Money: 9 Tips to Avoid Overspending.

Every Wednesday is Tip Day.
This Wednesday: Nine tips to avoid overspending.

One source of unhappiness for people is feeling out of control of their spending – and this is a problem that’s far more widespread now than it was a year ago. Feeling regret about having bought something is a very unpleasant sort of unhappiness.

Being an under-buyer, as opposed to an over-buyer, I don’t generally have much trouble avoiding overspending. I have more trouble prodding myself to make the effort to buy things I actually need.

Nevertheless, even with my under-buying ways, I sometimes come home with something I didn’t really need to buy. Stores use extremely clever strategies to winkle customers into making purchases. Here are some strategies to make sure you don’t make purchases you regret:

1. Be wary of the check-out areas. There are lots of enticing little items here; ask yourself if you really need something before you add it to your pile. How many times have I picked up a jar of Balmex?

2. Get in and get out. The more time you spend in a store, the more you’re likely to buy. Even better: don’t even go in the store. Then you definitely won’t buy.

3. Question the need for an upgrade. You might want that device with a slick new function, or to get the improved version of what you have now, but do you really need it?

4. Be polite to salespeople, but don’t feel like they’re your new best friends. Don’t buy something because you’re worried about hurting their feelings or having made them do a lot of work helping you or explaining products to you. (At the same time, be respectful of clerks’ efforts. The other day, I was in Gap Kids, and I saw someone rifle through a pile of beautifully stacked shirts in a way that meant that they’d all have to be re-folded. Was he malicious or oblivious? I couldn’t tell.)

5. Don’t shop when you’re in a hurry or when you’re hungry.

6. Stick to a list. I’ve found that after I’ve decided to buy one thing, I’m far more likely to throw in other impulse items, because I know that I’m committed to going through the hassle of paying.

7 . Beware of sale items, which make you feel like you can’t afford not to buy, or limited-time offers, which make you feel like you have to take advantage of a special deal. If you don’t need or want something, it’s not a good deal, not matter how cheap it is. A friend of mine told her husband, “I got this 50% off!” and he answered, “That means it was 50% ON.” Along the same lines…

8. Don’t buy anything that you don’t know you need – this is especially important with clothes. If you’re not careful, you can buy a pair of pants marked down 75%, then realize that you can’t really wear them unless you buy the right shoes to go with them.

9. Choose cash or credit card. Some people find it far harder to spend actual physical cash; other people find that paying cash makes a purchase seem trivial, even when the dollar amount is high. Know whether you’re more inclined to overspend with cash or credit cards – and leave that payment method at home.

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I discovered a terrific new site for working mothers, Mama Bee. Great material, helpful information, and beautifully written.

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Interested in starting your own happiness project? If you’d like to take a look at my personal Resolutions Chart, for inspiration, just email me at grubin, then the “at” sign, then gretchenrubin dot com. (Sorry about writing it in that roundabout way; I’m trying to thwart spammers.) Just write “Resolutions Chart” in the subject line.

Comments

[Christopher]

#10 - Budget, budget, budget!

That has saved my life since I started doing it religiously 2 years ago.

[Karen]

Interesting concept - another blog I read - Adventures in Voluntary Simplicity - talks today how spending or in this case, not spending affects our economy -

Here’s the dilemma for our economy: the more we save and pay down our debts the more we are perpetuating this recession. Indeed, it certainly appears as if this new-found embrace of simple living values among Americans is wreaking havoc from Wall Street to Main Street:

Americans’ Saving More, Spending Less :
“Economists call it the "paradox of thrift." What's good for individuals — spending less, saving more — is bad for the economy when everyone does it…Like a teeter-totter, when the savings rate rises, spending falls. The latter accounts for about 70 percent of economic activity. When consumers refuse to spend, companies cut back, layoffs rise, people pinch pennies even more and the recession deepens.”

[Nora]

This is great advice. I am slowly discovering for myself that I am happier having the security of money in the bank than having more stuff. It is true about the credit/cash. If I have cash I can't help but spend it, there is no effect on my balance if I spend it. But I will think purchases over more if I have to use my card; even if it is a $3 buy.

[Sabrina]

You have made some really good points with your tips today. Though - in my case - have to disagree with #5. If I'd go grocery shopping without being hungry, I wouldn't buy a thing and leave the shop with an empty cart - I'm serious! I need to be hungry to buy food. My husband is the right opposite.

To #9 - I actually find it better to pay in cash, like we mostly do it over here in Germany, because you have a better overview of the money you actually own. Checks (we don't have those anymore) and credit cards are big enticements to spend more money. Unless I'll ever be rich, I wouldn't use credit cards.

[Vixel]

I would do very well to follow this advice, I'm definitely an over-spender, though I'm trying my best to mend my ways!

[Kathryn]

Cash vs. credit

Everybody's probably different about this, but one of the advantages of buying with plastic rather than paper is that with the plethora of financial services out there like Mint and Wesabe, it is extremely easy to get an idea about your spending patterns. With cash, it takes a lot more discipline to track where it disappears. For those who have a tendency to abuse credit, perhaps using a debit card is a happy medium.

[The Healthy Librarian]

Gretchen--I'm sure you're starting to feel like I'm such a noodge (pest) with my frequent comments! But, I have to weigh in on #9 Choose Cash or Credit.

