Home & Family Finance Resource Center
Wednesday, February 10, 2016
April Financial Fitness Challenge—Gotta Have It? Check Impulse SpendingSusan Tiffany, CCUFC
American consumer culture is overloaded with variety and with vendors competing for our attention and our money. Faced with this abundance, it's a bit surprising we can make even the simplest buying decisions, much less the wisest.
The list of things we need is short—food, shelter, water, clothing are at the top. The list of things we might want is similar, but inflated by modifiers: Extravagant food, opulent housing, designer water, upscale clothing. Advertisers, peers, and personal taste all entice us to upgrade needs to wants, driving up our expectations and our debt loads at the same time.
Outsmart the "wants"
If you examine your options honestly, you usually won't have much trouble separating needs from wants. But simply knowing the difference isn't always enough to protect you from unwise spending.
There are so many ways to indulge a spending habit: You can shop in a store, via TV shopping channels, with catalogs and a telephone, or online virtually around the world. It's so easy to scratch that shopping itch. And each time you do, you reinforce the habit.
Boost your impulse control with these strategies to get you past those "gotta have it" moments:
- Distract yourself—Call a friend, read your email, or watch that recorded episode of your favorite TV drama instead of watching the shopping channel, for example.
- Turn off the sales hype in your head—Breathe deeply and slowly to a count of 10.
Exercising impulse control helps you achieve your financial goals.
- Plan for spending situations—If friends invite you to join a shopping spree, be prepared with an alternate suggestion or else decline gracefully. Or go along but leave your credit and debit cards behind; take just enough cash to pay for your lunch. If your route home from work takes you past the mall, find a new way home.
- Think about the consequences, and the alternatives—Money you squander won't make its way into your down payment for a new house or into your retirement fund. Deferred gratification might be less exhilarating than instant gratification, but you can find satisfaction in providing for yourself and banishing anxiety about your future.
- Practice a reminder phrase—That could be something like, "The more you have, the more you want." Perhaps, thinking about the last thing you had to have, ask yourself, "Did that make me happy?" Face it, if it's still in your closet, wearing its store tags, it did not.
- Spend deliberately—Be careful about getting carried away when you do need something. For example, buy the car that suits your needs and resist the urge to buy something bigger or pricier. Understand the concept of decision fatigue to help you be smart about making big purchases.
- Set an example—If you have kids, remember that you're modeling behaviors for them whether you're aware of it or not. It's easier, and more effective, to model smart money management now than to reprimand for bad habits once your children are spending, and misspending, their own money.
Examine your options honestly and you won't have trouble separating needs from wants.
Learn to block the "gotta have it" triggers and you can live within your means and enjoy your money. What you're doing, over time, is replacing risky habits with productive habits. Exercising impulse control helps you achieve your financial goals.
Financial Fitness Challenge
Your credit union personal finance professionals bring you this website and other tools to help you make the most of your money. The Financial Fitness Challenge continues to look at ways you can make better financial habits no matter what condition the economy is in.
Susan Tiffany, CCUFC