Getting started with smart money management can be tough. It can be frustrating. For one, you have to discard so many old habits. Plus you have to develop new habits. And, toughest of all, you have to deal with the constant small (and large) mistakes you make as you’re getting the hang of saving and investing. In a lot of ways, learning to be smart with money can be like learning to ride a bike. At first, the ride can be wobbly. Sometimes you might even fall.
That’s the issue Carly is wrestling with. She makes financial mistakes and doesn’t know how to recover from them. Plus, she’d like to know how to prevent them from happening in the first place. She writes:
Over the past two years, I’ve begun the process of budgeting, clearing my debt, and becoming a financially responsible person. Most of the time I do a great job of this and manage to put a good chunk of my fortnightly pay against my debt snowball. There have been times, however, where a situation has triggered a spending spree. On a couple of occasions, it was a fight with my boyfriend. At other times, it was just a case of the blues.
After a particularly troublesome fight with my boyfriend a few months ago, for example, I somehow managed to blow $500 over the course of a weekend! I was wondering if you had any advice for how to recover from these kids of “relapses” should they occur and also how to prepare yourself for future upsets so they don’t result in financial irresponsibility.
This is a great question, and something all of us wrestle with from time to time. We’re all human; we all make mistakes. And, naturally enough, we all make mistakes with money. Even those who have mastered the basics of personal finance and are well on the way to Financial Independence do dumb things with dollars once in a while.
Carly has two questions: How to recover from these money mistakes, and how to keep them from occurring. Let’s tackle the last question first.
Avoiding Financial Failures
Avoiding financial failures is largely a matter of preparation. It’s especially a matter of knowing yourself and your personal psychology.
When I’m feeling blue, for instance, I have a tendency to buy books and comics or to place an order at Amazon. Because I know this about myself, I’ve learned to recognize the urge when it occurs. If I find myself wanting to browse Amazon just for the sake of shopping, I walk away from the computer. And I avoid bookstores.
For me, this is one of those areas where money management is similar to dieting. Many people find themselves making poor food choices when under stress. I’m one of these people. Left to my own devices, I’ll chow down on cheeseburgers and chocolate when things go wrong. But I’ve learned to make healthier choices. I always have handful of fruit around, for example, so that I can eat that instead of junk. (And, of course, I try not to have junk in the house.)
With money, a similar principle applies. When you feel tempted to splurge or you sense you’re about to make a financial mistake, remove yourself from the situation. Leave. Go someplace where you cannot spend or where the temptation to make the mistake is much less.
The bottom line is that avoiding money mistakes is a matter of self awareness. You have to train yourself to avoid them.
Recovering from Financial Failures
Even if you’re prepared, you’ll make mistakes now and then. How do you pick up the pieces when this happens? Here are some of my top tips:
- Don’t panic. When you make a mistake, try to relax. Don’t freak out. Take some time to calmly think about the situation. Sleep on the problem. It’s amazing how a little time can grant perspective.
- If possible, undo it. You can reverse some mistakes. Say you just blew a bunch of money on new clothes or are feeling buyer’s remorse over your new digital camera. Return the items, if you can. If that’s not an option, sell them to recoup some of your loss.
- Evaluate your options. Some mistakes aren’t reversible. If there’s no way to undo the damage, make the best of the situation. Focus on your long-term goals, and make a list of the options available to you. Don’t make any rash decisions. Be smart.
- Don’t get depressed. When things go wrong, it can be tempting to ease the pain by spending even more money. We buy things to make ourselves feel better, but this spending just has the opposite effect. We create a snowball of suffering. Fight the urge to administer “retail therapy”. Avoid compulsive spending.
- Don’t dig a deeper hole. Money spent is money spent. Just because you’ve already sunk $200 into a gym membership you’ll never use doesn’t mean you should keep spending money on it. Cut your losses by getting out as soon as possible.
- Keep your goals in mind. Most of all, remember your plans for the future. These little financial failures are just temporary speed bumps on the road to brighter future. Keep the entire journey in mind. Make peace with the past and resolve to do better in the months to come.
Failure is okay. Everyone makes mistakes — even billionaires like Warren Buffett. Don’t let one slip-up drag you down. One key difference between those who succeed and those who don’t is the ability to recover from a setback and keep marching toward a goal. Use failures to learn what not to do next time.
