We’re all guilty of unconscious spending. Buying snacks just to ‘keep your mouth busy’, or going window shopping and ending up walking in and out the door.
Many studies have shown that people shop and pay more for an item if they’re sad or happy. Even boredom can be a spending trigger for some.
The first thing you need to do to save your bank balance is to find out your spending triggers. These steps can help you out:
Study your Spending Habits
You need to take a step back and think about the times you’ve splurged without planning. Is there a particular time of day (or the month) that you feel more triggered to indulge in your wants?
For some people, it could be a specific scenario, like after a stressful day at work, that triggers them to spend more.
Pay attention to emotional spending cues
Emotions are behind more financial transactions than you’d think. According to several scientific studies, you’re more likely to spend more and even pay higher prices for stuff when you’re emotional.
It’s possible you spend more when you’re excited, to celebrate the occasion. Or how when you feel sad, you tend to spend on comfort food or go shopping to distract yourself.
Ask Yourself Why
If your answer isn’t obvious from the other two steps, you should have a self-reflective moment and ask yourself WHY?
The basic idea is to understand the feeling you get from spending money because feelings affect our decision making a lot.
See if you can get other activities or hobbies that help you achieve that feeling without hurting your bank account.
Once you’ve gotten to the bottom of your spending triggers, here’s what you can do to deal with them:
Keep Track of Your Money
You have to be really mindful of your finances and setting SMART financial goals is a great way to do this. Create an effective budget and be disciplined enough to stick to it.
Set up goals for your money and stick to them. When you have a clear view of what’s coming in and going out of your bank account, you get to be in better control of your finances.
Reduce your use of electronic payment channels
Just like we shared in our previous article, it’s psychologically harder to give out cash. So try to minimise your use of cashless payment options, especially when shopping, in order to increase your spending awareness.
Delete your card information from shopping sites and minimise the use of payment apps, except for necessities.
While these steps may not be so easy to follow, the results are well worth the effort. Indulging yourself is fun in the moment, but this habit can cost you millions if left unchecked.
When you’re able to save some money, it’s a good idea to channel it into a high-interest savings account or towards other investments. Your future self will thank you!
What are your spending triggers? What steps will you be taking to beat them?
MONEY, LIKE EMOTIONS, IS SOMETHING YOU MUST CONTROL TO KEEP YOUR LIFE ON THE RIGHT TRACK.
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