Managing Impulse Spending

One of the greatest skills you can master when you begin to work on your money management skills during your financial journey, is the skill of managing impulse spending. Personally, until almost my mid-twenties, I did not learn to truly manage my impulse spending, which is still early compared to most. This helped me save so much money and truly evaluate my overall spending.

Whether you are new on your journey or you’re starting over, I hope these tips will help you with reevaluating your relationship with money and impulse spending.

X-Hour Rule

This is a simple, but effective way to begin trying to control your impulse spending. The timeframe can differ for each person (ex: 24-hour or 72-hour rule). The idea around this rule is, instead of making large purchases as soon as you get an urge to do so, you would set aside the purchase by leaving it in your cart for the specific timeframe you decided on. 

This helps you to take some time to actually think about the want or need for this item. You may begin to realize that by waiting, you may decide you don’t even want to purchase the item anymore or you came up with an alternative plan to fund this purchase. This helps you to truly take control of your spending for items and categorize them by “needs” vs “wants”. 

Planning Ahead

Creating a plan in your monthly budget to purchase items is another great way to manage your impulse spending. It shows intention and will eventually help you with establishing discipline when it comes to your overall money management skills. You can consider creating a “Shopping” line item in your budget to capture these type of expenses. 

“Life’s Short” Sinking Fund

Some people enjoy smaller, simple pleasures when they make quick purchases as a “pick me up”. Trust me, I understand completely. This is why creating a “Life’s Short” sinking fund would be an easy way to continuously put aside money for these occurrences. You can consider putting aside at least $25 - $50 every paycheck or a set number each month that works for your budget. You’ll be able to easily pull from this account to cover those expenses, and still not derail your overall financial plans.

Learn more about sinking funds here.

Creating a “Want” List

Personally, this was something I implemented in 2020 and it’s a running list to this day. What this means is there are a number of things I’d like to purchase eventually, but there’s no immediate need for these items. However, whenever I earn extra money or I’ve met specific financial goals I was working on, I’d go to this list and make a purchase completely guilt free! This helps me a lot with allowing myself to never second guess my purchase, because I simply know these are on my “want” list and I’d be happy making this purchase for myself. 

Bonus Tip: In general, some people don’t think about their childhood and how it affects their current ability to impulse spend. Many times, our childhood can have a direct impact on why we spend frivolously without thinking about the financial consequences. 

Impulse spending doesn’t simply go away after one or even a few tries, but it takes an intentional attempt to build better financial habits around it!