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Thoughtful Spending: From “Gotta Have It” to “Gotta Think It Over”

photodune-8751997-paper-coffee-cups-in-rows-sThe price of anything is the amount of life you exchange for it.”
~ Henry David Thoreau

It is not unusual for clients to tell us that they find it hard to keep on budget, or they find it impossible to come up with additional funds for savings and investing, or they just always seem to overspend.


When we delve further, we often find that impulse buying and those “little things” are to blame.


Impulse buying is purchasing items you just happen to see. These are not on your shopping list; they are not necessities; they are not budgeted. But there they are, staring at you as you wait in the checkout line, or hanging on the mannequin as you pass by, or jumping out at you as you browse the store. Even harder to ignore are those items that pop up on your computer screen or cry out to you from Amazon or Google. Merchants count on you seeing and buying. And without a great amount of discipline, it is difficult to avoid the temptations.


Spending money on daily or weekly “little things” reminds us that impulse buys can become habitual expenses. Think about the “little things” you spend your money on every day. Purchasing unnecessary items such as lattes, bottled water, fast food, cigarettes, magazines, and so on can be a significant waste of money. Chances are you don’t even realize how much you’re actually spending on these seemingly “little” purchases.


So how can you get all of this under control?


Some strategies can be used while you’re shopping. Before you take out that cash-or worse, the credit card-to make a purchase, take out your smartphone instead. Take a picture of what you are thinking of buying and walk away. Wait until the next day to look at the photo. In most cases, the impulse will have passed.  


When buying online, most sites allow you to use a wish list or add items to a shopping cart for future purchase. Do this and then wait one day. The item you have to have today probably won’t be a “must have” tomorrow. And if the urge to buy it is still there, consider what you earn at work on an hourly basis and calculate how many hours of your life you will need to exchange to buy the item.


If that doesn’t do it and it is really something you would like to have, decide what you need to do to pay for the item in cash rather than credit. Saving the cash to make the purchase will again delay the impulse, and once you have accumulated the cash you may decide to use it for something more worthwhile.


It’s also important to think long-term. Start by honestly identifying those “little” expenses and considering whether you could redirect that spending somewhere else. For those little items that you buy out of habit, take the picture, print it out, and for one month list on the picture the item’s cost and how many times you bought it. At the end of the month, total your cost and multiply by 12. What amount of money are you really spending for those “little” things? Are they worth the cost? Could you have used the money more wisely? Could you substitute a more cost effective option?


At the end of the day, it all comes down to thinking before you buy. A purchase delayed could be a purchased denied, and most likely that’s a good thing.