Manisha’s MoneyZen Blog

5 Ways to Protect Yourself From Overspending

Photo credit: Louis Leray

Photo credit: Louis Leray

Creating a strong emergency fund is an essential step to basic financial security, yet many of us find it difficult to set aside a regular monthly amount for savings. As a financial advisor, I think one of the reasons this is such a challenge is due to the way our consumer culture is set up to encourage overspending.

How can you protect your money and ensure that you are consciously applying your resources to your future dreams and goals? The first step is to understand how we are psychologically vulnerable to mindless purchases.

According to Seattle Money Coach, Mikelann Valterra, http://www.seattlemoneycoach.com/, there are healthy ways to set boundaries on your spend. For instance, she points out that we should be careful in stores that are new to us. Dopamine is activated when we encounter something new and exciting. Our elevated brain chemistry makes it difficult to say “no.

Here are five strategies I have found helpful in making more conscious spending decisions.

1. Limit time spent shopping. The longer we are exposed to a retail space, the more vulnerable we are to purchasing something we don’t need or even want

2. Limit exposure to advertising.  If you receive catalogs you don’t want, call the 800 number and asked to be taken off the list so you are not tempted by things you didn’t intend to look for to begin with.

3. Wait a week before buying anything over $100 (if it’s a “want” rather than a “need”). Put the item on your mental back burner. After seven days, ask yourself if this is a passing interest or something that will really bring authentic joy into your life.  This practice of mindfulness can lead to greater fulfillment in your spending choices. You may be surprised at what you decide to buy versus pass up!

4.  Make a list of daily joys and small pleasures – and act on them. Perhaps it really is a morning latte or a special candle near your bath that bring you happiness. The point is not to deprive yourself, but to commit to finding joy in ways that do not add financial stress. The more small daily joys you have, the less likely you may be to splurge on something out of your budget that really doesn’t fulfill you.

 5. Make a list of your overspending triggers. Protect your peace of mind and your net worth by understanding the circumstances that make you vulnerable to overspending. Identifying your vulnerable spending points in advance can help you keep from repeating ingrained, unhealthy patterns.

In today’s consumer-driven society, it’s easy to fall in to the trap of using “shopping” to make us feel alive, valuable and satisfied. These five steps can help increase the odds that the money you ultimately do choose to spend truly supports your authentic joy.


Liked this post? Help me spread the word about economic empowerment!

Here are some easy ways to share these ideas with your friends on Twitter and/or Facebook: 

  • Trying to break the habit of overspending? Here are 5 tips from @ManishaThakor [http://bit.ly/ZJMeOn]
  • Protect yourself from the dangers of overspending with these ideas from @ManishaThakor [http://bit.ly/ZJMeOn]
  • Want to get your spending under control? Here are 5 suggestions from @ManishaThakor [http://bit.ly/ZJMeOn]

Comments

  1. Great list, Manisha. I’d also add removing yourself from email blasts from sites like LivingSocial and Groupon. I don’t know of a soul that hasn’t bought one of those “deals” and never used them. I’m guilty, too.

    It also pays to really understand what you value in life and then bump your spending against your values to see where you’re spending out of habit or social pressure. That’s worked well for me.

    Ree ~ I blog at EscapingDodge.com

  2. Agreed – it’s amazing how intense a desire to buy something – that you often didn’t even know existed – can be when confronted with these types of offers. And love your point about money & values. My favorite book on that topic is YOUR MONEY OR YOUR LIFE. Thanks for sharing, Ree!

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About Manisha’s Money Zen Blog

This blog chronicles my quest to identify simple, joyful methods that we can all use to feel calmer and more balanced in our relationship to our money.

Despite the abundance of personal finance books, magazines, radio programs and TV shows that have exploded into our lives over the past two decades, most of us struggle to find financial sanity, security and serenity. Rather than help us eliminate money pain, all this information has left us feeling overwhelmed and confused. We need fresh wisdom to break out of the cycle of despair and create lives of abundance.

Here’s hoping these short pieces will help you craft a uniquely rich and rewarding life.

To Your MoneyZen,
– Manisha