This time of year in many parts of the world, what we call "the holidays" are observed: Hanukkah, Kwanzaa, Christmas, and others. Gift giving may be one of the traditions of these holidays.
Spending oneself into a financial hole need not be one of your traditions. Here are four tips on limiting spur-of-the-moment buying that you may find useful now and throughout the year.
- Don’t use credit cards unless you have to (e.g., shopping online). Seeing cash go from your wallet to the cashier is a powerful motivator to spend less.
- Try “envelope budgeting.” After the month’s fixed expenses are taken care of, take out the remaining available money in cash. Divide it among envelopes labeled with the categories “food,” “entertainment,” “lunches and lattes,” and whatever else is not a fixed expense. Once the money in the envelope is gone, you can’t buy any more in that category until next month.
- Put yourself on a weekly allowance. Once you’ve spent it, no more impulse buying until you get your next allowance.
- Tally your regrets. Look at your credit card and bank statements for the last few months. Are there things you now regret buying? Write them down and post the list by your computer or on your cell phone, to help you think twice about the next purchase you want to make.
Here is one additional tip for you. To avoid temptation, plan your holiday shopping; don't leave it to the last minute. By controlling your impulsive purchases you can go into the new year free of buyer's remorse!