Splurge spending is a true threat to a well made budget, getting out of debt, or saving for a future goal (house, car, vacation, retirement).
The worst part of splurge spending is that it seems minor and innocent until we realize it is a money sucking beast that is ruining our good intentions.
If you are tempted to splurge or find that you are spending $5-$10 dollars a day on junk, here are six easy ways to get splurge spending under control.
1. Receipt review
Keep every receipt for whatever you buy for an entire month. Print off receipts for items you purchase online and keep that tiny receipt from the gas station.
At the end of the month, review these receipts to find out where your money goes. You are looking for trends in money you spend without thinking.
One woman realized her husband spent $80 one month on gas station candy. He just wasn’t thinking how $2–3/day can add up.
Are you finding that you are spending hundreds on eating lunch out at work?
What about getting your nails done every ten days?
Find the splurges and decide if you can:
– live without
– replace with a something less expensive
– or if one of the items is something you truly want to budget for in the future
2. Have a no spend day, week or month
If you have never had to really watch your cash, having a no spend month might be too overwhelming. Instead, try having a no spend day or week.
During this time, you do not buy anything that is not absolutely necessary. So gas for the car is allowed, but no eating out, shopping, Starbucks, iTunes, etc.
This is a wake-up call to notice how you are accustomed to letting a few dollars here and there take a bite out of your budget.
My husband and I had gotten into the habit of shopping quite a bit on Amazon.com. We had a no Amazon.com month, and it helped break us of the habit of multiple orders per day.
If you only start with a No Spend Day, try to increase your time to a couple days, then a week or month. It is good training on resisting impulse buys. It can also show you how much you can save if you buckle down.
What if you can’t commit?
If you are having a hard time committing to a no spend day, leave your credit cards and cash at home and put yourself in a situation where you absolutely can’t buy anything. If you must, you could put a $20 bill in the glove box just in case there was an actual emergency.
3. Keep a splurge fund
Set aside an amount of money you are comfortable spending each month on fun items and put that amount of cash in an envelope. You will be able to see visually how much money you have left and how much you have spent.
It can help make you realize you don’t want that $5 item in the checkout line or that you do have the money for something you want.
4. Daily spending calendar
Get a monthly calendar and stick it somewhere you will see it daily. You could put in on your refrigerator, your bathroom mirror or your home office.
Daily write on the calendar the amount of money you have spent.
One couple realized they were spending over $1,000/month eating out. They didn’t even eat at super fancy restaurants. It was that they bought food over 60 times a month at inexpensive places, take out, morning coffee runs, etc.
See how many zeros you can get on your monthly calendar.
5. Join an accountability group
Join a Facebook group of similarly minded people. You can also find financial groups at your local community center, church or meetup.com.
Getting on a budget, spending less, and planning for your future can seem overwhelming and having a group to answer questions and cheer your successes can make all the difference.
Ask others how they reduce the urge to splurge and post about your personal goals and challenges.
Financial fitness is like physical fitness in that you can be influenced both positively and negatively by those who surround you. Surround yourself with people who will help impact your financial fitness positively.
6. Use the envelope system
I’ve saved the best for last. Going on a cash budget using the envelope system is the quickest and easiest way to stop spending too much.
Why? Because you can only spend what you have available in cash. Using the envelope system makes you a smarter and more thoughtful spender.
If you limit yourself each month to $500 to eat out, you quickly learn to watch your spending each day to avoid running out of money. Try it out – it’s the single best way to avoid overspending.