As you go through the results of your search in Amazon, intending to buy that one dress you need for next week’s event, you end up filling your shopping cart with stickers, books, and a week’s worth of office and casual clothes.
Walking around that mall that just opened to check out which shops are there and to window shop, not intending to purchase anything, you end the day with your two hands clutching three or more shopping bags from different shops. Sound familiar? You’re not alone!
With the rise of credit cards, massive shopping malls, multitudinous selections, and countless online shopping websites and apps, it is even made more difficult to refrain oneself from adding a few more items to your cart than you originally planned.
This is why we have to put more conscious effort into trying to beat the temptations and our tendencies to swipe our credit cards more often than we planned on doing. Start with some of these ways to avoid overspending.
- Do your budgeting.
Financial advisors might make out finances quite easy for us, but there are still advantages when you regularly plan your budget on your own. But if you are one of those whose part of problems is giving in to the temptation of shopping and spending, we strongly recommend that you do this.
Why – you may ask? Because there are benefits to managing your budget on your own. For one, it helps you prepare for unforeseen expenses and other emergencies. More than that, when you budget your money, you can keep track of your savings and spending; you are made aware of how much you spend and how much you still have.
When you are running low on your bank, it is much better to be aware of it than to live in ignorance and continue spending like you have unlimited resources.
- Determine the stressor that causes you to binge-shop.
When people go shopping more often than they need, it is usually to cope with an extreme feeling or stress. And how do you get over such short-term solution (that would also result in more stress and problems in the future)? Identify the problem!
Once you know what pushes you to spend your cash and use your credit card to make yourself feel better, then you find out when to watch out and exert extra effort to control yourself. Try distracting yourself and develop new habits or try out new hobbies that you can do so that you do these instead of shopping in times of trouble and stress.
- Start by paying your debts from smallest to largest.
Some may think this counter-intuitive but do hear us out on this one. At first glance, it makes more sense to pay for the biggest debts; after all, these have the greatest impact on us, and they require much more time and investment to pay back. But such thinking does not take into account an important aspect of saving, paying debts, and handling finances in general – the psychological aspect.
Why start with the smallest debts, a method also called “the snowball approach”? This is mainly because you are more likely to finish paying them off completely more quickly and faster. And that matters because more than how much you owe, what is more, important to attain being debt-free is keeping the motivation to pay debts off regularly and continuously.
These victories of crossing out even the smallest debts from your list are great motivators for just that. This isn’t just a made-up advice either; such claim is supported by a study done by Kellogg researchers.
- Develop shopping techniques.
What we mean by this is whenever you feel the urge to spend, it is a good idea to talk and ask yourself some questions: Do you need this or do you just want this? Of course, this is easier said than done, but the key is to program your mind into being disciplined.
The first step here is how the brain works. Did you know that stores and shopping malls have tactics of their own to make you spend more than you need? From colours they use to attract you and your attention to the strategic placing of their stores, you end up passing by more stores than necessary and therefore, browse through more items.
This is why you will have to learn techniques of your own not to be fooled by their manipulative ways. Start by avoiding to window shop and more importantly, touching items that catch your attention. A psychological study shows that when you touch an item, you are more likely to buy it impulsively. This is because when you do so, you unconsciously spark a relationship or attachment between your brain and the object.
It also helps to ask yourself “what are you grateful for?” whenever you feel like spending and shopping again. You might be wondering how such a practice can help, so best take the proof from an actual research from Northeastern University. According to the study, people who wrote down what they are thankful for are shown to have more willpower and self-control than those who didn’t.
- Organise your room & workspace
If you want to reprogram your brain to save more and spend less, it is essential that you start with a clean slate. By listing down all the things you own, organising them, and throwing out those that you don’t need, you are pretty much hitting the ‘restart’ button on your brain.
This makes a lot more sense if you bring to mind the two benefits of cleaning and decluttering your workspace; first, you can see what you already have and don’t need to buy again, and second, you will be able to determine the kind of stuff your purchased but don’t really use and therefore, don’t need to buy again.
When you are doing this step, it helps to categorise your stuff under four main categories: the things you need, sometimes need, want, and clutter (those you neither need nor want and have no use for). Remember to try to be as honest as you can when you do this.
In times of doubt, ask yourself: when was the last time I used this? If it’s only gathering dust on your shelf, throw it to the clutter bunch. It may be difficult, but you will have to bid goodbye to these things, even those with sentimental value. It helps to mentally say “thank you” for the times these things have been useful and memorable in the past.
Once you are done with that, go back to your Clutter list. Try to remember how much you paid for these things. This way, you are helping yourself realize the cost of buying the unnecessary items that end up merely cluttering your space and slowly eating up what would have been potential savings in your bank account.
Look at the total and realize that even cheap items, if accumulated, are actually worth a lot.
She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen).
Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).