It seems like years ago when I posted about the the problem of easy credit. Before all hell broke loose, 3 months later.

It's a quick summary of what some of our better brains have to say about credit, frugality, temperance & neuroeconomics.

David Brooks, Benjamin Franklin, Barbara Dafoe Whitehead & Jonah Lehrer

Cash or Credit Card? Does it Make a Difference? It Does to Your Brain & Your Future.

http://www.happyhealthylonglife.com/happy_healthy_long_life/2008/06/cash-or-credit-card-it-does-make-a-difference---to-your-brain-your-future.html

Has anyone read the NYT The Secret of a Sound Marriage? Marry Your Financial Soul Mate?

http://www.happyhealthylonglife.com/happy_healthy_long_life/2008/09/new-york-times-the-secret-of-a-sound-marriage-marry-your-financial-soul-mate.html

[from the desk of...me]

Thanks for sharing. My favorite is having a list. I rarely buy on impulse and if so, I limit it to things under $5.

[Beth]

I find that my over-spending is mainly down to buying little things on a regular basis than splashing out on big things every now and then. A starbucks coffee here, a skirt in the sale there...it all adds up. And the problem with this kind of spending is that when my bank statement arrives I don't actually remember what all those items costing just a few pounds actually were, , whereas if I was making big purchases I would know exactly where all my money had gone. Maybe if I stuck to a list I would feel more in control of where my money goes.

[FupDuckTV]

Good list. #5 is a house-hold rule at my house.

Another tip, avoid using Debit cards (goes with your #9 tip).

[FupDuckTV]

Good list. #5 is a house-hold rule at my house.

Another tip, avoid using Debit cards (goes with your #9 tip).

[georgie]

Dad always said "Think about how much you make per hour at work. Do you want/need the item enough to make it worth the hours of labor it takes to pay for it?" I like to have save days where no money is spent except for one mandatory latte. Also set aside a small amount of cash between paychecks for small purchases. We don't use debit or ATM cards.

[Neal Frankle]

I love these tips. My worst mistake was when I bought a car 15 years ago (I've since replaced the car....)

I went when I was tired and hungry and I got eaten up alive by the salesperson. I never go to showrooms anymore. I buy the cars through the internet saving time, money and frustration.

Thanks for great tips.

[kate]

Great advice. For me, paying with cold hard cash (or bills) is the biggest deterrent to spending. When I have to hand over the money right then and there, it stings. Plastic payment is so tempting; almost feels like I walked out of the store with items free of charge (until the bill comes, that is). I wish I could stick to this more often. Then, when my weekly allowance of cash is gone...it's gone. NO more spending!!

[Yes, But Still...]

Tip #6 Stick to a list.

-> Will save you lots of money in the long run.

[Amanda]

One I use frequently is to carry the item around and then put it back before going to checkout. For some reason holding the item satisfies my need to have it.

I also agree with Christopher. Budget, budget. Budgeting like my life depended on it helped me recently pay off $23K in credit card and car loan debt in just 3.5 years. Impressive considering I didn't make more than 33K a year for the first 3 years.

[Jessica]

Another tip I use: Decide how much I think something is worth BEFORE looking at the price tag. If I decide a blouse is worth $25, I won't buy it if it costs more than that. I do pretty well sticking by this rule, and it really ensures that something is WORTH what you spend.

[Frugal, Freebies and Deals]

I am featuring a series on my blog right now entitled "Does living frugally make you happier?” I don't think there is a real consensus on if it does or not among my readers because of our constant desires to have more. But it definitely is a great topic for conversation and learning.

[Laurie Longenecker]

The day I figured out that my debit card could take the place of my charge card online, as well as off-line ( everyone will take it! ) was the day I stopped charging things. I was using my charge card as a convenience but it only got me in trouble! I haven't charged anything in over a year now. It feels fantastic!!! I was in debt with my charge cards and now I'm seeing the light at the end of the tunnel. I'll never go back! Of course you have to have the money in the bank but it REALLY makes you stop and think before you buy something.

[Sam]

I'm with Laurie, we use our Visa Debit card for all day to day purchases. For us Debit gives us the ease of credit (easier to track, protection, we even get points) but with the money coming right out of our checking account Debit keeps us within our budget.

[Susie]

I agree about shopping with a list. I also wanted to add that for food shopping,you need to make a weekly menu list and only add those items that you need in order to cook what you have planned to eat for that week.

Budgeting is so important as well, and sadly too many people are living way past their means because they are not budgeting. The best way to start budgeting is for a month to write down every single penny you spend.

[KK]

Best budgeting tools for spenders: the 60/40 solution. Look up the article on MSN money. This method changed my life and allowed me to save lots of money effortlessly without a lot of complicated budgeting. I did need to open up lots of different bank accounts for different buckets of money but for me it made it much easier.

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[Free Samples By Mail]

What about Free Samples! And Coupons and EBAY to save money? I get lots of great things and practically zero cost. Anything you can buy in the store, you find some where else cheaper. One tip that works for me is go on ebay, do a broad search for something (for example earings) and search for the items whos sales are going to end the soonest. I've gotten amazing deals that way.

Also there are a million free samples webpages out there. Here are just a couple: http://freesamplesnosurveys.blogspot.com/