Advice from the Trenches
That’s my advice for dealing with money mistakes — but it’s all very dry and theoretical. I think Carly could use some practical suggestions, advice based on real life.
What sorts of financial mistakes have you made in the past? How did you deal with them? And what have you done to prevent splurges and setbacks in the future? Do you have any techniques for turning lemons into lemonade? What can you tell Carly about recovering from her financial “relapses”?
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Hi Carly,
I agree with all of J.D.’s suggestions, but would add two more of my own. First, after such a spree, look at how you spent your money – replace “somehow managed to spend $500″ with “I spent $500 on x, y, and z.” You’re holding yourself accountable this way, and it may help prevent future spending sprees. Second, if possible, set aside some money in your budget that’s specifically used for these sprees. If it’s in your budget, it’s less catastrophic when it does happen and over time, as you get better at controlling your spending, you can reduce the amount until it’s eventually zero.
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I agree. She definitely needs to be tucking a little “mad money” away somewhere that she can spend guilt-free when the mood hits.
Sometimes the biggest mistake that people make when they’re trying to dig out of debt/build savings is that they forget to plan a little “just for fun” money into the budget. It doesn’t have to be much… $5 or $10 a week gets you $25 or $40 of play money at the end of each month.
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I used to find that if I had less than a set amount of personal money a week I’d end up having crazy splurge days (with the financial hangover to back it up). Once I figured what my “comfortable” threshold that I could both fit into my budget and not feel restricted with was it almost entirely eliminated the problem. Much of the time the fun money just ends up getting put aside for later.
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I’m with JD on this one. The first thing I would tackle would be to try to avoid the situation in the future. But when it happens, I would try to return what I bought and at least stop spending right then. And I usually look into alternate ways to make money to replace whatever I spent (babysitting or hobby jobs like that). I am currently a Chick-fil-A kid cow mascot once in a while just because I like the extra cash. Anyway, good luck!
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Hey Crystal,
Were you on duty when the nation had their run on Chickie?
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My advice for mistakes comes from Nietzsche, who made fun of guilt because, in his words, it only added a second stupidity to the original one [the one that caused the guilt, that is.]
Setting things right and paying restitution is a much better system, and one that is used to deal with crime in various cultures. It re-balances the scales, but instead of balancing one evil against another (as is the case with incarceration and other doltish penalties), it neutralizes the original evil with some good.
So– why beat one’s self up over errors? That only leads to depression and self-hate. Our remorse might give us the illusion of “paying back” with our suffering, but that’s a self-indulgent process that doesn’t fix anything in the real world.
Get back your power, get back your dignity, and focus on making things right instead of punishing yourself– you’ll be happy you did.
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Let’s certainly not incarcerate bad people, (it’s so doltish) just get them to make “restitution”.
I guess we’re supposed to be impressed that you can spell Nietzsche. I think I may swoon.
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I’m sorry, next time I’ll try misspelling so as not to make you uncomfortable, Mr. Merfee.
Wikipedia entry on Godwin’s law
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Ooops. I didn’t get my reply in fast enough and now it just sounds like El Nerdo worship.
But, anyway, thank you El Nerdo for this, it spoke to my particular situation and gave me a practical solution: “get back your dignity, and focus on making things right”.
Thank you.
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While behavior modification is probably best (and spending money like crazy when you’re feeling emotional/depressed/stressed, etc. is worst), how about a middle-of-the-road solution, like the “I’m human” allowance? By allotting, say, $50 per month (or whatever you can afford) on knowing you’ll make mistakes, I think it relieves some pressure. It doesn’t require you to spend money only on debt repayment or necessities (or even fun money allowance), but it still gives you spending boundaries. It requires some self-control, of course, but it allows you to acknowledge, “I’m feeling bored today and nothing cures my boredom more than (insert your own activity with a cost here).
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Edit: Cortney said the same thing above, just shorter
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I agree that money management is a lot like dieting-a lot of people start a diet and fail but they find success when they actually change their lifestyle. Personal finance is the same way because it takes a full change of philosophy to make a long term change for the better.
My only advice for Carly would be to get back on the wagon and keep trying. I’m sure everyone has wasted money at one point or another.
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Retail therapy always seems to work. Psychologically, shopping boots our mood and makes us feel better–for a little while–because it key area of our brain are activated.
Dopamine is released when we experience something new, challenging or exciting. And so dopamine is associated with feeling pleasure. And for many people, shopping is all those things.
