ve failed to get where they’re at currently.
Financial progress, similar to any other type of progress in this life, is very much like taking two steps forward, and one step back. The important thing is that you’re continually and consistently striving to be better, and move forward.
The ultimately goal is to do better today than you did yesterday. If you fall, don’t beat yourself up over it. Instead, realize why you made the mistake, adapt, and do better tomorrow. Retrace your steps, and figure out what lead you to where you made the mistake, and set safeguards in place to ensure you don’t commit financial suicide again.
It’s so important to never give up. Financial independence and stability aren’t built overnight.
When you take a step back, and look at your financial life as a complete picture, it can absolutely feel exhausting or daunting to begin. More often than not, people are drowning in debt, and have zero sense of direction or idea where their money is leaking from.
The goal of all these steps is to be an active participant and consciously think about your spending, and how to regain that self-control. It’s about getting back in touch with yourself, and back to the basics. It comes down to separating your needs from your wants, and figuring out where your money is best spent to propel you forward, rather than staying at a standstill where you are currently.
Find support through your friends and family. In no time, you’ll be surprised at how quickly you’re starting to fall down the path to a debt-free life, and spending self-control.