There’s nothing wrong with treating yourself with a little retail therapy every once in a while, but if your spending is putting you into debt or wiping out your emergency fund, it’s probably time to reel it in. That’s easier said than done for habitual overspenders and those who aren’t great with impulse control. But financial psychologist Alex Melkumian says there are some easy ways to fool yourself into being good with money.
These mental “tricks” from financial experts can help you spend less:
- Delete your credit card info from your payment method – De-link your card from your phone and laptop so there’s one extra step you have to take when buying something online.
- Make a “mandatory splurging” budget line item – Melkumian has his clients create budgets and label line items in nontraditional ways. Instead of calling it “discretionary spending” or “fun spending,” he has them label it “mandatory splurging.” He explains, “Language plays a huge part in how we perceive things.” So changing the name can slowly change the behavior and he’s noticed clients start off easily spending this “mandatory splurge” money, but after a few months, many struggle to find a use for it.
- Don’t use the words “needs” or “wants” – Another way language influences how we perceive things is that some words have negative connotations. That’s why financial behavioral specialist Saundra Davisadvises against using the words “wants” and “needs.” Instead, she suggests we “recognize there is a difference between a living expense and a lifestyle expense.” Think of your “want” as a lifestyle expense, knowing it can improve your life, like a dinner out, but you don’t absolutely need it, like groceries.
- Think what you’re saying “no” to by saying “yes” to a purchase – While you’re adding items to your cart, consider what you’re giving up by buying something. It’s all about trade-offs, so if you buy that $200 purse, laying out what you’d be sacrificing to get it may help shift your perspective on the purchase.