Quit Overspending! Save Up For Your Down Payment
Posted by Admin Staff on Monday, June 28th, 2021 at 11:44am.
We all have good intentions when we start out budgeting. Once a few weeks go by, it's difficult to fight the urge to spend! Sticking to a budget is harder than it looks for most of us. We want to save the money for, in this case, that down payment on a house, but the draw of retail therapy is strong. We get it. That's why we've put together a list of everyday tips that will stop your little purchases from turning into a big problem.
Understand Your Spending Triggers
The key to tackling any problem is doing some introspection first. Take a look at yourself before beginning any external changes. Overspending is almost always a coping mechanism we use to stave off uncomfortable emotions and physical sensations. It can be something simple, like going grocery shopping when you're hungry. You end up buying way more than you intended, and put more snack foods in your cart than you intended. There's one higher grocery bill. Other times, your spending trigger could be complex, such as peer pressure. Maybe your neighbour(s) has(have) a nice camper, or always have cool gadgets. In order to feel like you belong, you go out and make similar purchases. This can be a huge problem if your neighbour can afford these luxuries, and you can't. You fall behind, and hopes of saving money are completely dashed. Becoming aware of those emotions and/or physical sensations before acting on them is your first, most important task. It's uncomfortable because you're dealing with feelings, but we promise you, this step is worth it. Once you're aware, evaluation is next. This helps you understand why you feel the way you do. Time of day, environment, mood, peer pressure and lifestyle are the most common factors that influence spending. Think about why these factors affect you. Once you know, these factors don't seem as scary, or perhaps they've lost their power over you entirely. This consciousness gives you the power you need to stop future purchases. You can look at yourself objectively, and resist impulse buys.
Track Your Spending
This one can be done in tandem with the step above, or shortly after you become aware of your triggers. Track the dollar amounts of your purchases, right after you make them. If you wait until the end of the week, or even the end of the day, you can completely forget. This tracking can give you insight as to what triggers your overspending, as well as just being a definitive list of where your money has gone. Lots of great tools exist to help you track, including apps on your phone. If you find you do a lot of online shopping, try tracking using your phone. That way, you don't even have to change mediums - it's all happening through one device! Also, you may not even have to download anything. Online banking sites and apps already have a detailed list of purchases, and some actually have an "Insights" section to let you know if you've spent a higher amount on one type of item per month.
Shop With A List
An oldie, but a goodie. Shopping with a list prevents you from making impulse purchases while you're at the store. This is especially helpful if your willpower wavers. Have a physical list in your hands can reinforce the idea that, "No, I need to stick with what I need - not overindulge in what I want right now." It's as simple as jotting down a quick list before going to the store. Bonus: you might even lose a couple of pounds, not having the extra snack foods! It's a win-win!
Avoid Saving Your Credit Card Details Online
Shopping websites and internet browsers come equipped with a way to save your information so that checkout is faster the next time you purchase. SKIP THIS STEP. Or, if you already have it saved, delete the info. Anytime you get the message, tell it to take a hike. While saving the info does make checkout faster, it also makes purchasing things way too convenient (it's almost like they're preying on your impulse decisions! Wink, wink). Most of the time, just the act of going to get your credit card gives you enough time to think, "Do I really need this?" If the answer turns out to be no, you've just saved yourself one purchase. Multiply this instance by other instances during the day, and you could save yourself a few bucks. Over the course of a month, you could save yourself a couple hundred bucks. Furthermore, from a security viewpoint, it's safer to skip saving your details anyway. Thieves won't be able to make convenient purchases on your dime.
Set Quantifiable, Short-Term Goals
Setting a goal, or multiple goals, is such a useful tool when it comes to saving money. We can take the feel-good boost we get from having an impulse-bought doughnut, and apply it to our savings. This way, that rewarding boost affirms our saving, and subconsciously gives us the desire to save more - in order to get that feel-good boost again. Now, instead of having a generic short-term goal, make your goal as specific as possible. It's okay if it's something small. For example, let's say you buy a coffee every morning before going to work. Instead of making your short-term goal "I will spend less on morning coffee," attach prices to it to make it quantifiable. "I will only spend a total of $8 on morning coffee this week, instead of the usual $15." You haven't quit buying morning coffee, you've just decreased the amount. Maybe you're actually using your coffee-maker at home to supplement the morning coffee routine, or maybe you're trying to also decrease your caffeine intake at the same time you're saving money. This type of goal makes it easier to accomplish, and keep track of. At the end of four weeks, you haven't spent $60, you've only spent $32. In this one month, with only one goal, you've saved $28. In one year, with only this one goal, you'd save $364. Your small purchases will add up. Use more quantifiable short-term goals to save more, or just have one. It's all up to what you think you can do, and how quickly you need to save for your down payment.