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Being poor and broke sucks. Sorry to say this, but it is all your fault. It is your own spending habits that are keeping you poor.
But rest assured, I’m not going to hit you like that and leave you high and dry.
By the time you’re done reading this, you will have the tools and motivation you need to stop your bad spending habits that keep you poor.
Have you seemingly had a lifelong problem with debt? Do you find it impossible to save money? If so, you just might have a spending problem!
If you can identify these bad habits, then you can work to change them and keep control of your spending problem.
So how do you know if you have a real issue with spending? Take a look at these 7 signs.
Read also: How to refinance your student loans
7 Signs You Have a Spending Problem
- 1. Addicted To Sales
You are enticed to purchase things when they are on sale, even if you don’t need them.
Purchasing items when they are on sale is good – but only if it’s something you regularly buy and need.
If you think you’re saving money by shopping during sales, then you just might have a spending problem.
- 2. Lured By No Money Down Deals
You are fooled by so-called deals that lure you in by saying, “no money down.” So you get what you want instantly without paying a dime for it.
You think you’re saving money, but in reality, you’re spending a lot more than you thought. These no money down deals make you sign a contract to make monthly payments with interest to boot.
- 3. You Overuse Credit Cards
You never have cash on you. You live on credit. You even put your monthly utilities on your credit card. Sure, you make your credit card payments on time, but you don’t pay off the entire balance.
Each month your balance seems to get bigger and bigger. Soon, you’ll be forced into making only the minimum monthly payments. At that rate, you’ll never get rid of your credit card debt.
- 4. You’re An Emotional Spender
Just like some people eat when they’re feeling down, you choose to go shopping and spend money to make you feel better. Then afterward, you regret your choices, yet you don’t return anything.
Channel your emotions into something more positive. Choose to work out or clean when you’re emotional rather than go shopping.
- 5. You’re An Impulsive Person
If something catches your eye, you buy it. You need that instant gratification that impulse purchases provide. Shopping is like a drug you’re addicted to.
Impulse purchases are almost always bad purchases. Take the time to research the product you’re interested in first to determine if you truly are getting the best deal.
If you want to buy something, sleep on it. If you still want it a day (or better yet, a week) later, then go ahead and buy it after doing some comparison shopping.
By taking the time to carefully consider your purchase, you might even be able to discover a coupon that can be used to secure a discount. For instance, if you are a Kohl’s shopper, Raise is a fantastic platform to check as they regularly feature the latest Kohl’s coupons on their website. Accordingly, if you would like to see all the latest coupons, you can visit the site before making your next purchase.
- 6. You Take Risks
You take dangerous financial risks. Instead of a fixed-rate loan, you go for a variable rate loan because the payments are temporarily lower. You look at today only, not tomorrow.
- 7. You’re Broke. Always.
You are constantly without money, yet your home is full of junk you’ve bought that you simply do not need. Houses look better when they’re empty rather than full of clutter. Less is more, as they say.
6 Warning Signs Of Emotional Spending
Whether you’ve had a stressful day at work or a fight with your significant other, stress can trigger spending that you wouldn’t otherwise do.
Emotional spending – sometimes known as retail therapy – is a dangerous habit that can land you in debt without delivering the good feelings you were counting on.
Here are 6 warning signs to look for so you can prevent an emotional spending spree.
- 1. You Say “I Deserve It” When Making A Purchase
Telling yourself that you deserve the shoes that are way out of your budget is a sign that you’re shopping to boost your own self-esteem.
Spending money on items you feel will make you more attractive is a habit that is rooted in your emotions.
Address your own self-esteem issues to prevent buying things to fulfill something you feel is lacking.
- 2. You Shop To Escape Financial Problems
If you’ve recently been on the receiving end of bad news regarding your finances, you may be tempted to go make a purchase.
However, if budgeting is hard for you, spending more than you planned can easily happen, which will make your financial situation even worse.
Avoid using credit cards in a fit of emotional spending, as this will certainly make your situation that much worse.
- 3. You’re Seeking Immediate Gratification
When you’re stressed out, you may feel anxious, restless, and even irritable. To combat these negative feelings, many people seek the immediate gratification that shopping can provide.
However, the relief is only temporary, and many people experience buyers’ remorse and a resulting low once the shopping spree is over.
Instead of making an emotional decision for instant gratification, think about the purchase and review your budget for a healthy dose of reality.
- 4. You’re Shopping Simply To Relieve Stress
Some people shop to relieve stress. Immersing yourself in the world of new clothes, kitchen gadgets, and mall sales is a good way to blow off steam and forget about life.
But if that type of self-help involves buying everything you see, you may need to steer clear of the mall when you’re stressed out.