If the items can’t be returned and you still have buyer’s remorse, see if you sell them and recoup some of the loss.
Definitely, don’t beat yourself up from it. Learn from your mistakes. It sounds like to me you recognize when you overspend or at least what causes it. That’s the first step.
Here’s an idea: set up an account specifically for splurging. If you feel the need to splurge you will have the money for it. This doesn’t mean you decrease savings in other areas of your finances…just a thought
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She might also consider making lists before she goes, and tallying up the estimated cost next to the item. Then, she can pick & choose what to get, rather than just buying it all & wondering where all the money went.
When I feel like retail therapy, I make a mental (or paper) list of items I really want, then take the time to look for the bargains instead of buying on an impulse. If I run out of time before I find the right thing, I end the shopping trip instead of “settling” just so I leave with a bag in-hand.
It took a long time to get here, but eventually, I learned to be very discerning with what I buy, and the urge to impulse buy slowly stopped.
Now, I won’t simply buy a shirt because I’m in a store, and I’m bored/depressed. I go to the store on a mission. Before I buy an article of clothing/shoes now, it must be something I actually need and/or actually have a place to wear – and – it must be a good deal!
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Don’t dig a deeper hole is probably the most important advice. Stop the bleeding is always the first thing to do.
One more thing I’ve learned: blab about it to all your friends. Tell on yourself. I’ve found my friends usually are understanding and they pick me up. That helps; it helps a lot.
A few months later, mistakes always make for the best after-dinner laughs…
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Spend everything you have on debt. Not only will it reduce your debt more quickly, it also leaves you nothing extra with which to make mistakes.
In effect you make yourself artificially poor so that you keep yourself in check.
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True dat. That is essentially what I did for about 30 months. It was kind of grim, but boy, watching the balances drop every two weeks was a major incentive to keep going.
And when it’s done there’s *all that money* that used to go to debt that can now be saved, invested, or splurged. We did some of each.
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I could not agree more! I know it’s sort of nerdy or whatever, but I get great excitement out of seeing my student loan balances decrease, especially since I’m paying them off nearly as fast as possible (so the month to month changes look significant).
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I agree, but I think people need to develop long term, sustainable habits when it come to spending and saving. When I paid of my student debt, it was tempting to start spending again! It was kind of like dieters reaching their target weight and then going back to their old habits.
To some extent, the lifestyle has to change permanently if we want lasting success.
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Shopping used to be dangerous for me too
Having a budget helped, but then there was that thrill of going against my carefully laid plans…
I learned to deconstruct the habit. Sometimes what I wanted was an outing — and a walk would do the trick. Sometimes I just wanted social contact, and coffee with friends was more constructive than shopping with friends.
And yes sometimes I just want something new and my weakness is books. (They always fit and they’re sure to satisfy!) Thank goodness for libraries. I find the environment soothing, and I get that same rush shopping for books there as I do at a bookstore.
Sometimes you just have to find a constructive way to work with your impulses rather than fighting them when you’re already upset.
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Elizabeth,
I think you hit the nail on the head. Whenever I get the urge to splurge, it is usually because I have cabin fever, and need to get out of the house.
Going shopping “on a mission” helped. I could get “out”, and kill an errand or get something I/we actually need at the same time. I no longer simply impulse buy just because I’m “out” – but that used to be a real problem for me, too.
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I love this idea! Go “shopping” at the library. If you love books (or DVDs or whatever else your library has), you can help yourself to lots of new and shiny things and it doesn’t cost a penny!
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This is not the same subject as the original title but it’s being mentioned often, so I’ll add.
When I’m stressed out, and I need to decompress, a little dose of computer games works wonders for me. I have old games that cost me $10 per download and can keep me entertained for hours.
The best thing about them is that their “alternative reality” allows me to take my mind off problems, so I can come back refreshed/cooled down/ relaxed to face my problems.
Only potential danger there would be to develop an addiction– it’s been known to happen. I think some time ago a couple in China sold their baby so they could keep playing some sort of game.
Anyway, none of that for me, and while I love to eat, and I can eat for stress, I find that games are a better, more cost-effective and ultimately healthier decompression mechanism for me. To each their own, etc., but I thought I’d put that out there.
