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5 ways to curb impulse spending

Welcome to our new series, Personal Financial Friday!

Each week, as you head into the weekend, the SMI Visitor's Weblog will serve up several practical ideas on making the most of what the Lord has entrusted to you. And every so often, we'll call on of our favorite personal finance (PF) bloggers to present a guest post.

In fact, we launch our series today with a post from one of the best in the PF blogopshere, Bob Lotich of ChristianPF — a personal finance blog "dedicated to helping Christians become better stewards of what God has provided." Take it away, Bob!

When the economy is good and jobs are secure, impulse buying is a feel-good luxury that reminds you of your success. But when credit-card debt starts to mount, the economy gets wobbly, and your next paycheck is less certain, impulse buying becomes a dangerous addiction that can lead to a precarious financial situation.

There's a simple beauty to be had from fun that comes for free. Recently, a friend who's been unemployed for the better part of a year told me he'd taken his wife for a walk by the riverside park in his city. Although they spent no money, it was the best fun the two of them had enjoyed in some time.

My friend used to be a big spender with a good paying job who tried to prove his love to his wife and family by giving them a big house with all the latest toys. Now, in a very different situation, he's discovered he must stop his impulse buying or perish.

How can you curb impulse buying? Here are five tips to get you started.

1. Avoid places that cause you to spend.

If one of your favorite pastimes is browsing Amazon.com and you know you can't afford the latest version of the Kindle, don't go there. Don't go to your favorite clothing stores, bookstores, online retail sites, and coffee shops.

You may tell yourself you won't get the $4.50 latte and just stick to the $1.75 drip coffee instead, or that you'll maintain the resolve not to click the “Add to cart” button, but why torture yourself with the temptation? If you don't go there, you can't buy it.

2. Have a yard sale.

What does cleaning out your closet, your garage, your attic, and your basement have to do with impulse spending? Consider what almost every person who has ever had a yard sale has realized: you have a lot of stuff that you bought but never use.

Just the process of sorting through the clothes you bought on a whim and only wore once, or the kitchen gadget you never take out of cabinet, teaches you a valuable lesson about impulse spending. Much of what we buy, we don't really need. Those things rarely make us happier, and even they do, it's often a short-lived thrill. Selling your unused impulse purchases in a yard sale puts cash back in your pocket, while freeing you from the burden of stuff weighing down your attic and your conscience.

3. Write down what you want.

Instead of buying an impulse item right away, write it down on a Santa-style list of wants. Put that list somewhere you can see it, somewhere you can add to it any time. Instead of making the purchase, leave the list alone for a period of time — at least a month. Give yourself permission to buy anything on the list after that period of time.

Something interesting is likely to happen. When you come back to the list after a month or so, you may laugh at some of the things you thought you "ABSOLUTELY HAD TO HAVE." It's quite possible that you'll no longer feel the need to purchase most of those things, and you'll wonder why you were so excited about them in the first place.

4. Save up.

Do you remember saving your allowance for a big purchase when you were a kid? It was fun to watch the change or the dollar bills in your piggy bank grow as you worked hard to put a little bit of your allowance aside each week or month.

Why stop saving as an adult? Instead of buying an item on impulse, open a savings account and set aside a little bit of money each week or month until you've saved enough to get the item. This method of purchasing allows you to enjoy those "want not need" items, but without the budget-destroying guilt trip.

5. The best things in life are free.

When it comes right down to it, happiness is a state of mind, not a new pair of shoes. As my friend discovered, our greatest enjoyments in life don't come from our credit cards anyway. Despite what marketing geniuses try to convince us of in commercials and advertisements, "more stuff" and "more food" are not the keys to happiness. Impulse buying won't solve relationship problems or improve self-esteem or make us more attractive.

The best way to cure impulse buying is to ask yourself what lies beneath your compulsion to spend. You might find that what you're really looking for is far less tangible than a new gadget.

Indeed, like my friend, you might discover that the best things in life really are free.

Thanks, Bob!

Next Friday: A smart phone app that could save you money — if you use it wisely. Have a great weekend (and don't forget to check out the new October issue of the Sound Mind Investing newsletter)!

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