What Money Fit counselors have found over the years of working with bankruptcy filers is that overwhelming debt rarely occurs in an instant. Rather, it accumulates over time. Such debts are more likely to include large car or truck payments, monthly payments on new phones for all family members, and maxed out credit card accounts built through years of dining out, spending, shopping, vacationing, and buying stuff now to be paid back later.

Here are eight steps you can take today to minimize impulse spending and long-term overspending:

  1. Keep a written copy of your financial goals in your wallet

  2. Commit to the 24-hour cooling off period

  3. Do not add a credit card to your online shopping accounts

  4. Never use monthly payments as your buying guide

  5. Go cash only and ditch the plastic

  6. Set gift giving limits

  7. Buy to improve your life, not impress others

  8. Never accept a “Sale” price at face value. 

✍🏽 Written Goals 

If you have prioritized your upcoming major expenses (e.g. vehicle, vacation, school, home, appliance, etc.), write them down on a piece of paper as your financial goal. Then, place the paper inside your wallet next to your plastic cards or your cash. Doing so will force you to see (and acknowledge) your established financial priorities, leading to a quick evaluation of any current temptation to make an unplanned purchase. The top-of-mind question should be, “Is this purchase more important than my currently-planned priority?” 

🕔 The 24-hour Cooling Off Commitment 

Many consumers have benefited from the personal commitment to use a 24-hour cooling off period when faced with large purchases. When deciding to make a purchase or not, such consumers have committed to go home, wait at least over night (“sleep on it”) and then make the purchase decision the next day when the adrenaline of the previous day’s experience has subsided. 

If you are in a store and 24 hours seems too long to have to wait, make yourself wait at least until you get to another aisle before making the decision. Then, delay the decision until you are at the front of the store. Next, tell yourself you can make the purchase decision once you climb into your car. Once seated comfortably in the vehicle, you will not find waiting another 24 hours to be such a burden. One small step at a time away from the impulse purchase is the key. 

💻 Online Shopping 

When shopping online at e-tailers such as Amazon or Walmart.com, your first line of defense against overspending should be to remove your credit card from your online profile. Do not save credit cards to your accounts. Even adding a debit card to your account can lead to impulse shopping, but at least it will not be an instrument of consumer debt.

Additional, as you surf, you might come across “limited time” offers that may even show a countdown to when the offer will be withdrawn. There are two important points to remember: first, if you were not planning to make the purchase in the first place, few sales items will ever be worth the problems impulse purchases cause to your budget, and second, such offers are all marketing gimmicks. Think of yourself as a white mouse in a laboratory maze, with the marketers playing the part of the scientists. Do you want to play their game, or do you want to make choices based upon your own time frame and not that of the game master? 

🛍️ Shopping by Monthly Payment 

The first question you will get from car salespeople will not likely be “what type of car are you looking for?” or even “what is your price range?” but instead, “How much are you looking to spend each month?” If you shop by monthly payment rather than over all price, you allow the sales person to sell you a vehicle, refrigerator, or even a home that may be hundreds or even tens of thousands of dollars more than you had hoped to spend overall.

Instead, set a fixed maximum price you will pay. If you have to finance the purchase, stick to the maximum price, even if the salesperson tries to explain how you can make a “bigger” purchase and pay less each month. What they really mean is that you can pay lease each month but that you will be paying for many years longer than if you had stuck with the original purchase. 

💵 Go Cash Only 

Taking a plastic card into a consumer spending scenario is asking for trouble in many cases. Unless you are extraordinarily disciplined, you would do better to take into stores only the cash you have budgeted for the intended purchase. Leave your debit card, credit card, prepaid card, and even your checkbook at home to avoid the temptation. Studies show you will spend between 10% and 15% less with cash than you would with plastic. 

🎁 Set Gift Giving Limits 

Whether you are approaching a holiday or a family member’s birthday, overspending on gifts can ruin many household budgets for months, if not years, to come. The typical household that puts Christmas gift buying on a credit card will not pay off the debt for six months. That means all of the savings from sale shopping before Christmas are negated by the addition of interest paid on the carried balances for half a year.

Instead, create a list of people to whom you plan to give a gift (just like Santa would do), set a maximum spending limit for each person on the list. Stick to the list and you’ll stick to your budget. 

Buy to Improve, not Impress 

Before making a purchase, ask yourself if you are buying the item or activity in order to impress others or to improve your life. As an example, are you going all out and purchasing Halloween decorations for your lawn and driveway to impress the neighbors (and their trick or treating kids) or are you purchasing the much-needed new mattress for your bed so you can sleep better?

QUOTE:Taking care of your own needs is not selfishness, and wasting money on those who appreciate and need it least is not generosity.”

When tempted to spend money you know you have not planned for, ask if the purpose for the purchase is an internal one (improve your life or the life or a household family member) or an external one (impress others, attract the attention of others, give you bragging rights within your social circles, etc.). While unplanned expenses in either case is unwelcome, external purchases are harder to justify. 

🏷️ Sales Spending 

So, you found something for sale with a tag on it that says, “50% off?” So what? What is it 50% off of? More often than not, it is 50% off some imaginary figure that might as well be pulled out of a magician’s hat.

If the main motivation behind a purchase is to take advantage of a sales price, your personal and household stability will be at stake in the long run. Marketers make sure that there is ALWAYS something you want at 50% off some pretend price. You can spend yourself into the poorhouse by “saving” 50% off everything you see.

QUOTE: “Sales are not opportunities to save money but occasions to spend.”

Instead of accepting the sales sticker as a percentage off the seller’s make-believe original price, figure out how it compares to the amount you have planned for the purchase. If the sales item costs $10 and you budgeted $20, then it’s 50% your original price. If you budgeted $10, then it’s full price. If you didn’t budget for it at all, then it is literacy “infinity” more than your original planned for price. Nobody can afford infinity. 

Effective spending behavior (i.e. moving away from unplanned overspending) is based upon habits that take months and years to develop. If you make unplanned purchases, recognize the mistake, ask yourself what you can do better next time temptation hits, and move on. Perfection is not the goal. Progressing to a place where you are spending your money and other resources on your top priorities is the goal. Progressing, not arriving.

Related Reading: Prioritizing Household Expenses