Ah, also, if you’re not from the computer game generation–I’ve got a new printer can deliver fresh Sudoku puzzles on demand, and I keep them around to fill throughout the day. I love those! Very soothing.
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For avoiding emotional overspending I have two strategies.
1st, I have identified certain things that are much more successful (at chilling me out) than shopping and that cost nothing. If I feel the buildup of frustration or rage (hey, I’m perimenopausal) I drop what I’m doing as soon as I can, and go do one of those things that chills me out.
2nd, I have a mad money fund. If I am feeling stifled or otherwise irritated by the ongoing necessity of watching my spending pretty darn carefully (just like calories, money has to be watched all the time, not just when there’s an emergency), I am allowed to spend what I have in my MMF.
It is a cash fund and I build it up with $10 bills that I get in change from cash purchases.
As to recovery from an overspending binge … the “avoidance” strategies have worked so well for such a long time that I don’t have a current method. Perspective is the main thing. Was permanent damage done by the spree? Then what can be done immediately, and over time, to correct it?
If permanent damage wasn’t done (i.e. you didn’t take a loan from your 401(k) to buy a new car) then “this too shall pass” and working on avoidance would be my recommendation.
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I try to suck it up, move on, and learn from my past mistakes.
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I second those who say if you bought things you can usually return them (though you can’t un-drink beer). Building a “depression buffer” into her emergency fund may help, though instead of resigning herself to a new Dooney and Bourke purse she could use the money on personal training sessions or something uplifting. Also, maybe as soon as she realizes she’s upset or under stress (say after the blowout with her BF or what have you) she throws all her credit cards in the freezer. If she shops online, she should delete all the saved credit card information (far too easy to be lured by the “one-click ordering” on Amazon).
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I would suggest you sit back and ask yourself what you might do to deal with stress or blues that don’t cost a lot of money.
For instance: I have found that taking a long bubble bath with my favorite magazine at hand, will do much to brighten my mood at a no cost at all.
Or when the weather is nice, I’ll pack up my dog and a great book and lounge at the local park (or bike over to a park further away). I’ll bring a blanket and a picnic and GONE are all my troubles.
You could invite some girlfriends to a night of watching movies (and complaining about your boyfriend!).
Finding alternatives to spending sprees that make you feel just as good, will make you feel even better when the dust settles and you still have all your money.
And of course, if your boyfriend continues to make you feel bad, reviewing that particular situation might not be a bad idea.
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I only shop when I need things, it’s been months since I set foot at the mall.
My guilty pleasure was books, just walking into the bookstore and smelling that fresh book smell, was such a high. But then when I started giving the books away because I had no room for them, I realized it was a waste and have used the library exclusively for the past 5 years. Including on my Kindle.
I always remind myself that each and every day is an obstacle course when it comes to money, everyone is trying to get you to spend. It’s one day at a time. When I go a week without spending money it’s an absolute triumph. Mistakes have their good sides too, use them as a teaching lesson.
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Like a diet you can’t blame yourself for every little mishaps on the way. You may not reach your goals on time, but if you stay motivated and are persistent, you will eventually get there. So keep it up!
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I would consider these splurges to be expensive lessons in personal finance. By being aware of them, you’ll likely avoid repeating the mistakes in the future. You’ll “save” the money that you would have spent had you not recognized that your previous splurges were mistakes.
Most of all, if you end up keeping the items, or if it was a fancy vacation, etc., then enjoy them! Don’t fret about what you can’t control in the past. Learn not to repeat the mistakes, but you might as well enjoy whatever it is that you splurged on. The same applies to indulging in a big tub of ice cream.
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I’ve long since realised that splurges happen and you can’t stop them, you just need to control them. For example I bought a new car a few years back, then started cycling to work two months later. And yes it was bought on credit.
The solution was to move to sinking funds and a fun column (Tim wrote about this too). Basic idea was that my planned expenses were taken care of but I had a set amount that I could spend on anything I wanted, usually something stupid but not feel guilty about. It started off at €20 a month but has worked amazingly well. Had much less “impulses” since I started this.
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When I was young and people still memorized poetry, there was one little doggerel which had some good advice that actually works.It has the advantage of keeping one busy when raging to do something, but is constructive. Take it or leave it!
How to be happy
Are you almost disgusted with life, little man?
I’ll tell you a wonderful trick
that will bring you contentment, if anything can
Do something for somebody, quick!
Are you awfully tired with play, little girl?
