1. Money

The Urge to Splurge

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Do You Indulge in Impulse Spending or Over Spending?

Does your spouse or partner complain that you're spending too much money? When your credit card bill arrives, are you surprised to you find that you charged more during the month than you thought? Does your closet contain lots of shoes or clothes that you almost never wear? Do you own every gadget known to man (or woman)? Do you come home from the mall with items you had no intention of buying? Do you spend money on things that you didn't realize you needed until you saw them on display in the store?

If you answered yes to one or more of these questions, you probably suffer from impulse spending. When people are unable to save money for the things that are really important to them, like a house, a new car, a vacation, or retirement, impulse spending is often the culprit.

If you don't have specific financial goals, it's more difficult to resist spending money on items that don't really have any meaning to you. Once you're already saving regularly towards your most important financial goals, you may want to have a fund to use specifically for occasionally spending money on unplanned items. Then you can indulge in occasional impulse spending without jeopardizing your financial future.

Impulse spending, or recreational shopping, can put a strain on both your finances and your relationships. To overcome the urge to spend money, learn to recognize your needs from your wants. We're constantly bombarded with messages from advertisers who appeal to our psychological needs to tempt us into spending money on things we want but may not need. Allow a cooling-off period before spending money on anything you haven't planned for in advance.

One method of controlling your spending that works well is to carry an index card in your wallet. When you see something you want to buy, write it on the card. Force yourself to wait two weeks (or any other period of time you set for yourself, but at least a week) before spending the money on this item. During this cooling off period, if you see something else you want, add it to the card. However, you can never have more than three items on the card at any one time, so to add a fourth item, you have to remove one of the other items from the list. If you're an impulse spender, you'll find that you're frequently crossing items off to make room for the newest "must have" thing.

Another good rule to adopt is to pay cash whenever possible. When you go shopping, leave your credit cards at home. Most impulse spenders use credit cards more often than not. When you use credit cards, the reality of the amount of money you're spending and how you're going to come up with that money, is suppressed. When you pay with cash, it feels like you're spending "real" money.

Learn to recognize wants from needs, and practice controlling your impulses to spend your money on things you don't really need, and you'll be able to change your spending habits and end up far ahead financially.

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