Avoiding SpendingSee also: Long-Term Financial Planning
Our page on Spending Less Money describes a process to help you plan how you might reduce your spending. It explains how you can identify areas of spending that are not absolutely essential, and then plan to reduce your spending on those areas.
However, with the best will in world, the “best laid schemes o’ mice an’ men gang aft agley”, as Robert Burns put it. This page describes some practical steps that you can take to limit your spending. These may be especially helpful if you are struggling to keep to your plans because of impulse buying, or if you are the kind of person who prefers to have concrete steps in place to help you commit to a course of action.
Controlling Your Spending
It is (relatively) easy to decide that you need to control your spending. It is much harder to do something about it: to act on your decision.
All kinds of issues and problems can get in your way, from mental health (see box) through omitting something from your budget, to unplanned or emergency spending requirements such as birthdays, breakdowns or unexpected bills.
Mental Health and Money Management
Mental health and money management can have a huge impact on each other.
Worries about money can affect your mental health, and poor mental health can also affect your ability to manage your money. For example, if you are depressed or experiencing a period of poor mental health:
- You may find it harder to make sensible decisions about money;
- You may spend money to make yourself feel better;
- You may be more likely to spend money on impulse, especially on big purchases;
- You may find it harder to talk on the telephone or go to the bank, or even open your post and pay bills; and
- Your income may drop if you have to take time off work to manage your mental health.
To avoid having too many genuine unexpected demands, it is a good idea to go through a proper budgeting process before trying to limit your spending.
Make sure that you build in a proper contingency allowance each month—funds permitting—and know exactly how much you have for any discretionary spending.
However, if you have gone through this process, and you still find yourself struggling to limit your spending, especially on impulse, some of the ideas on this page may be helpful. They aim to provide you with a bit of ‘thinking time’ before buying.
Tips To Avoid Spending
1. Remove your favourite shopping apps from your phone
Make your life more difficult. Remove those shopping apps from your phone. Simply delete or uninstall the app via your app provider (e.g. Google Play or the App Store).
If you don’t have the app on your phone, you will have to search for the website, and navigate that, or go back into the app store and find it again. This makes it much harder to shop on impulse, especially if you are just looking for a brief distraction.
While you’re visiting the app provider, you might want to download a free game or two to act as an alternative distraction. Consciously use those when you feel the need to visit a shopping site.
2. Use free online tools to block certain sites
An extension of removing the apps is to block the sites on your phone or laptop.
You can use one of the free online tools designed for this purpose. For example, Freedom is an app and website blocker that works for multiple operating systems, and will sync across devices, so you only have to set it up once. It’s designed to stop you browsing when you’re supposed to be working or studying, but it will work to block access to any sites you choose.
Alternatively, if you have some kind of child protection software on your computer, you can also set it up to block access to certain sites. You can limit the block to certain times, or for a period of time.
3. Remove your card information from any shopping sites
Many shopping sites will save your card information, to speed up the buying process.
Slow the process down again by clearing your personal information from all shopping sites.
This means that you will have to enter information manually each time you buy. This will give you time to think about whether your purchase is really necessary. You can also remove your credit card information from PayPal and other online payment sites. However, this is a bit harder, and may require you to contact the provider to ask them to permit this without multiple reminders to ‘add a card to your account’.
4. Put your cards away
Storing your credit or debit cards out of reach is a very good way to limit your spending.
If you have to get up to find your card, you may find that your desire to buy is not so intense. Put your cards in other room, or away in a drawer somewhere, and only get them for planned purchases. Once you’ve made your planned purchase, such as your grocery shopping, put your card away again.
5. Get rid of surplus cards
If you’re really struggling, get rid of your credit cards altogether.
Ideally, you would close down your accounts, but this is only possible if you don’t owe any money on them. If you do, just cut up the cards so you can’t use them, and keep paying the account balance off each month.
Keep just a debit card, and ask your bank not to allow you to go overdrawn.
6. Turn yourself down to credit card companies
You may be at risk of applying for multiple credit cards to maximise your spending limit, especially if you have mental health problems.
To avoid this, you can add a note to your credit file to ask lenders not to give you credit.
This should mean that even if you get as far as applying for more credit cards, you will be turned down. Several of the big credit reference agencies offer this service, including Experian and Equifax, so contact them directly to find out how you can do this.
7. Ask your bank or credit card company for help
Odd though it may sound, your bank and credit card company do not want you to go into debt that you will be unable to pay off. It is not in their interests for you to end up bankrupt.
They may be able to provide help such as temporarily placing a lower limit on your card, or limiting cash withdrawals on that card.
Don’t take your cards with you when you go out
One way to avoid spending on your credit card is simply NOT to have it with you.
Instead, if you need to go shopping, take cash—and only take the amount that you have budgeted to spend. It’s not very exciting, but you can’t spend money on impulse if you don’t have any with you.
9. Give yourself a 24-hour thinking space for any purchase
Whenever you are tempted to buy anything, whether online or in a bricks-and-mortar shop, don’t do it immediately. Instead, give yourself 24 hours’ thinking time—or better, 48 hours.
By all means put it into your basket if you are shopping online, or ask the shop to hold it for you for a day (if that is possible). However, don’t spend any money at this stage.
If, after two days, you still feel that you really want to buy whatever it was, then go ahead.
However, it’s quite likely that you will have cooled off a bit, and not be quite so certain. It’s even more likely that you will have forgotten all about it. Alternatively, the article you want may have been sold, in which case, you can’t have it, and the problem is solved.
10. If you buy and regret it, then take it back
If you give in, and spend money on impulse, then don’t despair. Instead, just take it back to the shop and ask to return it.
Most shops will take returns, if you keep the receipt—and even those that won’t give you a full refund will often give you a credit note.
There are, of course, exceptions, such as perishable food, or underwear. However, by and large, as long as you take it back within the time limit on the receipt, you will be fine for most purchases.