Spending money is fun! It gives a quick endorphin rush that elevates your mood and improves your outlook on the world around you. Impulse shopping, whether it is in person or online, hooks everyone at some point and once it begins, it is hard to stop. For many people, even the excitement of saving money to buy a house, go on a vacation or retire is not strong enough to combat the impulse-shopping bug!

Part of the problem is not having a financial plan or budget. Most of us, for example, that we are going to go on a vacation once we have the money but we never sit down to make a plan of any sort. There is little incentive to save when the reward, in this case a vacation, is arbitrarily ‘in the future’. Pick a date and a location first and then develop a financial plan that makes that trip possible. If you know that by putting $300 a month away for next six months will let you go on your dream vacation, then the incentive is much higher to stick to your plan. Use the same system for buying a house, planning your retirement or any other major purchase you are wanting in the future.

A budget is a nifty resource as well. Write down all the money you have coming in over the course of the month in one column and in the other, list your expenses – the difference is what you have to live on for the month. Now list your personal expenses – food, entertainment, hobbies, etc. Subtract that from the remaining balance and you have your ‘fun money’. How much is it? Can a portion of that be added to your credit cards or mortgage to help lower your debt? Can another portion be put into a retirement fund? What remains? The reality is that is your spending money for the month and, for many of us, that number is close to zero so instead of putting money away for our retirement or paying down debt, we spend that money, adding further pressure to an already difficult situation.

Financial Planners, professionals that help people do this for a living, are a wonderful resource for those of us who cannot control out spending. They spell out your financial situation, help build a plan that pays down debt while still saving for your retirement and leaving you some money left over for spending. For many people, just having someone other then a spouse or a parent to answer to when it comes to impulse shopping helps them to stop spending money unnecessarily while taking pressure off their close relationships.

Here are some other tricks as well to help you gain control of bad spending habits:

  • Pay all bills as soon as you are paid so that the money goes where it should instead of sitting around and getting spent on unnecessary items.
  • After every payday, set up a system with your bank where money is automatically deposited into a savings fund so it is out of your account before you have a chance to miss it.
  • Choose a savings fund that requires 48 hours notice to release any requested money such as a Money Market account. Forty-eight hours gives you time to think through the proposed purchase and allow the excitement to wear off. Savings accounts are great for short-term savings but the money is too accessible for most compulsive shoppers.
  • Keep track of money in a savings account or fund – there is a satisfaction that comes with watching a savings account grow.
  • If you are saving for a trip, a house or retirement, keep examples of your ‘reward’ at hand – pictures of a sunny beach, the house of your dreams, a set golf clubs, etc.
  • Think through each purchase and ask yourself if you really need the item or if there is something you want more like the trip at the end of the year or the new house.
  • Keep credit cards at home when you go on shopping trips. Driving home to get the card is a hassle and you are only going to do that if it is something you really want. This stops spontaneous purchases that you going to regret.
  • Keep credit cards away from the computer! For many people ordering items over the internet is even more fun than purchasing them in person – the waiting for the shipment to arrive draws out the excitement. If you know you are one of these people, ask your husband, wife, mother or roommate to keep the cards safe for you.

Talk to family and friends about your financial plan and ask for support. Ask your spouse to help plan the family budget and encourage them to be a part of this new planning system. The rewards are limitless and saving money can become just as addicting as compulsive shopping and the reward of a trip or a new house is always better then the new pair of shoes or the Louis Vuitton bag that is sitting in the store window.

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