Hannah, 33, wants to save more money but can’t seem to force herself to do it. She knows it’s possible — she works in real estate, and her salary covers her living expenses easily — but whenever she has extra money, she spends it. It’s embarrassing, and she’s tried putting together budgets and goals, but that doesn’t help in the moment when she wants to buy something; there seems to be a disconnect between making a plan and executing it. She’s not in debt (yet), but she’d like to be able to exercise self-control. What can she do to curb the impulse when it strikes?
Every week, I talk to experts about how to make better financial decisions and sometimes they sound like a broken record: Make a plan, don’t freak out if you screw it up occasionally, and think about the apartment/beach house/llama farm or whatever long-term goals you’re saving up for. But I always get stuck on the same problem: Most of us know we should spend less and save more, and start the day with every intention of doing so. But how can we train ourselves to want less? In my experience, when a late-night internet wormhole brings you face-to-face with the perfect [name your vice here], in your size and with free shipping, even the most bulletproof budget won’t stand a chance.
Study after study shows that people are easily swayed by any number of factors when shopping. We spend more money when we’re sad, when we’re hungry, when we’re drunk, when we’re online, and even when we smell certain scents, such as vanilla or cinnamon. In short, “self-control” is a slippery creature, and it’s normal to lose your grip and buy things you don’t need, even when you know better. It’s part of being human.
But aside from never using the internet or leaving home again, how can you protect yourself from careening into impulsive purchases? Beverly Harzog, author of The Debt Escape Plan, learned the hard way — she was $20,000 in credit-card debt when she figured out how to put a lid on it. “I still love to shop,” she says. “I have a handle on it now, but it’s still hard. My rule, whether I’m in a store or online, is that I have to wait at least 24 hours before I buy something. I’ve trained myself to press pause in my head. Whatever it takes to slow yourself down, do it.” (She also advises seeking professional help if you’re really in trouble. “I saw a therapist when I was going through these issues, and it was tremendously helpful,” she says.)
By definition, a waiting period will keep compulsive spending at bay because it allows the compulsion to pass. But enforcing it still takes willpower. That’s where website-blocking tools come in handy, says Harzog. “While you’re at it, unsubscribe from retailer emails, and you might even want to block Facebook, too,” she adds. “Seeing pictures of other people’s lives can make us envious and insecure, which pushes us to shop.”
You’ll also need to be patient. “The 24-hour rule took practice,” says Harzog. “When I was trying to get out of debt and be more disciplined, I would buy something, keep the receipt, and take it back a few days later. It was like training for self-regulation.”
Of course, a buy-and-return marathon isn’t the most convenient way to institute a cooling-off period. And that’s where other checks and balances come in: My friend Carolyn knows when she’s vulnerable to impulse spending (the middle of the week, in the afternoon, when she’s bored at work), and will send a link to whatever item she’s contemplating to a friend or two before pulling the trigger. “It’s helpful to get a second opinion,” she says. “A friend will tell you, ‘No. You have a shirt that looks just like that already,’ or make you realize that it’s not worth it.” She also has a rule that she has to look through her wardrobe before adding something new to it. “When I realize how much is in my closet already, it lessens the urge,” she says.
In addition, both Carolyn and Harzog employ a self-reward system — what Harzog refers to as a “budgeted splurge,” or a short-term goal that’s factored into your financial plan. This is different from larger, amorphous objectives like a cushy retirement or a down payment on a house, and it should be a novelty that you can afford to do often (research shows that frequent, varied small pleasures are more satisfying than rare big ones, particularly if they’re experiences). Planned splurges also build anticipation, which has been shown to boost the release of more dopamine (a neurotransmitter that affects feelings of pleasure in the brain) than obtaining the reward itself.
These strategies — taking a moment to reach out to a friend, appreciate what you have, or plan for something new and fun in your future — fall under the umbrella of positive psychology, explains professor Sarah Asebedo, who studies financial planning at Texas Tech. “Research suggests that enhancing positive emotions and managing negative ones can help people overcome the impulse to spend in the moment, and promote more prudent financial behavior,” she says. Indeed, studies have shown that happy people usually have better self-control and make smarter financial choices — which is all well and good, but how does that help you ward off the Tuesday-evening malaise that might lead to new shoes? “When tempted to spend, pause and go do something that elevates your mood, such as exercise or engaging in a hobby, talking to a family member, or doing something nice for someone,” says Asebedo. “Doing an activity that makes you feel good and contributes to your well-being should help you view the purchase in a new light, so that you can make a better decision about whether it’s in your best interest.”
Positive psychology also highlights what doesn’t work: a punitive outlook in which you berate yourself for wanting the great (but technically “unnecessary”) things that money can buy. “I don’t believe in making rules like, ‘I’ll never have a latte again.’ If you want a latte, get a latte every once and a while,” says Harzog. “If you’ve been restricting yourself, that’s when you’ll go a little bit crazy with overspending. Plan to let yourself off the hook every now and again — but set yourself up so that you’ll really enjoy it, and make it part of your budget.”