219 | How to Keep Impulse Spending from Ruining Your Finances

Impulse spending is a struggle for a lot of lawyers. It can lead to overspending, increased debt balances, and lack of savings.

But there are ways to curb your impulse spending and keep it from ruining your finances.

In this episode, let’s talk about 5 tips to keep your impulse spending in check.

• • the struggle of impulse spending

  • 5 tips to help you curb impulse spending

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You’re listening to Wealthyesq. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. Today we are talking about impulse spending. Impulse spending is an issue for a lot of lawyers and for people in general really, it is often tied to emotions and one of the biggest things that comes up for my clients is stress. So you know, spending because they’re feeling stressed. For some, that’s the way that they deal with the stress they go shopping. For others, it might just be from seeing things that they like and buying those things without thinking through the impact that the purchase might have on other things they want to do financially. But whatever the source of your impulse spending is, I want to share five tips that can help you reduce the impact of that impulse spending on your finances. The first tip is to remove your credit card information from wherever you have it stored online. A lot of my clients love to shop online and I had one who was really big on buying stuff from Instagram ads so she would get these like really random items that she wasn’t looking for before but never realized how much she needed until she saw the ads. And she had her payment information stored on Instagram. So when an ad came up, she could just go in there and you know, click whatever buttons and buy it. And the same kind of thing happens with a lot of people in Amazon. This is another one for a lot of my clients where they have their credit card information, their shipping information, all of that stored on Amazon, so they can just click a few buttons and buy whatever they want. And then Amazon also has the Buy Now button where you can just click one button and buy it immediately without going through the whole checkout process. The thing is these companies know that by reducing what’s called friction, it makes it much more likely that you’ll buy so if they can reduce the amount of time the steps that it takes between you deciding that you want an item and you actually being able to complete that purchase. You’re much more likely to make the purchase and not back out. So by having your credit card information stored by having your shipping information stored, having things like a Buy Now button where you just press one button and it’s purchased. You don’t have to go through the steps of going to get your credit card and typing in the number and you know choosing your shipping and whatever else that puts extra time between you seeing the item and making the purchase. You just click a few buttons and it’s yours and those measures are in place. They save for convenience sake. But really those measures are in place to make the companies more money because the more time you have between seeing an item and actually purchasing it, the more of a chance you won’t complete that purchase. So by removing your payment information from the places you shop online, you add some friction in yourself because you’ll have to go get the credit card put the number in or even if you know your credit card number by heart. You still have to type it in and all of that takes more time and it gives you that little pause a little break that little bit of friction that allows you to consider whether you actually want to make the purchase or not. That brings me to the second tip. Take a pause when you’re going to make a purchase and ask yourself, Do I really need this thing? Do I really want this thing? And is this thing more important to me than whatever my goal is? So let’s say for example, you are working on building your savings or paying off debt or saving for a house saving for vacation, anything like that. Anything that you do with your money. That’s not whatever your goal is, is taking away from that goal. So any purchase I make is taking away from me being able to save more or to pay off my debt or whatever. So you want to make sure that you’re making that choice intentionally. And not just looking at the end of the month after all these purchases and realizing oh crap, I don’t have money left for my savings or I don’t have money left for my extra debt payment or I don’t have money left for my vacation right? By taking a beat before you make the purchase. And asking yourself, Is it something I need? Is it something I want? Is it more important to me than my savings? my emergency fund my vacation my new car. By taking that beat you give yourself time to think more clearly so you make the decision to purchase or not more intentionally, and you don’t end up taking yourself off track. From your finances just because you weren’t paying attention. The next tip is one I offer to a lot of my clients as I said a lot of them like to shop on Amazon. And so this is something that we do for Amazon purchases but really it can work with any online retailer that you spend with a lot. I just find that people shopping habits on Amazon tend to be a little different from other retailers where you might be on Amazon multiple times a week buying things and immediately checking out and then the boxes show up and all of that. So the tip is to