Wearied, discouraged, and sick-
I’ll tell you the loveliest game in the world,
Do something for somebody quick!
Though it rains like the rain of the flood, little man
and the clouds are forbidding and thick,
You can make the sun shine in your soul, little man
Do something for somebody, quick!
Though the stars are like brass overhead, little girl,
and the walks like a well-heated brick
and our earthly affairs in a terrible whirl,
Do something for somebody, quick!
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“Buying When Blue” – oh yeah, my son used to call it “Special Treat”. Shopping as a way to get the dopamine rush to replace the blues. I agree with the advice given thus far to find free or cheap Special Treats, and to take preventative measures when possible.
For me personally, analyzing the blues (perhaps to death) is what works. Sometimes I know what’s bothering me but more often I only THINK I know what’s bothering me. My favorite method comes from Julia Cameron’s “The Artist’s Way” – Morning Pages. I try most mornings to write 3 pages in a journal of whatever is on my mind. It contains more deadly dull pages about my finances and job than you can imagine! Usually the first two pages are what I think is bothering me and in the last page, I spontaneously write down what really is bothering me. Sometimes I immediately know what to do to fix it, sometimes I have something interesting to think about in the shower, and sometimes it ends with “Despair, you stalk my dreams again” or something equally self-pitying and I don’t have a great resolution (but I do have something to write about the next day).
Very occasionally there is nothing I can pinpoint as the source of my anxiety and nothing I do makes me feel better. Then I realize it’s just that the neurons aren’t firing right at that time and the best I can do is ride it out.
I like order, so sometimes straightening up my work area or home or office makes me feel better.
Finally, I read Tarot cards so sometimes I pull a few to gauge the situation or to clarify a journal entry.
It’s all about what works for you.
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Shopping was also dangerous for me. If I was upset, I would head to Target or Nordstrom. Now I am fully aware of the issue. It helps to have a solid budget and be AWARE of the problem.
Now — I garden instead of heading to store to buy stuff.
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I agree with others. Prevention is the best medicine. Identify less expensive and more productive ways to relieve stress. AND WRITE THEM DOWN. Tape them up where they will be most useful. Write them on a small card if you need to and keep them in your wallet, clipped to your credit card if that’s what it takes.
Part 2 is to try to get rid of unnecessary stress (sometimes easier said then done).
I like the bubble bath idea a lot.
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This is the closest to what I was thinking. When I’m really overwhelmed at work, it carries into the rest of my life and I have a really hard time and drive my husband crazy. The last time this happened, I made an ordered list of things that should calm me down (take a bath, go for run or walk, etc.). I told myself that I would try everything on the list to de-stress before I could complain to my husband or anyone else. It’s been several months, and I haven’t even had to use it yet. I think just knowing that I have a plan ready if I need it helps a lot.
Also, it might be worth identifying a reasonable splurge that does cost money, because sometimes it just feels really good to buy something. Going for a massage or manicure might be a good way to relax and get the satisfaction of swiping that card. It’s also time consuming, so you can’t be going into stores to buy other things!
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You should try to figure out why you go on a spending spree. It sounds like you were not feeling great about your situation and think that spending money will make you feel better. It might work in the short term, but you are regretting it for the long term. Maybe find something else that can make you feel better. Go for a hike or go see some friends might be better options.
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I think this general idea has already been suggested, but here’s my version. I try to pay attention to things I spend on when I’m upset. Is it eating out, movies, buying cloths, etc… Then think of cheaper substitutes or set a limit for your spending. For instance, you’ll go out with friends for drinks but stop after a certain $ amount. You’ll rent a redbox movie instead of going to the theater and buying snacks, you’ll thrift store shopping instead of to the mall. Save these new substitutes for the times you absolutely need a “fix”. And most importantly, make an event of it to try to get it out of your system. As in, announce to yourself “I’m so upset, I’m going to spend the afternoon thrift store shopping and can spend up to $. Use that time to wallow a bit, with the understanding that when it’s over, so is you’re spending spree!
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Carly did a lot of things right. First, she realized she’d made a financial error and she saw the pattern. Second, she wants to prevent it from happening again. I think those two things are going to be the driving force behind her successful transition. My advice? Don’t beat yourself up any more than you already have and find another, creative way to cope with life’s ups and downs.