Instead of shopping, try talking to a friend, hitting the gym, or relaxing in a hot bath.
- 5. You Keep Trying To Keep Up With The Joneses
Let’s face it; there will always be times when friends, family members, or co-workers have something better than you.
When buying or collecting things becomes a competition, it gets harder to keep a clear head when making purchases.
While it’s fine to want the best for your family, don’t fund that desire with credit card debt and emotional spending.
- 6. You Return More Items Than You Keep
Most casual shoppers return an item once in a while when it’s the wrong color, wrong size, or just didn’t suit the need you bought it for.?
However, an emotional shopper may find themselves returning lots of items all the time in an effort to minimize financial damage.
While you may save some of the financial ramifications of your shopping spree by returning things, you’ve still invested a lot of time and energy into the exercise that could have been spent doing something more worthwhile.
It’s also important to identify when you overspend – so you can stop yourself before you get to the point of no return.
4 Occasions You Tend To Overspend
Have you ever noticed that you can go a few days without spending a dime, then all of a sudden, you go on a crazy spending spree?
There are two main reasons why this happens. The first is practical – you probably overspent right after you got your paycheck. The second is psychological – you’re sad, tired, or just plain bored.
But there are other occasions we spend too much. If you can spot the times you tend to overspend; you can learn to avoid those situations altogether.
Here are 4 situations where people tend to overspend.
- 1. When You Get Home After Work
Retailers also know that we are weaker at certain times. A prime spot for weakness is at 8 o’clock at night. By 8 PM, people have come home from a long day at work and have eaten dinner. Around this time, you check your email, your Facebook, and yes, you may do some online shopping.
If you have had a particularly bad day at work, then you are in an emotional state that makes you vulnerable to overspending. Retailers know this and will schedule a sale to begin at this time. They’ll send you an email at this hour advertising a sale or showing you their new items.
If you have had a long day at work and feel the need to blow off some steam, do not go online shopping seeking to reward yourself. Instead, reward yourself in other ways. You can take a bath, play a video game, eat a tasty snack or just take a nap.
While online shopping may make you feel better temporarily, you won’t feel so good when you take a peek at the credit card bill the next month.
- 2. After An Unexpected Windfall
When you receive some unexpected good fortune (such as a bonus or a tax refund), you feel as if it’s extra money. Extra things can be discarded, so you feel like that money can be wasted. But this couldn’t be any further from the truth.
If you get a bonus from work, that’s not extra. You really did deserve that money for all the hard work you’ve done. When you get a tax refund, that is your own money you overpaid to the government.
If you find a $20 bill on the ground, consider it your lucky day. But there are better things to do with that money than to quickly go and spend it.
Instead of getting rid of this money by buying some new clothes you don’t need or going to an expensive restaurant, put the money to good use. Pay down an existing debt such as your credit card.
You shouldn’t be spending money foolishly when you still owe money. If you have no debt, then ask yourself if you have enough in your emergency savings account. If you don’t, then you know where that money needs to go.
- 3. When You’re Dating
When you’re in the market for a new partner, things can get pretty pricey. You tend to overspend to make yourself look better by getting your hair done professionally or buying more expensive clothing.
Then you overspend on your dates by trying to impress your partner – restaurants, amusement park visits, and pricey gifts.
There are low-cost ways to have a good time with your date. For example, a picnic, a homemade dinner, or you could play a game at the park.
And as far as impressing your partner with lavish gifts, that’s only going to make you seem desperate and needy.
- 4. When You’re Trying To Lose Weight
The weight loss industry is a multi-billion dollar industry. There are countless ways you can spend hundreds of dollars while trying to lose weight. You could buy costly exercise equipment, workout clothes, and a $500 yearly gym membership. Before you know it, you’ve given your wallet quite the workout. But you don’t need to spend a dime to lose weight. The bottom line is that if you want to lose weight, you need to eat healthily and exercise. You don’t need anything else. So eat your veggies, cut out the junk food and go out for a run or bike ride every day. That’s all there is to it.
5 Dirty Tricks Retailers Use
It’s not ALL your fault, though; retailers have been getting into our brains and triggering our impulses for years.
Retailers are always trying to seduce us into overspending at the grocery or department store. They have employed shopping experts to study the behavior of shoppers.
They then use this knowledge to trick us into spending more than what we intended to spend.
But if we can learn what their dirty tacts are, we won’t fall prey to them any longer.
Here are five crafty tactics retailers use to make us overspend.
- 1. Large Shopping Carts
When you enter a store, you’ll see shopping carts available; sometimes, they’re even offered to you. This is common in a grocery store, but it’s becoming more prevalent in department stores as well.
