For most people in this down-at-heels economy, living it up simply isn’t possible anymore. Gone are the days of careless spending, impulse buying and unplanned shopping sprees. The 2008 Wall Street crash has taught everyone that money is a precious, finite commodity that must be consumed wisely. And if you still hadn’t learned that lesson, you’re up for a major disappointment somewhere down the line.
Consumer demand for every little thing sold on the market skyrocketed with the introduction of TV shopping and online stores. It’s now possible to be sitting on your favorite couch at home and taking care of your grocery shopping for the week or booking a flight to holiday destination halfway around the world. Just like that, you have a new couch or electronic reader or car, but your bank account simultaneously takes a significant hit.
The thing with money is that it’s so hard to come by but incredibly easy to spend. Certainly there are emotional mechanisms tied up with the way we spend our limited financial resources, that’s why it becomes important to actually look into what makes us open our purses and start taking out our hard-earned cash.
Watch your buck
Look closely at your monthly living expenses. What is the single biggest expenditure you have? Do you think you can sustain this kind of lifestyle in the long run? Are you putting away enough money for a nest egg so that you have an emergency fund for big unexpected expenses in the future?
These are the questions that a wise and well-rounded shopper asks himself every single time he goes out on a buying expedition. Some people think that when you’re out shopping, you should just focus on the thing that you’re going to buy and ask yourself if you really want/need it. If the answer is yes, then you go through with your purchase and go home with that gaily-wrapped package.
But spending money is more than just looking at your present capacity to buy that item. You have to check your future spending patterns as well. There may be certain things that you will have to shell out money for in just a few months, ultimately dwarfing the necessity of buying the item in front of you now. Being a smart shopper means taking absolute control of your assets and liabilities and reining in your emotions or appetites for shiny new stuff.
The basics of emotion-free shopping
While there is real satisfaction in acquiring new things, you have to learn how to curb your shopping appetite and buy only what is necessary and useful. Emotional spending is when you buy something that you don’t need or even want just because you feel happy, miserable, tired, bummed out, angry or a combination of all these. Certainly there’s nothing wrong with buying little trinkets to relieve the stress or the buzz bubbling up inside of you, but you have to learn to say no to emotional spending to save yourself from financial trouble.
Take a look at these examples of how you should and shouldn’t spend your money. Pay particular attention to how emotions can overrule our rational minds and push us to purchase things we have no need or use for:
- Take only enough cash in your wallet for reasonable everyday expenses. Leave your credit card once in a while so you don’t have an excuse to buy something.
- Find other, less money-intensive ways to take care of your emotions. Try meditation, yoga, dance or Pilates to help you relax instead.
- Make a budget plan for your weekly expenses and stick to it.
- Put your savings in a separate bank account to minimize the temptation of using it to finance your shopping sprees.
- When shopping, make a list of the things you’re going to buy and avoid the other stores as muc as possible.
- Don’t go shopping when you are feeling particularly high or low. You are more prone to impulse buying when you’re riding great emotional waves.
- Don’ allow yourself to become over-exposed to sales talk and advertisements for new products and services. This way you can avoid craving for that new gadget or book.
- Be your own accountant. Take responsibility for your shopping binges and resolve to be a better, smarter shopper next time.
- Collect all the receipts of the items and services you pay for so you know how much you spend during a particular period. Go through your bills and receipts monthly and ask what expenditures you can live without.
- Give your money away. You will definitely feel happier by helping someone instead of blowing your cash on something that you don’t even want.
When not out building relationships with other bloggers, Krisca Te can be found reading blogs that feature topics on personal development. She is also an avid fan of personal finance and is currently working with Australian Credit Cards, a personal finance blog that wrote about How To Resist Irresistible Offers. You can follow ACC on Twitter if you like to stay updated on their latest contents.