Episode #19: How To Control Emotional Spending (and START saving for your bigger goals!)
Do you find yourself spending money and you just can’t stop? When you look around, are you surrounded by things? Is your closet overflowing into your room, but you still feel like you’re struggling to meet some of your life costs? Do you have a hard time sticking to traditional ‘budgets’, and always fall off because they feel too difficult or strict? Today we’re going to walk through 5 tips to learn to control your emotional spending, and stop buying things you don’t need. Now don’t worry, I’m not about to start telling you to never spend money with your friends, or never buy anything new, or the classic advice given to millennials (myself included) to ‘stop buying avocado toast’. Instead we’re going to walk through these 5 money saving tips together so you can stop spending more than you make, but still enjoy your money and your life.
These 5 easy tips will help you start saving money by making tiny and easy to implement changes to your money spending behavior. I’m not going to go all Scrooge McDuck on you and start telling you to never spend money, that’s not what we’re about here at the How To Adult School instead I want to guide you through ways to curb your over spending behaviors, not end up surrounded by junk, and start saving money for bigger and better things in life that will make you happy. Cool?Cool.
1. Ask yourself, is this an emotional purchase?
Before you buy something, ask yourself, is this an emotional purchase? If you’re anything like most of us, buying something gives you a rush of happiness. If you’ve ever joked about indulging in ‘retail therapy’ you know what I’m talking about. Personally, I’m filming this during lock down right now, and the draw of online shopping at the moment is SO strong, because it gives us a little bit of excitement during the groundhog day slog of lock down. Waiting for a package is something to look forward to. Buying something nice and new for your house feels like it might just maybe make you happier to be spending all day every day in your space. These would be emotional purchases, and you want to avoid making them as much as possible.
So, before you buy anything, ask yourself, is this an emotional purchase? Just purely recognize it. If you don’t remember to ask yourself that, maybe put a little sticky note on your credit card, or computer. These days online purchases are way too easy to make, so if there’s anywhere that has your credit card saved so you don’t even have to type it in, you need to go and delete that saved data. Next, I want you to take a few minutes to make a quick list of other things that make you happy. Whether that’s going for a walk, snuggling your dog, chatting with a friend, making cookies, doing jumping jacks. It doesn’t matter what’s on there, just make the list, even on your phone, and keep it handy somewhere. So now, next time you’re about to hit ‘BUY’, ask yourself ‘is this an emotional purchase? If the answer is no and you really need more toilet paper then of course hit the buy button, but if the answer is yes, then whip out your list and try taking a few minutes to do one of the other things that makes you happy instead.
This has really helped me over time. Especially these days, working from home alone all day, it’s not uncommon that I find myself scrolling pinterest when I need a ‘break’, and all of a sudden find myself thinking ‘oh my god I need an oversized cream turtleneck to complete my look, how have I ever made a decent outfit WITHOUT an oversized cream turtleneck’. Then, I stand up, make myself an espresso, throw the ball for my dog, go out into the actual daylight for a quick walk, and all of a sudden I’ve saved myself like $120.00, AND I already have a regular sized cream coloured turtleneck in my closet that I love.
So, ask yourself, IS.this.an.emotional.purchase. And if so, do something else to get yourself out of your funk! Go make yourself happy.
2. Start a ‘to buy’ list on your phone
Just like a to do list, your to buy list is an ongoing list of things you might like to buy in the future. Next time you want to buy something, open up your list, and write down the item. Tell yourself you are NOT allowed to buy this item until two weeks have gone by. If you still feel like you NEED that item in two weeks, you can buy it, if not you can either delete it from the list, or leave it there for later if you want.
Giving yourself time to think about a purchase is a great way to stop wasting your money, because chances are your ‘need’ for that product will have gone drastically down over that two week period. You’ll save yourself SO many purchases that fall into the *love it, couldn’t wear it* category, not because of lockdown, but because you actually don’t wear or use those things. I kid you not, the other day I deleted ‘leatherman knife’ from my to buy list………like, what?
So, open up notes on your phone, start a list titled ‘to buy’ and start jotting down all the things you want to buy as they pop up. When you look at the list again, if an item honestly still excites you, then consider buying it. If you’re no longer stoked on it, or you’ve realized you have something really similar that you’ve started using these past two weeks instead, then it probably doesn’t need to be on your list, and that money probably belongs in your bank account instead.
3. Remove subscriptions from your credit card.
I’m sure you’ve heard this all the time, but have you actually done it? Can you tell me exactly what subscriptions will appear on your card this month, and how much they cost? If not, I want you to download your full statement for the past month, circle all your subscriptions, and figure out which ones you need and which ones you still have on there just because.
The first step is just to remove the subscriptions that you haven’t bothered to get rid of, or that you honestly don’t use anymore. How many of you have subscriptions to fitness apps that you never use? Don’t get all existential on yourself about your fitness level and why you want to keep the app because you want to start working out more. If you’re not using it, get rid of it now. They’re subscriptions, and they’ll be more than happy to sign you up again later if you want.
