Developing Effective Spending Habits 101

Healthy Spending Habits Improve Long Term Financial Futures

Below is a list of five different spending behaviors prevalent in stores and malls across our land. Some of us may exhibit one particular behavior, but the majority of us will likely identify with two or more of them.

Behavior: Convenience Shopping

Description: You say things like, “It’s on my way,” or, “I don’t have time to look around!”

Behavior: Entitlement Shopping

Description: You say things like, “I’ve had a hard day, and I deserve this!”

Behavior: Hobby Shopping

Description: “What else am I going to do with my best friend?”

Behavior: Impulse or Sale Shopping

Description: You may say things like, “If I wait, it just may not be on sale,” or “I just have to have it now!”

If you identify with one or more of the above behaviors, then make a personal decision to become a disciplined shopper:

A disciplined shopper plans and spends within an established and realistic budget.

Sales come and sales go, but your money only goes once! Avoid impulse shopping!

Much like body-building, developing effective spending habits takes effort, repetition and time. Below you’ll find a list of exercises that will help:

1: Budget. Without a realistic and effective monthly budget that you can consult regularly, spending habits can become irrelevant.

2: Develop shopping lists and don’t go into a store without one. Keep them somewhere easily accessible so you can add or remove items when they come to mind.

3. Prioritize your spending. Place housing, groceries, childcare, taxes, transportation, and insurance at the top. Debt payments and other bills come next, followed by entertainment, personal care, and services (“discretionary” spending).

4. Comparison shop for price and quality.

5. Sleep on it…before purchasing any non-essential item of $50 or more. In fact, you may want to sleep on it for a couple of nights just to be sure.

6. Shop with a “buddy” who will provide you with strength and restraint.

7. Use cash only and stick to your budget. That way you aren’t tempted to spend extra on a credit or debit card.

8. Budget a little “me money” so that you don’t feel overly restrictive.

9. Cut back on gifts you can’t afford to buy. Consider making them instead.

10. Do I really need this? Make sure to ask this question to yourself, even a few times in order to help prevent unnecessary spending.

If you have any questions, would like to discuss your financial challenges, or are just looking for advice, please contact us at your convenience. As always, we are here to help you and look forward to hearing from you.

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