Being mindful of our spending habits is crucial for achieving financial stability and reaching our financial goals. But it can be challenging to break away from the cycle of chronic spending.
According to Redditors, these tips will help you gain control over your spending and make more conscious choices with your money. From tracking your expenses to set spending limits, these strategies will help you take control of your finances and achieve your financial goals.
1. Do Research Before, Buying the Item
Someone suggested that one way to trick oneself out of frivolous spending is to convince yourself that you need to find the ‘best version’ of an item through intense research and reading many reviews.
They would see something they wanted, look for alternatives, and bury themselves in research for a couple of days. Eventually, the impulse to purchase would wear off, and they would realize they didn’t need the item. Another suggested approach was going to garage sales, as you’ll see oceans of bad impulse purchase decisions.
Related: 8 Things Keeping You From Fixing Your Finances
2. Save and Invest First
Many people in the thread agreed that you pay yourself first. Set aside a certain amount automatically each paycheck to be invested or go into savings. Then, have a separate checking account for the remainder of your spending cash. You can spend this carefree because you are already saving and investing the other money.
3. Use Amex Prepared Gift Card
One stated that using an American Express prepaid card is a way to control spending. By putting a budgeted amount of money onto the card and using it for daily expenditures, it prevented going over budget. The strategy was effective for individuals with spending problems and helped them stay within their means.
4. Increase Your Retirement Contribution
One user noted that they increase their retirement contribution when they receive a raise. They don’t have a hard and fast rule for how much they do it, but they always increase it by at least 1%.
Recently, they received a 7% market adjustment and bumped it up by 2%, allowing them to save more while still feeling like they received the raise. To avoid lifestyle creep, they suggest adding the whole raise amount directly to retirement since many 401ks are based on percentage contributions.
5. Create a Budget
Several insisted creating a budget can help with chronic spending. One way to do this is to use the budgeting software “You Need A Budget” (YNAB) which allows you to budget for specific wants and needs, such as dining out or vacation.
The key is to set financial goals and allocate money towards them, which can help to prevent impulse purchases. Additionally, they said it is important to remember that budgets should reflect your lifestyle and interests and acknowledge trade-offs in spending.
6. Plan for Activities
Someone recommended that for things like Starbucks and eating out, one should preplan by bringing a Thermos of coffee and a bag lunch and keeping a list of cheap or free activities. They also recommend creating a visible, visual chart of savings to track progress and stay motivated.
7. Keep Track of Your Spending
Another shared a method they use with their spouse to keep track of their spending. They created a shared note on Apple Notes where they document all expenses, and at the end of the month, the two categorize them and see where they stand. They suggest it takes a few months to establish a solid monthly average.
8. Control Amazon Spending
Several advised controlling Amazon spending by maintaining an Amazon wish list labeled “Birthday Wishlist.” They add items they don’t need immediately, and if there is an event, they pick something from the list. The list is also public so that friends can buy those items from it, and they can also remove things they don’t want anymore.
9. Have a Savings Account
Another person recommended a strategy they use to manage their finances with their husband. First, they created separate personal accounts and joint accounts. So all bills and shared expenses are paid from the joint account, and they save the rest for an emergency.
Then, they divide the remaining amount and deposit it in their personal accounts, judgment-free accounts, so they can spend or save as they want.
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10. Think About the Time It Costs You for Each Item
Finally, someone explained what worked for them: to think about the time it costs for each item. Don’t look at an item as fifty dollars. Instead, translate the cost into the number of hours you worked to purchase that item.
It is something many agree will fundamentally change how you look at spending. Others noted it helps quickly stop frivolous spending like Door Dash and Uber Eats.
We hope you enjoyed this Reddit tips list for being mindful of habitual spending. This article is inspired by the internet and does not necessarily reflect the views or opinions of Savoteur.