Studies show that it’s far more likely you’ll buy more when you use a cart. The same concept applies to overeating. When you use large plates, you are more likely to fill the plate up with more food.
To avoid being trapped by this trick, use a basket instead. The basket will look full, and you won’t add unnecessary items. Not only that, but the basket will become heavy, and you’ll want to leave sooner.
- 2. Larger Sizes
Some retailers are changing the sizes of their clothing. For example, a large is now a medium, and the XL is now large. They are playing on your emotions.
If you are usually a large and you try on a medium, and it fits, you are more likely to buy it. This ploy works because most people would be thrilled if they fit into a smaller size.
To avoid falling into this trap, realize what the retailer is doing. They are employing a neuromarketing trick on you in order to manipulate you.
This should actually offend you. Hopefully, offend you enough not to buy it.
- 3. Mirror Tricks
Funhouse mirrors aren’t only found in the carnival. They are also found in countless dressing rooms. There are two mirror manipulations that are done.
The first is a trick to make you look thinner. If you see yourself looking thin while trying something on, you will think the item of clothing is what’s doing the trick. But in reality, it’s just the mirror.
The other trick is a lighting trick. Some retailers will tint their mirrors a bit, making you look tanner and thus healthier. Others use strategically placed lights to give you a fresher, more appealing appearance.
- 4. Free Food Samples
Nothing is ever free – even free samples. When you are given a free food sample, various things are triggered in your brain.
First of all, there is the personal factor involved. Someone has just given you something which makes you feel like you should give them something back. This plays on your emotions.
The second thing that happens is that you trigger your stomach into thinking it’s dinner time. When you’re hungry, you are far more likely to overspend on food.
To counteract this, simply eat before shopping and say no thank you to free samples.
- 5. Discount For Applying For A Store Credit Card
When checking out, you are oftentimes asked if you would like to receive a discount on everything you’re buying.
All you have to do is sign up for their store credit card. It’s free after all, and you’ll be approved instantly. But the harm you’ll do to your wallet is far more costly than the measly 15% off you’re getting. With this credit card, the store will know what you buy so they can tailor advertisements to mail/email you – creepy. By adding another credit card, you could also be hurting your credit score, as a hard credit check is done. The main reason retailers offer credit cards is because they know you are more likely to buy more when you have one. These credit cards also carry a very high-interest rate and have no rewards program.
5 Tips To Help Curb Unnecessary Online Shopping
Are you addicted to online shopping? With the ability to browse and buy products from the comfort of your couch and then receive a package right at your front door, it’s hard not to get hooked.
And with constant access to the Internet through smartphones, addiction follows us everywhere.
That’s why it’s important to get online shopping under control. These are a few tips to help you limit the amount of time and money you spend shopping online.
- 1. Delete Shopping Applications
Practically every store and shopping website has a mobile application available for download. It makes shopping from virtually anywhere a possibility.
Waiting in the doctor’s office? Take out your phone and browse a few catalogs. On the bus? See what deals you can find today.
By deleting these applications from your phone, it will help you resist the urge to shop online when you’re bored.
It’s a lot more hassle to open a web browser and try to shop online without the mobile-friendly version of the website.
- 2. Unsubscribe From Emails
Do you wake up every morning with ten emails from different stores and websites telling you about their sales? This puts the product right in front of you and shows you the great deal you can get in a place you can’t avoid — your mailbox.
More than 92% of online shoppers say that images are critical to their purchasing decision. With emails, the pictures are delivered right to you every day. You don’t even have to go looking for them!
You usually get subscribed to these emails after making a purchase at the stores, but there is a way to unsubscribe! Unsubscribing will stop you from seeing what you could be buying every single day.
Without a daily reminder to shop, it will be easier to stop.
- 3. Don’t Store Credit Card Information
When you check out at an online store, they usually offer you the option of saving your credit card information to make future purchases easier.
This sounds enticing, but it is actually not only dangerous, but it also feeds your addiction to online shopping!
When you go to make a purchase, and you have to enter your credit card information, it forces you to stand up and get your credit card instead of just clicking a button.
This gives you a little bit of time to process that you’re spending actual money and might help you avoid those unnecessary purchases.
- 4. Use Applications To Stop You From Shopping
There are many applications out there that limit what websites you can go to or how much time you can spend on specific sites.
Using one of these applications to track your use of online shopping sites can help you understand when and why your online shop so you can better stop it.
StayFocusd is a Google Chrome extension that limits the amount of time you can spend on certain websites. With this tool, you can set reasonable time limits on the sites you like to browse and the ones you spend the most time on.
- 5. Commit To A Three-Day Rule
Next time you want to buy something, try putting it on a wish list or saving the page before buying it. Commit to waiting three days before purchasing. This gives you time to think about the purchase and decide whether or not it’s worth the money.
