I sometimes find my eyes and mind wandering as I roam the aisles in the grocery store and the mall. With so many shopping choices today, it is often too easy to dig a little deeper in our wallets and purses to get something we consider a “must have”. While there is nothing wrong with treating ourselves (if it is built into a spending plan) trouble may arise when the extras get out of hand. Use the following tips to help keep your expenses, and goals, on track:
1. Create an exact monthly budget. This may sound tedious and time consuming; but to really know how much you are spending, and more importantly, how much you CAN spend a budget is a necessity. You can use something as simple as a spreadsheet (Excel) or as detailed as a comprehensive software package; just as long as you know where your money goes each month.
2. Make lists. Knowing ahead of time what you are going to buy allows you to plan, with relative certainty, how much you will spend. Sticking to your list will also keep you focused, so that you don’t spend as much time meandering through stores. Extra time is something we could all probably enjoy!
3. Avoid impulse purchases. If you spot something you must have that is not on the aforementioned “list”, give yourself time to contemplate whether you really need the item - this also goes for online shopping. Before making the extra purchase, wait a week. Most of the time, this cooling off period eliminates the urge to buy.
4. Leave the cards at home. If you use cash to make purchases, you have a running total of how much money is available. Once you run out, you’re done shopping. Having access to a debit card can create the issue of not knowing exactly how much money is available; and using a credit card can cost you more in the long run.
By: Ross G. Allen, CFP ®