6 Ways to Improve Your Spending Habits

Do you sometimes feel like you’re spending too much money? According to a survey from Mint, one-third of Americans wish they had made fewer purchases than they did in the preceding month. 

While you can’t avoid some expenses, you can certainly become more systematic about how you make them. Here are six helpful ways to improve your spending habits and get the things you want for less.

1. Ask Yourself: Why Do I Want This?

The next time you find yourself at a store or browsing for things online, pause for a second and consider what you’re doing. Are you shopping because there’s something you need, or are you:

  • Bored and just trying to entertain yourself? During the first few months of COVID, it was reported that as many as 43 percent of Americans participated in comfort buying as a way to give themselves something to do.
  • Depressed or upset about something else? According to the Cleveland Clinic, retail therapy is often used as a coping mechanism to give us a sense of control. The euphoria of shopping can make you feel happy again and distract you from the things that cause you anxiety.
  • Only interested in buying something because someone else you know already has it? This is a common phenomenon known as “keeping up with the Joneses”

Unless you have a true purpose for shopping, then it would be more beneficial to find something more constructive to do with your time. For instance, could you instead read a book, learn a new hobby, or visit with a friend or family member?

2. Are You Really Going to Enjoy Your Purchase?

Oftentimes, we’re really good at convincing ourselves that we absolutely have to have something when we want it. But according to author Vicki Robin, before you make that purchase, you need to be honest with yourself in determining how much fulfillment it will bring in your life.

In her book “Your Money or Your Life” co-authored with Joe Dominguez, they write, “Waste lies not in the number of possessions but in the failure to enjoy them.” In other words, having ten pairs of shoes is useless unless you actually take the time to wear them and get the joy out of them that you were hoping to experience. Therefore, unless you plan to truly use the thing you want, exercise some restraint and don’t make the purchase.

3. Can You Get It Cheaper Somewhere Else?

If you do end up deciding to buy something, your next goal should be to get exactly what you want for as little as possible. To do this, you’re going to need to spend a little time shopping around.

To give you an example, let’s say you’re at a store looking at a new laptop. Before you decide on the one you want, you remember that consumer electronics can be found all over the Internet at dozens of reputable retailers. Therefore, it certainly wouldn’t hurt to get on your smartphone and do a quick search to see if Amazon or some other online store is selling it for less.

This step doesn’t just apply to material items. It can also be used for services you need to have done as well. 

For example, let’s say you’d like to have your house painted. You could give the job to the first person who quotes the job, but that probably wouldn’t be in your best interest. Instead, invite at least three different contractors and see which one has the best price. You might be surprised to find out one of them is willing to do everything you ask but at a significantly lower price than the other two.

4. Is There a Promo or Discount You Could Take Advantage Of?

Another benefit of researching prices online before you commit to buying something is that you’ll often find discounts or coupon codes that can add up to significant savings. According to a report from the site CouponFollow, the average American could save as much as $1,465 per year if they’d use coupon codes or a shopping app to save them money.

For example, one time when I was buying some furniture, I decided to check online before flagging down a sales rep. I signed up for their in-store rewards program and promptly received a coupon worth 15 percent off my purchase. That one action ended up saving me over $100. Not too bad!

5. Could You Negotiate a Better Price?

Just because the sticker on the item says a price, that doesn’t mean that’s necessarily what you have to pay. If you’re brave enough to ask for a better deal, you’d be surprised at how much it can pay off.

According to Consumer Reports, in-store shoppers who were willing to do a little haggling were able to get the price reduced by as much as 59 percent. However, only 14 percent of shoppers were willing to actually approach a sales representative and initiate the negotiation.

The worst thing a store or contractor can tell you is “no” and then you’re stuck with the price they originally gave you. But the best thing that can happen is that you get a discount. With that in mind, you’ve got nothing to lose. Integrate asking for a price match or better deal as part of your normal shopping process.

6. What Does This Do to Your Budget?

Spending isn’t something you do one time. It’s a cyclical process that you’ll repeat from the time you spend your first dollar to the day you die. That’s why you need to use every purchase as an opportunity to refine your spending habits.

A great way to do this is to get into the habit of tracking your expenses. From that same survey we mentioned earlier by Mint, it was also reported 65 percent of Americans said they have no idea how much they spent last month. This is unfortunate because if you don’t know how much money is going out, then you’ll have no way to measure if your finances are okay or if you’re heading into debt.

A simple way to keep track of your purchases is to use a budgeting app like Buxfer. Buxfer automatically imports all of your transactions from your bank and credit card accounts and effortlessly syncs them into one convenient dashboard. You can use it to see the app to see where you stand, how much you’ve spent in each category, and if there’s any room for improvements.

Click here to learn more about how Buxfer can help your budget.

Image credit: Pexels

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