How to curb impulse buying

I strongly believe that our spending falls into two major categories, functional and emotional. The functional type of spending occurs when we pay for our normal, basic necessities. When we first put our budget on paper, everything looks pretty good. The household expenses are accounted for, money is set aside for gas and groceries, and there may even be a bit left over to save. Then the end of the month comes and you realize that you, once again, spent more than budgeted. You promise to do better next time. Here are some steps you can take to avoid emotional impulse buying in the future.

Hide the money
Once upon a time I would allow the money left over after my bills were paid to linger in my checking account. That was a disaster waiting to happen. I realized that if the money sat in my account, it was basically left over money that should be spent on frivolous purchases. Instead of continuing to leave money in my checking account, I implemented a strategy of transferring the bulk of my discretionary income into my online bank account. Because this online bank does not offer check cards, I had no easy access to my money. Any transfers to my local bank took 2-4 business days. The money was there if I really needed it in emergency situations, but I did not have the luxury of simply swiping away my money because I saw something I instantly wanted in the store. This technique does require that you adequately plan for all of your expected spending so you do not find yourself with a bill due and your money "hidden" in another account for 3 more days. By implementing this technique, I was able to decrease to decrease my urge to spend the money in my checking account without much effort.

Give every dollar a name
Budgeting is crucial when managing your finances. Not only is it important to budget your basic expenses, you must continue to allocate your money into categories until you have nothing left. If you have a hard time finding additional categories, start to think about goals you want to accomplish and how that money could help you. This way you will have to forgo something in order to purchase your whimsical item. If you decide to go ahead and buy your must have item, you are giving up the possibility of saving up for a down payment on a new home or becoming debt free.

Just say no
Too often we find ourselves in a position of spending too much money because we simply did not tell ourselves, or others, no. We said yes to meeting a friend for lunch even though it was not part of the budget. We said yes to buying those fancy shoes, even though we knew we would have to pay for them on credit. I know that coming out and saying no can be a difficult thing to do. So think of alternatives instead. Tell you friend that you have exceeded your eating out budget and invite him/her to walk in the park or watch a movie at your place instead. Another alternative to buying an item on impulse, is to tell yourself that you will see if you can incorporate the item in your next budget. Chances are, you may not even still want the shoes by then. The more you are able to think of alternative options to simply spending more money than you have, the more you will develop the habit of sticking to your budget.

If you implement all three steps into your budgeting and spending routines, your emotionally charged spending habits will be one less thing financially,that you have to worry about.