We dare you to create a budget and live within it—no deviations allowed—for a week, a month, a year, however long you can.
Sticking to a spending plan can seem to go against human nature. Necessities are necessities; the rent has to be paid. But for the rest of your budgeted money, the heart wants what it wants, and as we all know, what it wants is to splurge impulsively and emotionally on nonessential items like a sweet-smelling midmorning muffin or a shiny new car when your old one does just fine.
But every dollar you spend on something expensive or ephemeral is a dollar you don't have for your longer-term, more meaningful goals. So here are seven strategies to help you say no to nonessentials and yes to saving money.
Create a Budget and Make It Realistic
What is a budget, anyway? You might think it’s equal to the amount you spend and save, divided up into easy-to-track categories, but it’s a little more nuanced than that.
For starters, in a successful budget, one we’d call “zeroed out,” the amount you spend and save should add up to the money you have coming in—that is, what you earn after taxes. Your budget should not be determined by how much you are spending alone, especially if you are consistently financing expenses with debt. Rework your budget to make sure your plan accounts for saving some money—it will help you to stay on budget for longer.
Cut Out the Impulse Spending
Life is about making choices, and a budget informs those choices. You could game the system when you create your budget and leave a too-generous amount for random unplanned and nonessential impulse purchases like a candy bar or magazine near checkout. But even if you set a more reasonable limit for these, you will still be tempted from time to time.
Here’s an idea: Write down how you spend money—either in a notepad or on your smartphone notes. This will allow you to see your soft spots—the shopping categories in which you consistently and egregiously overspend—and to rein in such spending. You do need to treat yourself sometimes, of course, but if you feel you are about to cross a line and mislabel a luxury as a necessity, no matter how tiny the item, resist the urge to buy it.
Cool Off Before Buying Nonessentials
The roof over your head, food on your table and gas in your car—what do they have in common? They’re necessities, and they’re also prominent line items in a typical household budget that together tally, let’s say, 50% of your total spending. The other half of your budget would be split between savings and the things you really want but don’t really need—the nonessentials.
You know what those items are because you often buy them when the moon is out and a screen’s glow lights your room or whatever time when your self-control is at its weakest. Do yourself a favor, and, before you tap the “Checkout” button, sleep on it. The item in question will probably still be there in the morning, and you may have a different perspective on your potential purchase.
What Are Friends For?
There are many ways to define a friend, and one of them is someone who will stop you from causing yourself any harm. But they can only help if they know you are about to do something you might regret.
So before you plunk down big-time cash, or worse, go deep into debt to buy something expensive, ask someone you trust completely (your significant other, your parents, siblings or a close friend) whether they think the purchase is a good idea. They may green-light you, but they may also help you to see why your purchase isn’t necessary. As to what constitutes “expensive,” only you know that for sure. Pick a dollar amount when you create your budget, and don’t waver from it.
Know Thyself
Why aren’t you sticking to your budget? Yes, you saw a nonessential item you wanted and didn’t really have room for, and you bought it anyway. But giving in too easily is just the symptom; what’s the cause? Psychologists cite any number of reasons; here are five to consider:
● Present bias. You want something magical now so badly you forget about your long-term goals. Worse, you use credit you can’t afford to delay the pain of paying for it.
● Retail therapy. Feeling down and there’s a hole in your sneakers? A new pair will make you feel pretty spry.
● Shopping addiction. It’s a real thing—an impulse control disorder found among compulsive buyers.
● Anchoring. When you see something is discounted at the store, you focus more on the discount than on the price it was discounted from, leading you to emphasize the “savings” in the purchase more than the spending itself.
● Social facilitation. Participating in an auction, for example, can be a thrill. Your heart races and the adrenaline pumps as the bidding gets higher and higher. So much so that you can forget what you considered the value of the item was to you in the first place.
The good news is, once you know what you are susceptible to, you can walk away before the trigger wreaks havoc—and stick to your budget.
Keep Your Eyes on the Real Prize
Every time you walk away from a nonessential purchase, you can choose to focus unhappily on what you don’t have or happily on what you do—saved money. Saving is the only way you’ll be able to afford the kinds of things that take years to afford.
Leaving a luxury item on the showroom floor means that you’ll be one step closer to the biggest-ticket items—a car, a down payment for a home, a destination wedding, your kids’ college tuition, early retirement—without incurring debt that could hold you back for years.
Your Beautiful Reward
We all need incentives to modify our behavior. So go ahead, make your day. But before you book a table at that steak house, perhaps a trip to the butcher and a few minutes in front of the grill makes more sense overall. Same T-bone, but one comes with a partial down payment on a long-term goal; the other a sweet memory, perhaps, but here today, gone tomorrow.
Andy Sobel is a freelance writer and editor. He has held senior editing positions in The Wall Street Journal’s New York and Brussels newsrooms and was managing editor of American Banker. A graduate of the University of Missouri and Union College, he now lives in Nashville, TN.