A simple tool to save you big bucks: impulse control

It's easy to buy something on impulse, but can be harder to face the credit card statement later. You don't need to eliminate all impulse buys, but do put limits on them.

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    A barman prepares a cappuccino at Intelligentsia Coffee and Tea in the Silverlake area of Los Angeles on Oct. 19. Impulsive decisions to buy something, whether a cup of coffee or a new bestseller, can seem harmless at the time, but ultimately mean that your impulses are in control of your finances – not you.

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As I’ve mentioned on here several times, I have a weekly piano lesson, something I enjoy very much. On my way to my lesson, I drive by a bookstore and a game shop. On my way home from my lesson, I drive by that same bookstore and same game shop.

Every week, especially on the way home, I’m tempted to stop. I see the game shop coming up on the right and I get an impulse to stop there. I see the bookstore a little bit later on the left and I get an impulse to stop there.

Yet, almost always, I resist.

Five years ago, I would have stopped, almost every time. I would have went into the game shop, thought about my friends, and picked up a new game to play with them (even though I have quite a few already). I would have stopped at the bookstore and picked up a few new books to read (even though I have a book backlog right now).

Today, at most, I’ll stop once every two months at one or the other of the shops, and even then, rarely do I walk out of the store with an item. If I do buy at such stores, I usually walk in the door knowing exactly what I’m looking for and walk out the door with just that item.

What caused this (hugely financially beneficial) change? Aside from the trite answer of “I just changed my perspective on life,” I found that a handful of tactics really facilitated this change.

Avoid impulsive moments
For me, the best immediate move to make was to simply get myself away from impulsive moments. I started driving a different route to work. I avoided social activities that revolved around buying stuff. I started even re-evaluating my hobbies in order to seek out ones that didn’t encourage impulsive buying (like walking in the woods, for example). The biggest reason for doing this was to simply break the cycle of impulsive buying.

Reflect (at length) on the times when you give into your impulses
If you do discover that you’ve given into an impulse, spend some time thinking about that event and why it happened. Why did you spend that money? Are you really happy with that purchase? What can you do to make sure it doesn’t happen again? You don’t need to beat yourself up over it, but you will find great reward in thinking about the “why” of the matter, as it will lead you towards not repeating the mistake.

Minimize your stress
When you’re stressed, you’re more impulsive. I certainly observe this in my own life – when I feel a lot of pressure and stress, I usually just seek immediate ways to relieve it, even if it’s not a good long-term choice. A new game or book feels good, so I’ll sometimes fall right into that. Thus, it’s useful to seek out ways to reduce the amount of stress in your life. I meditate, pray, play games, read, and play with my children – all of these help me de-stress.

Be accountable to someone else
This is particularly easy if you’re married. The way we do it is by having completely open bills – credit card statements, bank statements, and other such things are reviewed by both of us. Because of this, it’s impossible to “hide” things – we have to be fully honest with each other. If you have a spouse, I highly recommend this. Of course, if you don’t have such a partner, you may have more difficulty doing this – a trusted friend, perhaps.

Allow yourself some impulsiveness – but keep boundaries on it from the start
My wife and I each have some leniency when it comes to impulsive buys. We essentially each have an “allowance” with which we can each buy whatever we’d like. Often, I’ll buy a game or a book – my wife usually buys a book. This “allowance” often gives us just the freedom we need to not have a sense of being deprived while also keeping very good control over our personal finances.

Use the ten second rule and the thirty day rule
The “ten second rule” basically means that you should spend ten seconds thinking about any purchase you’re about to make before making it. This helps you to reflect on potential impulse purchases and often put them directly back on the shelf. The “thirty day rule” means that you should spend thirty days before buying any item that costs more than a certain threshold – say, $25. This prevents you from drowning yourself on an expensive impulse buy.

What’s your impulse?
Most of us have impulses that work in opposition to our financial goals. We buy gum or a bottle of soda at the checkout. We pick up a DVD. We buy some new clothes. We purchase a new gadget or a new book. Most of the time, these decisions are heavily impulsive – done on the spur of the moment – and we often feel bad about them later, particularly when we find we’re not using them much and now we’re facing a bill that we can’t easily handle.

Breaking free of such impulses can have a very large and dramatic effect on your finances. It becomes easier to budget and plan ahead. You suddenly have more resources each month with which you can save, pay off debts, or invest for the future. Best of all, you find that you value the things that you do buy a lot more than you used to.

Impulse control is an essential tool for personal finance success.

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