by Maggie Germano
There is an idea in the personal finance world that any spending outside of necessities is frivolous and irresponsible. As a Financial Coach, I think that is narrow-minded and unrealistic. It’s important to build fun into your monthly budget, so that you can enjoy your life while still getting your money in order.
If you love fashion or just love to buy clothes for yourself, there are ways to make sure you do so while still being thoughtful with your money.
Here are 5 tips on how to keep impulse spending at bay.
1. Make a Wish and Need List
Remember when you used to make wish lists for birthdays and holidays? I used to go through Christmas catalogs and circle the items that I really wanted Santa to bring for me. Going through this exercise was sometimes just as fun as opening my gifts on Christmas morning.
For many of us, the fantasy and anticipation is more exciting than receiving the actual item that we’re craving.
I have one client who has admitted to loving the idea of buying things more than actually buying things. Her solution to her impulse spending and buyer’s remorse was to create a wish list for herself. She divided the list out by category (clothing, electronics, etc) and wrote down everything that was in her mind that she wanted to own someday. The exercise was half the fun and now she has a detailed list of fun things that she can invest in down the road.
If you find yourself giving into urges to buy clothing that seems fun or cute in the moment, sit down and make two lists. Make a lofty wish list that includes every item you can think of wanting. Don’t limit yourself, put down everything!
On the other list, write out the things that you actually need. Perhaps your winter boots are falling apart and you need to invest in a new pair before this winter rolls around. Or maybe none of your pants actually fit anymore. Get clear on what those things are so that you can map out when you can afford to purchase them.
2. Go Through Your Closet
It’s amazing how often people probably buy duplicates of the things that they already own. It’s so easy to forget about what you already have. And then before you know it, you have multiples of similar items, and you’re not using any of them enough to justify the cost.
Going through your closet and getting clear on what you already have can not only save you money, it can give you a renewed appreciation for the clothing that you own.
Taking things a step further, take Allison’s advice as a Personal Style Coach and create new outfits out of the clothes that you have. Take pictures of yourself wearing them so you don’t forget and can get dressed more easily in the morning.
3. Set Parameters For Yourself
If you’re going to be responsible with your money and stay on budget, you have to put rules into place. That’s just how it has to work. But the important thing to remember is that these should be rules that you’re setting for yourself, rather than rules imposed upon you by others.
Take your full financial picture and get clear on what your needs and goals are. Everyone’s situation is going to be different, so your rules should be based on your own needs and limitations. Get specific with your parameters so that it’s easy to follow them.
Your parameters can be specific spending amount limits or you can set limits to when or how often you’re shopping.
For example, a client of mine set a rule that she can only make two purchases on any given day. This doesn’t just apply to clothing shopping, but any spending. So if she bought coffee in the morning, she can only spend money one more time that day.
This structure makes it much easier for her to bypass her favorite store on the way home after work if she knows she has to go to the grocery store. This same client also chooses one item from her wish list to treat herself to each month, but only as long as that item fits in her budget for that month. This way, she knows that she will always be getting a treat every month, so she doesn’t have as much of an urge to splurge. Impulse spending avoided!
4. Remove Your Credit Cards from Online Shops
I guarantee that everyone reading this has been victim to stress shopping at some point in their lives. I once had a client who hated her job so much that she would order things on Amazon so that she would have something to look forward to after work. It makes sense that people use impulse spending to fill a separate need or void. But oftentimes, it’s not solving the problem, and can create more problems in the form of credit card debt.
Online shopping has made it much easier to buy more than we need and spend more than we can afford. The apps on our phones are even worse! Just one click and you’ve made a purchase without necessarily thinking about it.
Sometimes the solution is to get in our own way.
Make it harder to spend money without having to take an extra step or thinking harder about the purchase. Delete your credit card information from your most used platforms. This way, you’ll have to find your credit card and type in the number in order to make a purchase. This will help you to think twice about the purchase and decide if it’s something you really want.
5. Create a Shopping Fund
I’m a huge fan of creating separate savings accounts for separate goals. I’m also a proponent of fun funds, which means you’re setting money aside just for the fun things you want to enjoy. If you love clothing shopping, or if you have expensive pieces to invest in, create a shopping fund for yourself.
We can’t only allocate our money for responsible things or we’ll lose motivation.
This fund can be approached in a couple different ways. First, you can set an arbitrary number for how much you want to spend on clothing in a given year. From there you can divide that number by 12 and have that amount directly deposited into your shopping fund each month.
A different approach is to add up the cost for your wish and need list items. Give yourself a deadline for when you want to acquire these items. Divide the cost by the number of months until that deadline. That number is how much you should be saving each month until then. If you take this approach, you’ll always have money set aside for your shopping excursions.
Which of these 5 tips will you use to curb your impulse spending?
About Maggie Germano
Maggie Germano is a feminist and financial coach for women. She helps women improve their relationship with money so they can take control of their financial future. Maggie offers one-on-one financial coaching, workshops, writing, and speaking engagements. She also founded Money Circle, which is a safe space for women to talk about money without feeling judged. Passionate about helping women earn more and closing the wage gap, Maggie was also trained as a salary negotiation facilitator by AAUW.
Prior to starting her business, Maggie spent 7.5 years at the Pew Charitable Trusts, first in environmental communications, and then moving into strategic planning and evaluation for advocacy campaigns.