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I think I’ve mentioned on here before that my husband and I have been debt free (minus the mortgage) TWICE before in our 15 years of marriage, and still managed to rack up another 5-figure round of consumer debt that we are now digging out of. *Sigh* Old habits die hard. It’s easy to convince yourself that you “need” that new sleeper sofa because your in-laws might come over some day when the old college futon worked just fine for an occasional over-nighter. As JD says, it’s money under the bridge at this point, so we just need to move forward.
One major change that we’ve made this year that has seriously helped us avoid adding to our credit debt is to use same-as-cash store installment plans, and to set aside a small amount of each paycheck into a major purchases/repairs fund (stored somewhere other than our main bank).
I know the same-as-cash deals only work if you pay off the balance in full within the alloted promotional period, but if you set up the automatic payments via your bank, it works just fine. (KEY – you must IGNORE the minimum payment listed on the monthly statements!! Pay the full 1/6th or 1/12th or “whatever chunk gets it paid in full on time” anyway.)
So far, we really like it because our major purchases savings is not where we would like it to be just yet (it’s getting there). When when our 25-year-old stove finally quit working, we were able to get a new-ish scratch & dent model with a warranty and still only pay a small (managable) portion each month at 0% interest.
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We have an ING fun account, $50 goes into it every pay check. Obviously the point of a fun account is for fun, but you could set up a splurge or a mad money account for the same reason. Having the money at ING means it takes a couple days for it to transfer so you may find that you really don’t want to splurge by the time the money comes through.
I enjoy shopping (although I hate the mall), so if I’m feeling spendy, I will do some virtual shopping. I’ll browse Amazon or eBay or JCrew and I’ll go through the process of picking something out in my size or favorite color and I’ll put it in my virtual check out basket/bag or I’ll watch it on eBay. Somehow that process of browsing and selecting nearly always satisfies my urge even without actually completing the transaction. Some times I’ll go back later and if the super deal is still there or I still have a strong want I may buy, but more often I don’t.
Right now, in Amazon, I have seven save for later items. And I know some of them have been sitting in limbo for years. On eBay, I’m watching 13 items.
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It might be good to figure out why spending is your go-to when you feel bad. Oftentimes, when you uncover the reasons behind seemingly “reflexive” behaviors, they tend to dissipate on their own.
Maybe you could enlist a friend to be your new go-to. If you have a fight with your boyfriend, call her first, and the two of you can go do something free or cheap, like take a nature walk and talk about it, or even go for a drive while you sing along with the radio. Something where you’re able to express and deal with the emotions you’re feeling, but also get a helping hand to drag you away from the mall.
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I agree with Courtney, that the statement “somehow managed to spend $500.00″ needs to be replaced with specific details on the spending.
As far as preventing this in the future, I’m going to pull advice from the really excellent book The Power of Habit by Charles Duhigg:
1. Learn the “20 second rule”: If you can delay something by as little as 20 seconds you often can take control of it. For example, the author used an example of trying to write a book, but he’d come home every night tired, would plop on the couch and turn on the tv and it all went downhill from there. He learned that by moving the tv remote across the room and into a drawer, he actually would not make the 20-second effort to get up from the couch and get the remote. Instead, he wrote the book because with the remote too far away, the tv never got turned on and he instead turned on the laptop that he had already set out on the coffee table.
To take this 20-second rule to spending, there are several things that can be done: First, if the spending was from familiar online stores, she could remove the memorized passwords and credit cards from the store’s site. This way, if Carly wants to buy something, she has to remember the password, key it in, then go get her purse, dig out the credit or debit card and key it in. This should cause enough of a delay and enough extra effort that she may decide not to bother buying the item. (Now you know why the online stores want you to store your credit card info with them!)
If it is credit card spending in the brick and mortar stores, then Carly could do the classic “freeze the credit card in ice in the freezer” but to be honest, I’ve never known anyone who actually did that.
Another 20-second-delay idea for the credit card would be to get some pretty gift wrapping and put a lot of wrapping paper and tape around the card and then go ahead and put it in your wallet. That way it’s there, but you’d have to go to the effort of unwrapping the darned thing (in front of the store clerk, no less) if you really wanted to buy something. Besides, if you wrap it pretty enough, you won’t want to tear the wrapping up! That should put the brakes on impulsively charging most trinkets or snacks for sure.
