LET'S admit it – many of us women get immense pleasure from shopping. While we may relish the spoils from our retail therapy expeditions, it is important to consider the possible implications of excessive shopping on our finances.
It can be challenging to control spending when there are so many desires that vie for our attention. Retailers of clothing, personal care products and home goods encourage us to buy their latest offerings so that we can keep up with changing styles and trends.
We often find ways to justify spending on things that are outside of our budgets. We buy non-essential items that are on sale, because we believe that we are saving money. We may also look at splurging as a deserved reward for our hard work.
Is your spending out of control?
If you have lots of clothes and shoes that you have never even worn; if you have stored many household trinkets because there's no more space at home; and if you forgo saving and investing to shop, then your spending might be detrimental to your goals.
If you recognise that impulse shopping is a problem, you need to take drastic measures to prevent your habit from playing havoc with your finances. Here are some simple tips that can help you to regain control over your money:
Assess why you are overspending
First of all I would encourage you to have a quiet moment of self-reflection, and really analyze why you spend the way you do. Are there emotional or psychological triggers prompting the impulse. For example, Were you upset, or sad at the time. Is your spending due to the environment, for example did you decide to browse your favorite website or store and impulse buy? Or were you out with friends and succumbed to peer pressure? Whichever the motivation behind the action, try to cut it.
Leave money at home
If window shopping is a pleasurable pastime with your girlfriends, then prevent yourself from going over budget by leaving cash and cards at home. Just carry the basic minimum for food and transportation and don't persuade your friends to shop for you.
Don't surf online malls
With many products easily available with a click of a mouse, it can be even more challenging to avoid impulse shopping. Stay way from internet-based malls when you go online; put a note on your computer monitor or smart phone that will remind you to avoid these sites.
Redirect income to savings
Even if you still face the temptation to splurge, you can make it more difficult for you to actually spend any money. Transfer excess cash from easily accessible bank accounts, and place your money into dedicated savings or investment funds.
Remember your priorities
Try to substitute the pleasure you get from buying new things by focusing on your financial objectives instead. If you can get more satisfaction from knowing that you are putting money towards achieving your dreams, then you may eliminate the impulse to splurge forever.
Set short-term financial goals
This is a great way to stay motivated. Having these goals is a great way to stay on track with altering your spending habits. Setting a generic goal just isn't enough. You have to be able to measure the success of this strategy. For example, 'I'm going to spend less on entertainment and eating out.' Instead outline that each month, I will carry lunch to work every day, and instead of going to two movies, I will only go to one. This helps to keep yourself accountable to achieve your goals. Keep them simple, and place them somewhere where you can readily refer to them when you need to.
Plan a budget and stick to it
If you don't have a spending plan, then you definitely won't be able to stick to one! Learning how to budget takes time, effort, and the determination to stay the course no matter the temptation. Start by going through your total monthly income from all sources. Then tally your fixed expenses (car loan, mortgage, utilities). Then list your variable spending (entertainment, groceries for example) and assign an amount to each category. Just the process of tallying up how much you spend in each category can be a serious wake-up call! With time and patience it will help to focus your efforts, and lead to well thought out, intentional spending.
Nerisse Pottinger is a licensed Investment Advisor from Scotia Investments Jamaica Limited.