Giving yourself a waiting period helps you ask the right questions and make more rational decisions. That’s why stores throw “Today Only!” sales all the time. It stops you from having that waiting period and forces you to make a quick decision. Challenge yourself to stay away from impulse purchases.
That’s all it takes! With just these five tips, you can be well on your way to a spree-free digital life.
Simple ways to demolish bad spending habits
If you are constantly swimming against a tide of debt and your bank balance looks decidedly skinny, it’s time to change your spending habits into saving habits.
Here are some tips on how to change your ways for the better and get your debt payments into shape.
- ?Put yourself first
This is a secret of the wealthy that many do not realize. While the poor and middle class pay out taxes and bills first, this mental mindset keeps you stuck.
However, this does not mean go party and ignore the electric bill.
Rather, it means that you should schedule your own retirement and related payments to come out of your check before anything else. This will motivate you to make more money to cover everything else.
- ?Know your long-term goals
If you are living week-to-week, you are in a constant cycle of stress. Figure out what you want in the long run and break your goals down into meaningful, doable steps.
- ?Always research big-ticket purchases
Large kitchen appliances, vehicles, and electronics are some of the most expensive items you are likely to purchase.
Rather than impulse purchases, you should research the best time of year, manufacturer, and other related data so that you can make an informed purchase. Often, the best time is just prior to the new model launch.
- Speak with a financial planner
If you are not sure how to fix your financial portfolio, going over it with a professional can help.
- ?Record your current spending habits
Write down everything that you spend for a month, including a coffee shop and internet purchases and all of those purchases you love making on Groupon.
- ?Cut unnecessary expenses
Go over that list and figure out where you can cut expenses easily. For instance, if you buy coffee at the local shop each morning, start making your own Tuesday through Friday.
- ?Give yourself spending limits
From your weekly food budget, including eating at restaurants and takeout to your clothing purchases, write down a clear dollar limit. For instance, limit yourself to $50 per month on clothes.
- ?Stay clear of triggers
If you have difficulty controlling your spending in certain locations, avoid those retail outlets.
- ?Make yourself accountable
Ask a friend, sibling, or other trusted person to be your accountability partner. In some cases, simply having to admit breaking the rules is sufficient to keep people from spending too much.
- ?Avoid distracted shopping
When you are waiting at the doctor’s office, grocery store, or other places, do not spend money online.
Whether the commercial break during your favorite show or lunch break at work, making mindless purchases is incredibly easy with your smartphone.
Give yourself guidelines to prevent this from happening!
- Stick To Cash
It’s a tried and true method, but it works for a reason.
It’s way too easy to overspend if you’re using credit cards, so leave them at home and take a fixed amount of cash with you when you go shopping or use your debit card.
That way, you will be able to stick to your pre-set budget.
- Make A Shopping List
Don’t wander aimlessly around the store, picking up things at random. Shop with a list. That way, you can plan your meals for the week ahead and only buy the items you need.
This saves you money and eliminates waste. If you are tempted by something that’s not on your list, add it to next week’s list.
- Shop Without A Shopping Cart
Shopping carts are quite large, which encourages you to keep shopping, so you put more into them. Don’t fall into this trap.
Next time you go to the store, grab a basket instead of a cart or simply carry your items. This will help you curb your temptation to buy items you don’t really need.
- Set Realistic Long-Term Goals
Think of something that you would really like, such as an overseas vacation or saving money to settle your debts. Start saving for it today.
Instead of blowing money at the coffee shop or the bar, put those dollars in a savings account toward your big treat.
Before long, you’ll be sitting flying off to foreign climes or paying off all your credit card debt.
- Let Someone Else Do The Shopping
If you’re finding it really tough to break your spending habit, let someone else shop for you. All you have to do is give your shopping list to another immediate family member and let them handle it.
If you’re not in the store, you won’t be tempted to impulse buy things that you don’t really need.
- Treat Yourself
Budget yourself an allowance so at the end of the week you can treat yourself. This will encourage you to save. It will also prevent you from depriving yourself of too much.
If you don’t treat yourself from time to time, you are more likely to have a spending splurge.
- Sleep On It
Before you rush out to buy the latest gadget or the newest fashion wear, give yourself a cooling-off period. This will give you time to consider whether you really need that big-ticket item.
If you still feel you want it after 24 hours, go back to the store and get it.
You can break bad spending habits if you’re determined and really consistent. The main things to remember are to track your spending, stop impulse or emotional buying and keep saving on a regular basis, no matter how small an amount it is.
I hope this helps you quit spending money on useless junk because being broke sucks, and having money does not.