have a day that you make your Amazon purchases like that you actually check out so as you’re going through the week, you see this thing you want to buy you see that thing you want to buy this other thing you want to buy instead of buying them right when you see them, you add them to your cart, but you don’t check out until whatever day you choose. So let’s say your day is going to be Saturday, you are putting your stuff in your Amazon cart all throughout the week. Then on Saturday morning, you’re like ooh, it’s Amazon day. And you go on there and you look at what’s in your cart and you decide if you still want to buy those things. So there will likely be things in there that seem like such a good idea. Such a cute thing. When you first saw it but by the time Saturday rolls around you’re wondering why you even put it in your cart in the first place. So this tip is similar to the first two and that it’s another way to add a little friction to the purchase. You’re not buying the things immediately. You’re giving yourself a couple of days or a day if it’s Friday when you put it in. But the point being you give yourself that time to think about the purchase and you may ultimately decide that you don’t actually want all those things the next tip tip number four is to have a fun money account. This is a separate account that you send money to each month that you can spend however you want to this actually grew out of my husband’s and my own experience when we first combined our finances. And the biggest tension we had was over things that we were buying that the other person didn’t think were as important or were worth as much as we were spending. So like I was spending a lot on makeup, beauty products, stuff like that. He was spending a lot on coffee and we each thought that the other was spending too much on these things. So to fix the issue, we decided to give ourselves a set amount of spending money each month that we can spend however we want to no questions asked it doesn’t affect the family finances. It doesn’t affect the other person at all. And we take that money from our joint account and it gets sent out to separate individual checking accounts at the beginning of each month. And that way we each have money we can spend however we want throughout the month I use the same strategy with my clients who don’t share their finances with the partner and it has been just as helpful so instead of the money going from a joint account to separate individual accounts for each partner, for them, it’s sending money from their main account where they pay their bills where they buy their groceries, all of that to a separate checking account their fun money account that they can spend that money however they want to so it’s in their plan. They know they can spend that money without worrying about how it’s going to impact their financial goals or anything like that. So you set up a fun money account for yourself or if you manage your finances with a partner. You set it up for yourself and your partner. You get a set amount of money each month just for fun stuff and that way you can spend it however you want to and you still make sure that you are not influencing or impacting your financial goals all right, the final tip is to get clear about how you’re feeling when you’re impulse spending, like we talked about at the beginning of the episode for a lot of lawyers is triggered by stress. For some it could be other emotions like sadness or excitement or you know just things like that. So whatever it is for you. You want to recognize how you’re feeling when you’re impulse spending, then you want to learn how to just feel the emotion without shopping to distract yourself from it. So just sit with feeling stressed or feeling sad or feeling excited or feeling happy or whatever the emotion is for you. And then another tip is you can also choose a new way to handle that emotion. So instead of shopping, maybe you go work out when you’re feeling stressed or you go for a walk or you call a loved one. Right maybe instead of shopping when you feel sad, you allow yourself to cry or you journal or something else. Just replacing that shopping habit that impulse spending with a healthier alternative that’s not going to have the impact on your finances. So those are my tips on making sure that impulse spending does not ruin your finances. Number one, remove your credit card info from the places you shop online. Number two take a second and ask yourself whether you need or want the thing you’re about to purchase and whether buying it is more important to you than your goals. Number three set a day that you make your Amazon purchases. Number four, create a fun money account that’s separate from your regular spending. And number five, check in with how you’re feeling when you impulse spend and find other ways to handle those emotions. All right, that is it for this week’s episode. Please share this episode with a friend or two who you think it uses information. Sharing the podcast with other lawyers is how we spread the information and help more lawyers on their journey to improve their finances and get out of debt. And as always, I appreciate your support. As we close out friends, I pray that you take the information you learn here, apply it in your life and open up to the realization that wealth is available to you. As you do that consistently week after week. You’ll continue to take steps to regain control of your time, build wealth, and live the life of freedom and choice you deserve. Talk to you later.