Waiting two weeks to purchase non-essential items. When I found myself wanting to purchase something new and non-essential, I forced myself to wait two weeks before committing to the purchase. Impulse spending is so easy via tools like the Internet, and a lot of times, a small purchase can seem inconsequential when it’s just a click away. I forced myself to bookmark items I wanted to purchase in my web browser and wait two weeks before committing. I’d bookmark them with the date I found them, so I knew that I was on the right track. Often, after two weeks, I’d realize I didn’t really want or need that item and that I’d forgotten all about it.
One in, one out rule. My biggest spending areas are clothes and beauty items. I forced myself to utilize a one in, one out rule, meaning that if I purchased an item of a certain kind, I had to get rid of an item of the same kind that I already owned. For example, say I’m looking at purchasing a new lipstick. I’d go through what I owned, see what I had that was similar, and decide if I could part with one of the similar ones in exchange for the new one. Often, I didn’t want to part with the similar items, and realizing how many items I had that were similar convinced me not to make the purchase.
Asking myself if there were any bills or payments that I should be spending that money on instead. I worked my way out of $5k+ in credit card debt, all from needless spending, in the last six months. One of the biggest tips that got me through it was looking at a purchase and asking myself if the money that it would cost could be better allocated elsewhere. For example, say I had already made a payment on Card A for that month, but it still carried a $500 balance, and the item I was looking at was $50. Instead of allowing myself to purchase that item, I’d remind myself that even if the money was sitting in my checking account and seemed free to spend, it really should be spent paying down my debt on Card A.
Leaving my credit cards at home. I got myself into a tough spot with credit cards – the payments weren’t unmanageable and I had no delinquent payments, but the debt was definitely more than I could reasonably afford to carry with me and chipping away at it in small doses wasn’t doing me any good. I had multiple credit cards, so I left the ones that I used the most or had the highest balances at home, and only left the house with my debit card and primary credit card. This way, if I ever got into a bind, I had a card to use, but by leaving the others at home, I made myself incapable of spending on them while out and about.
Reminding myself of the bigger picture. I found it so easy to talk myself into “small purchases” by telling myself that I was only spending $30, so it wasn’t a big deal. Reframing the way I looked at spending made a huge impact for me. $30 might not seem like a lot to spend on a frivolous item, but when you do that every day, or multiple times a week, it adds up. I had to teach myself that sure, one purchase isn’t a big deal, but how that one “inconsequential” purchase spiraled into two or three or four “inconsequential” purchases was. $30 on one item isn’t much, but $30 on one item once a week for a month is $120 – that’s a chunk of change that could be used to pay down debt, put into savings, etc.
Immediately transferring a portion of my paycheck to my savings. This was the easiest habit to adopt. Even if it was only $50, getting into the habit of transferring money in – and not out of – my savings each time I got paid established a savings habit that has gotten me out of $5k in debt and netted me now about $1500 in my savings account. This might seem like a small amount to some, but to me, it was $1k more than I’d ever had in my checking account at once, and seeing that number grow has encouraged me to incrementally increase the amount of money I transfer into my savings account with each paycheck.
Budgeting enough money for essential items that I didn’t have to fall back on credit cards to pay for them. This was one of the hardest to adhere to. I found that, because I’m in my early twenties and haven’t been financially independent before, budgeting was damn near impossible. I never knew how much to spend on groceries, gas, bills. Taking the time to sit down and analyze exactly how much I was spending, how I could cut back on that, and where I should be allocating more money for essential purchases kept me from putting those purchases on credit cards because I didn’t have the cash for them.
Allotting myself a certain amount of “free spend” money each check, and taking that money out in cash. It’s so easy to swipe a card and not think of what that’s doing to your bank account. I started budgeting out my “free spend” money (shopping, restaurants, entertainment) each check and then taking that amount out in cash and only letting myself spend that on frivolous purchases. If I wanted to purchase something online, I had to deposit the cash back into my account to use it. This helped me stop blindly swiping my card and really start thinking about the tangible impact spending had on my bank account.
Using an app like Mint to track my spending, savings, and goals. I hated Mint when I was in debt – honestly, it felt like it was constantly reminding me of my debt and my poor spending choices (as it should have done) and it made me ashamed to use it. By forcing myself to look at it daily and track my spending by categorizing purchases, I really opened my eyes to how “small” purchases every few days could easily amount to thousands of dollars each month that should have been put toward debt and bills.