Chronic overspender? Here’s how to break the habit.

1. Play the waiting game. 

When you start to feel that “I want it now” itch, wait a day or two. Brad Klontz, a financial psychologist, says this time is about reflection and planning. “Can I afford this?”, “Where am I going to put it?”, “How am I going to feel about this purchase tomorrow?” and more are all questions you should be asking yourself. According to Klontz, the pause helps calm the emotional-response the brain so generously gives us when we see something we like, and activate rational-response. 

Wait at least 48 hours and then think again. 

2. Swap cards for cash.

Credit cards can give, and they can take. Depending on how you spend, you could end up in serious debt, so good credit practices are an absolute must — for everyone, but especially for speedy-spenders. Swapping your credit card for cash at times you know you usually spend too much is a good way to avoid this entirely. If you’re heading to a night out, get out the cash you think you’ll need and leave the card at home. You’ll get into excellent habits of controlled, disciplined spending. 

When you do have to rely on a credit card, pay it off at the first opportunity to avoid fees. For big purchases (like flights or furniture), consider a card with a zero percent introductory annual percentage rate. 

3. Use click and collect.

Click and collect is a real wallet-saver. Not only can you see exactly what costs you’ll incur by shopping online (where the total comes up as you shop, not suddenly revealed to you at the checkout), you’re not tempted to buy more when you collect your goods in the parking lot or collection desk. Click and collect grew immensely over the pandemic, and even as restrictions have eased, many people still prefer to shop this way.

4. Give yourself an allowance.

If you don’t already have a budget mapped out, do one. Then, build a splurge allowance into it. This concept has always existed, but really took off in the financial advisory book The Barefoot Investor (worth a read if you like saving money). Whether you do $50 a week or 10% of your paycheck, a clear, outlined splurge allowance is a good way to control impulse spending. If overtime you stray from the budget, it’s a good idea to talk to a professional financial advisor.

5. Have an accountability partner. 

Whether this is a professional accountant or a family member who just loves budgeting, it’s good to have someone hold you accountable. They can help you dissect your reasoning for a purchase because you’re forced to explain why you bought something and unpack your spending habits in detail. Often, just hearing these said aloud are enough for you to highlight bad habits you may not have noticed before. 

Let’s do this 

Need help with budgeting and general accounting? Contact us — as registered accountants, we can provide advice and guidance on everyday spending.