Next, and this is only if you’re really needing to cut back on your spending, look through for subscriptions that you enjoy but don’t really need. No matter how hard you try, most subscriptions don’t fall under your budget category of ‘utilities’. Stop fibbing to yourself. You don’t need three different streaming subscription services. If you’re having a hard time getting rid of some, take the monthly cost, multiply it by 12, and see how much you’re spending every year on it. When you realize that a basic Netflix subscription costs you almost $160.00 a year, and then you realize that you can basically get a budget flight to New York for that, it might be easier to just enjoy prime for a while. And remember, you can always resubscribe if you really miss it.
So remember, the main goal here is just to get rid of useless subscriptions that are wasting your money, but it’s also a spot to really tighten up your spending if you’re having a problem with going over budget. If you’re not, then just get rid of the outright money wasters and you’ll automatically find yourself with hundreds of dollars more in the bank.
4. Start a big savings goal.
It’ll be so much easier to stop spending money on silly little purchases when you can compare them to the value you place in a BIG savings goal. Whether that’s saving money to buy a car, put a down payment on a house, or take that Antarctic trip of your dreams to kayak with penguins, set a large savings goal and start to work towards it.
I recommend opening an account and naming it with your savings goal. That way every time you open your online banking you’ll be reminded of what you’re working towards. I had an account titled ‘down payment’ for two years, and every month when I did my finances I got to check in on that account, and see how much closer I’d come to my goal.
When you have something big and meaningful you’re working towards, it will shift your thinking, and make it so much easier to not feel like you’re missing out on indulging in your daily latte, or buying that fast fashion piece you’re honestly not ever sure you can pull off.
You’ll start to feel less like you’re keeping up with the Joneses with the fancy stuff, and meals out, and more like you’re getting ahead of the Joneses by increasing your net worth, and investing in something that’s really meaningful to you.
5. Don’t cut yourself off cold turkey.
Most people think of budgets like they think of diets, boring, restrictive, and lackluster. This makes them almost impossible to maintain. This entire exercise is about making a lifestyle shift in your spending habits with tiny and manageable behavioral changes, so don’t set out to do something you can’t maintain! Once you’ve reduced your money spending habits, you’ll likely be left with a handful of things you still really want to spend money on, and that’s okay. Unless you’re struggling with consumer debt, I don’t advocate for purging all spending joy from your life.
Instead, I recommend coming up with three categories that you will allow yourself to spend your money on guilt free. These are three things that truly make your day brighter and happier, and they’re totally up to you. I call them the guilt free three. For example, if your morning latte from the expensive local coffee shop is all that makes the work day bearable for you, then make that one of your categories. If being well dressed is really important to you, then save your money so you’re allowed to buy a beautiful long term piece for yourself each season. You get to choose, and you get to choose three things that YOU enjoy.
This is a great way to start sticking to a ‘budget’ without closing yourself off from all the things that make you happy that do cost money, because that’s the world we live in, and unless you have a spending problem you need to fix, you don’t need to miser yourself to a bare bones money diet.
So, to recap everything we just covered. There are 5 small behavioral changes you can make to stop wasting your money on things you don’t need.
Ask yourself is this an emotional purchase? If so, try doing something else first to improve how you’re feeling.
Start a ‘to buy’ list on your phone. This list will help you pare down to what items are really something you want, vs what items might be impulse purchases.
Get rid of subscriptions you aren’t using! These will suck up hundreds of dollars a year, and you’re likely in the danger zone here if you’re ‘afraid’ to look at your credit cards. Just do it, remove those subscriptions, and instantly stop pouring your money down the drain.
Start a big savings goal. Every time you go to spend money, compare it to the larger goal you’ve set yourself. You’ll be amazed by how many purchases pale in comparison to something big and real that you’re working towards.
Don’t cut yourself off cold turkey. You don’t have to miser yourself to sitting in a joyless dark apartment filled with milk crates wearing second hand running shoes (eeew). That’s not what budgeting is. To make it easier to ‘budget’ set yourself three guilt free categories that you feel okay spending your money on and that truly make you happy. It’s okay to spend your money, but it’s SO important to spend it thoughtfully and intentionally.
If you want to learn more about managing your personal finances properly, and start feeling in control of your bank accounts, I recommend signing up for the free 7 day personal finance mini course that’s currently being offered by the How To Adult School. It’s called the 7 day make friends with your icebreaker challenge, and in one week it will bring you from being afraid to look at your bank account and credit cards, to actually feeling like you’re ready to start working towards some big financial goals. Thanks so much for tuning in to the How To Adult Show!
Linked Resources
Want to learn more about managing your finances like an adult? Sign up for the free back to basics beginner finance course.
Find the High Interest Savings Account I recommend for your F*** you fund.
Join The How To Adult School on Instagram
Follow The How To Adult School on Tiktok
NOTE: This page contains affiliate links that allow you to find the items mentioned in this episode and support the show at no cost to you. While this show may earn minimal sums when the viewer uses the links, the viewer is in NO WAY obligated to use these links. Thank you for your support!