If spending cash is the issue, then Carly again should make it as troublesome as possible to get to the cash. Sealing it in an envelope, then locking it in a box, then dragging out a chair so she can stand on it an put the box in the farthest corner of her closet shelf might work. She might also try splitting the cash up into several different sealed envelopes, so that if she becomes overwhelmed with impulsive “gotta feel better” emotion, then she may just grab and blow through one envelope instead of the whole stack of cash.
Another great thought from the same book (I think! If not, it’s from Succeed: How We Can Reach Our Goals by Heidi Grant Halvorson – I’ve just read them both so am not 100% sure) – is that Carly should go back over the list of the details of the $500.00 spending and figure out what reward she was trying to get. A blast of adrenaline from doing something reckless and forbidden? The comfort of a gallon of delicious premium ice cream? Wanting to feel attractive by buying designer clothes? Feeling part of a group by having a night on the town with noisy friends? Whatever the “reward” was, she could then figure what low-cost way she could substitute next time to get that same feeling. For example, it may satisfy her “reckless and forbidden” to read a racy romance novel, or to get a canvas and use a brush to recklessly splash a bunch of paint on it (that’s the artist in me talking now) or maybe she could satisfy the “feel attractive” and “reckless” at the same time by getting a mirror and her cosmetics basket and changing her makeup or nails in a radical way. I’m just trying to guess at things that would give Carly the same “reward feeling” that she could substitute. The point is that she look at how she spent the $500, think it over, and have a plan of substitution the next time. Planning in advance on how to change the course of a compulsion to satisfy a certain “reward feeling” will help tremendously.
I also like PS’s poetic suggestion, to relieve the bad feelings by doing something for somebody else. It really does work!
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Make it hard to make those emotional impulse purchases that you are susceptible to by freezing your credit card in a block of ice or by using a cash envelope for budget items. You have to make it hard to access your cash impulsively and find a healthier way of expending that emotional energy.
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It’s a big step for Carly to learn that she has been taught that her emotions are to be modified by spending. Since successful money management is how we think and feel about money, she can now think herself out of excessive spending when she recognizes the trigger for it (the blues or feeling badly after an emotional situation). It can be tough to feel our emotions; it is easy to distract ourselves from them by spending. I would suggest Carly might write down when she feels the urge to overspend and what her emotions were just before that feeling to shop. She might be surprised and be able to come up with an alternative action to take when she has those feelings.
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I also think it’s good to take note that as you pay more attention to your finances, you will most likely begin to feel the desire for a splurge less often. So if you feel like splurging often at the beginning of your GRS journey, be comforted that soon your cravings will transfer from new items/vacations/status symbols to accumulated wealth — and the pride stemming from the latter is much more permanent. =)
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Look for an alternative pick me up. For me this is excersing down by the river… either power walking, rollerskating or cycling. Al of these are free. On the bike and the skates I push myself to beat my time and somehow focusing on my breathing and beating my time is a great distratcion when things have gone wrong in life… and doesn’t cost a cent! If the weather is bad I buy a coffee at my favourite coffee store and snuggle into their couch with their magazines and feel in a better mood in no time! (Cost $3, not $500!)As long as Carly has some activities that make her feel better that aren’t expensive and implements those when she feels blue she should be able to avoid emotional spending.
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it can be hard to make those choices at the moment you’re feeling down, though. Having thought them up beforehand is a good strategy, but it’s also good to just do some of them beforehand.
If Carly has a regular fun/relaxing thing built into her schedule, she might not feel the shopping urge so much to start with.
I used to have “spa days” with a friend – on Saturday mornings we went to a gym location that was only busy on weekdays, worked out a very little, used the sauna or the hot tub, and then went out for breakfast. Then I didn’t get to Wednesday feeling like all I ever did was work and parent and I needed something fun in my life.
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Whenever I have the urge to spend I cleanup the house first.
That way I see all the stuff I’ve bought..don’t need and have to clean.
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We have a category in our budget for “Accidentally Spent Money.” It’s pretty much guaranteed that my free spirit, spender husband will spend random money each month (outside of our “blow money”), so having a set amount planned for that gives me some peace and gives him a limit to his madness.
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If weekends are the danger zone, schedule them in advance. Yoga in the morning. Brunch with friends. Volunteer at a food bank. If you have unstructured time, you’ll be more likely to shop. The more you can be with other people, the better (unless they want to shop!).
