Top Tips to Help the Average Individual Save Money and Avoid Impulse Spending

I love to reward myself with little treats. A lot. Have a bad day at work? Little treat. Have a great day at work? Little treat. Took out the garbage or did the dishes? Little treat.

These small rewards don't seem like much when they don't cost a lot. For me, this is often a $3 Redull from the gas station across the street or a latte from a local coffee shop. However, $3 x 5 times a week adds up to $780/year. Now, don't get it twisted... this is not a post created by a Boomer who preaches that lattes and Avacodo toast are the reason that Millenials and Gen Z can't buy houses (blame the economy - this is not an "us" issue). That $780 barely makes a dent in a downpayment and regardless, you deserve to enjoy the little things in life. My point is that if something so small and seemingly harmless adds up to that amount, how much are you really spending on impulse buying or harmless spending? I guarantee it's a lot more than you think.

I've struggled with this myself since I left the nest. Growing up on a tight budget, there often wasn't much left over for those little things to enjoy. We went out to eat exactly twice per month on payday, and getting fast food after a busy day felt like we were living like kings. Now that I'm an adult, I appreciate and am thankful for the fact that I grew up on home-cooked meals, which is a different kind of privilege that many don't experience on a regular basis. However, once I had my own money to spend.... it was Treat City.

I've consistently worked hard to hone back on mindless spending to reach my ultimate goal: being debt-free (at least close to it) and feeling secure in my financial position. I find myself slipping up here and there, but it's a work in progress as is life. Here are a few strategies that I've found helpful, and I hope that you do as well.

Track Your Expenses

This should be the first and foremost of any financial journey. And let me tell you.... your feelings will be hurt. Carve out time in your day or weekend and go through your bank statements, credit card statements, and cash transactions (if you keep receipts), and either print them out and circle non-essential spending or put them all in a spreadsheet. I was a fellow "doesn't count if you put it on the credit card" spender until VERY recently, but it very much counts. Arguably more so than debit or cash purchases. Add it all up and assess how much non-essential spending you do in a month (impulse online purchases, new clothes, random gas station snacks or drinks, concert tickets, vacations, etc.). It may be helpful to further break this up into categories - totally nonessential and unplanned essential. For example, you stayed late at work and didn't bring any food with you because you assumed you'd be home by mealtime. This is an unplanned necessity, unlike if your friend calls with a killer cruise deal that you just HAVE to jump on.

Avoid Impulse Purchases

Once you take a deep dive into your monthly expenses, this will be easier to accomplish. Of course, you deserve to live a little and have the things that bring you joy. The important thing here is balance and choosing what’s most important. For example, you figured out that you spend $25 on coffee, $50 on takeout, and $40 on online shopping per week. What’s the most important to you? If it’s the coffee for that daily pick-me-up, compromise by ditching the online shopping. (I use food a lot as examples because this is my weakness. Feel free to substitute examples in your head with whatever your struggle might be.)

If online shopping is your weakness, a helpful strategy is to wait 24 hours before you hit that “confirm purchase” button. Oftentimes, the excitement and thrill of finding something cool is what drives you. If you wait 24 hours, it’s likely that you’ll realize that you just really don’t need it, like it, want it, etc. But on the flip side, if you do still want or need it, by all means! This is now a calculated and thought-out decision, not an impulse.

Grocery Shop with a List

This is a big one. Always make a list before you do your shopping, and avoid shopping while hungry. This stands for both shopping in the store and grocery pick up or delivery. Take a look in your fridge and pantry, make a list of needs/wants, and stick to it. This will keep you focused on what you need and prevent you from making unnecessary purchases.

In my household of two, I do all of the shopping via grocery pickup and our bill averages about $150/week. I decide on 4-5 meals that we want to make for that week and make a list on what I need to make those meals plus any snacks that we want. This has helped me keep our grocery bill consistent. However, the few times that I’ve gone to the grocery store to do my shopping in the past few months, our grocery bill jumped $200-$250. This was mainly due to grabbing things as I passed by because they looked good, and partially due to not having a solid list. Case in point that this can be a killer.

Comparison Shop

Going back to impulse spending for a hot sec. If you’ve waited 24 hours before making that impulse buy, take a few minutes to compare prices and look for the best deals. There’s almost always another retailer who sells it cheaper, and it’s worth the few extra minutes. Additionally, if you have certain credit cards with Chase or Capital One, they often have deals or offer cash back to shop at specific retailers. Some are upwards of 10-15% cash back, which is a great deal to jump on (as long as you can pay it back by your due date!) Thanks to the internet, it's easier than ever to research and compare prices from different retailers.

Set Savings Goals

This can be a very helpful strategy to cut back on the impulse spending. Having a specific savings goal can provide the needed motivation to keep money in your pocket for something that’s important to you. This doesn’t always have to be something big, like a vacation or a new home. This can be a small weekend trip, a new pair of shoes, or that new gaming console you’ve had your eye on. Having a clear goal in mind will help you stay focused and resist the temptation to splurge on unnecessary things. To make this more achievable, you can break down your goal into smaller, more achievable milestones - $50, $100, $200, and so on. This will give you the satisfaction of hitting a milestone, and motivate you to keep going.

Automate Your Savings

Using automation tools can be a life (and credit) saver. If you struggle with manually hitting that transfer button, automate it! Set a recurring transfer to send a set amount to your savings account every payday. Again, we’re not shooting for the stars right away - start small. It can even be as little as $5. Starting somewhere is better than not starting at all.

If you have USAA, they have an automatic saving program that transfers funds from your checking to your savings account but only if you have $100 or more available in your checking account, and it never exceeds $7 per transaction. I’ve had mine set up for a few years and it averages about $50-$80 saved per month. This is a mindless way to help build a small nest egg or rainy day fund. Check with your bank to see what programs are available to help automate!

Avoid Temptation

Does is physically pain you to pass up a sale or a deal? Are you like me who will spend an extra $20 just to save $5 on shipping (aka spending an additional $15 to pretend that I’m getting a deal)? UNSUBSCRIBE to those marketing emails. I know, they have so If you find yourself constantly tempted by sales, promotions, or the latest gadgets, it's important to remove yourself from those situations. Unsubscribe from marketing emails, avoid window shopping, and limit your exposure to advertisements. Surround yourself with like-minded individuals who prioritize saving money, and you'll find it easier to resist the urge to splurge.

Reward Yourself

I’ve said it several times throughout this post, but cutting back and building better habits does not mean that you need to deprive yourself of things that bring you joy. It’s important to reward yourself on occasion for your hard work and dedication, and there tends to be a deeper level of satisfaction when you let the anticipation build. Treat yourself and feel good about it!

My parting words to you is this: GIVE YOURSELF GRACE. Changing spending habits and starting a new financial journey is not easy, and I guarantee there’ll be slip ups. But that’s just part of the process and no one is perfect, so allow yourself to learn, fail, start over, and succeed.