Keep a wishlist of things you actually need to buy, even mundane household stuff. Gifts for friends/family. When you “have” to shop, turn to that list first to scratch the itch.
Give yourself small goals to break the shopping habit. Recently I noticed I was using retail therapy not just to relieve stress, but out of boredom. I set a goal that I’d do no shopping in July aside from a known purchase for my husband’s birthday. I wasn’t perfect (my workout timer broke and I bought another, since exercise is my other current goal), but it really switched off the “go shopping” impulse that I was getting every weekend.
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Two things: other than recovering what money you can as J. D. said, don’t dwell or do guilt trips on the past (though it’s great that you’re learning from the mistakes!).
On the practical level, I would put more of your discretionary money into a less immediately accessible account, maybe a smaller bank or credit union not so close to where you live, or maybe an online account such as ING Direct or Ally Bank. This works well for us – we mail in our deposits and they build up:). And it can take a day or to move money from the online accounts to our main bank, thus the $$ is not immediately available, some time passes, and you’d probably be less likely to go for retail therapy!
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Don’t forget that many items can be returned if you still have the receipt and it’s within 30 days. Even if you can only get a store credit, you can later use that for something you would have bought anyway, like a gift or something practical.
You can also sell your Stuff, (BTW, that capital “S” is for you J.D.!) and even if you get less than you paid, it’s still more than you would have gotten from letting the item sit on a shelf.
Katy
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I like to think I have this under control for the most part.
But I just splurged last week and felt both good and a little guilty about my purchase at the same time. (And I don’t “do” guilt)
So I said I’m going to do good with my purchase to make retribution, as another poster said.
I bought a Le Creuset Dutch oven that I’ve been coveting but didn’t “need”.
So I decided I’m going to use it and make multiple dinners for my elderly neighbors and new neighbors with a baby and I’ll make the splurge worth it.
Guilt is a useless emotion if it doesn’t spur you to action.
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In addition to having fun money, why not see if there is a way you can stretch that money. If you like to buy something, why not challenge yourself to find it as cheaply as possible? Perhaps the challenge will turn into a new hobby, and your spend money will go further.
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For some reason the site won’t let me reply to comments.
I’m with the library crowd. Usually when I’m engaging in retail therapy or cheating on my diet, it’s because a sense of abundance is missing (which is subtly different from feeling deprived). Bringing bags of books home helps, even if I don’t get them all read. Turns out I don’t have to pay for things to feel like I’ve splurged.
One does have to watch the library fines when one brings home great stacks, though…
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As long as you believe that you’re better than you used to be – in terms of money management – then you’re on the road to success. Keeping negative emotions in check is the first step and I did this by paring down my social life. I do not accept invitations (for any gathering) readily as there’s a strong correlation between being a social butterfly and acquiring unhealthy debt. To get myself back on track I have lots of alone time.
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When I want to spend money that I don’t have, I hit up the library or go surfing!
Chase
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Perfect advise – simple yet effective. When something triggers your weakness, do something that is free such as a trip to the library or surf the net.
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It’s interesting that the trigger for Carly’s shopping sprees is often a fight with her boyfriend. When we do things that are harmful to ourselves in response to other people (whether it’s a signifincant other, boss, or just a random jerk), we give a lot of power to that person. I used to shop when I was feeling down, especially if it was after a fight with my mother. This habit stopped when I realized I was letting someone else’s behavior affect my own. I decided I was just too stubborn and too strong to let that happen anymore.
After I broke the habit, my relationship with my mom actually improved significantly. In a way, shopping because she made me mad was just one more thing I could blame on her. It dragged out the whole fight and added to my resentment, which really wasn’t fair to her.
On a less serious note, I also prevent spending sprees by avoiding malls and fashion magazines. You won’t want to buy what you don’t even know you’re missing.
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Making mistakes is one of the basic building blocks of life. There’s no harm in that. But the key is to not make the same mistake TWICE. Or thrice. If you’re keeping on making the same mistake, you’re clearly not learning from your previous mistakes, and that, is a huge problem. To me, this is more of a psychological or behaviourial issue, than anything else. Whatever suggestions people have made, most are great ones. It ultimately boils down to how you incorporate changes in behaviour in your life.
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I find it hard to not spend because my friends want to shop and eat out all the time. What I do is set aside basically an allowance. I tell myself this is all you have to spend, so that I don’t end up over spending.
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