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Am I Spending Too Much? 6 Ways to Rethink Your Spending Strategy.

| February 13, 2017
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Generally, if you’re asking the question, the answer is probably yes. You’re not alone; this is one of the most common issues that arises when I meet with clients.  It’s easy to spend more than you want, and hindsight can be painful when you review what you’ve been buying with a clear head.  However, there are ways to address overspending that don’t involve total wallet lockdown or hiding in a cave.  Here are 6 ways to recalibrate your expenses.

Start with Why.

For some, overspending is simply a habit of convenience and a little awareness can resolve the issue. For others (like me!), it’s a deeper issue.  After years of not having financial security as a kid, I always craved the safety and security that I thought earning more could bring.  Ironically, I also became attached to what I saw as symbols of financial security (buying nice clothes, not checking prices, traveling), and those symbols were actually undermining the very security I sought.  Check in with yourself to see what motivated the last five purchases you wish you hadn’t made (or you could’ve done without).  This is where the next step comes in handy.

Keep a journal of some sort.

I hate this part. Not kidding.  I remember reading women’s magazines growing up and always seeing that annoying bullet point for dieting: “Keep a food journal and write down everything you eat.”  Ugh, I would think, who actually does that?!  Sometimes the things that we pull away from are what we need to do the most.  Try to keep track of what you’re spending, and really try to check in with your mindstate when the spending happens.  Are you hungry at Whole Foods?  Did you just accomplish a goal and do some celebratory shopping?  Did you get into an argument with your significant other that prompted an online trip to Bloomingdales? 

Keep Two Talismans.

The word talisman might sound a little new-agey, but hear me out. I have two that I hold onto.  One is a Burberry trench coat.  I wanted one for a long time, and I’ve always loved them.  When I reached an earnings goal that I had internally set for myself, I want to the store and bought myself the exact trench I wanted.  That was 6 years ago, and I still wear it all of the time.  I have zero regrets over buying that coat: I was in a calm place, I had researched what I wanted, and I knew that I would love it for as long as it would last.  I keep that coat in mind as a symbol of the types of purchases I really want to make.  Then I have another talisman: an Alexis Bittar rose gold cuff with crystals.  It’s really pretty and shiny (I love Alexis Bittar jewelry, this has nothing to do with the brand), and I picked it up and bought it without thinking on a credit card and didn’t pay it off immediately.  I bought it 4 years ago and I’ve worn it out once.  With interest, I don’t want to think about how much that bracelet really cost.  Think of your own symbols of mindful spending you’ve truly benefitted from and ones that make your stomach a little queasy, and try to keep them in mind when you’re tempted to whip out your MasterCard.

Make your List.

My daughter’s 529 plan. My retirement. Improvements to my kitchen. A trip to Italy with my partner and my daughter. Extra riding lessons.  Those are the top places where I want my money to go right now.  Notice that those places might not be the textbook “perfect” locations (many planners would argue that I shouldn’t be spending money on trips and I should be socking away money into an investment account).  Make a realistic list of priority places where you want your money to go and ask yourself: will putting money into these goals or expenses make me happy 5 years from now? 10 years from now? 20 years from now?  Once you’ve got your list, keep it with you and look at it regularly.  When you go to make a purchase, ask yourself: does it fall on my list?  If not, is it worth it to contribute less to these places so I can have this [insert whatever it is you want to buy]? 

Stop Being Mean.

You screwed up. You had your list, you have your symbols and have your game plan.  Then you buy something or sign up for something that wasn’t in your plan. Don’t beat yourself up.   It won’t help you, and if anything, being cruel to yourself for overspending can actually lead to more overspending.  Dust yourself off and start over again. 

Turn it around.

EBay it. Really.  I sold a great leather jacket (somehow the gorgeous camel moto jacket didn’t seem as great when I got pregnant and envisioned spit up on the lapels), an adorable handbag and a really cute dress on EBay and recouped some of my regret money.  I then paid down my credit card with the proceeds.  Shop through your closet (enlist a friend for objective help) and see what you can resell.  There are tons of sites out there dedicated to reselling clothes and other items, and while you may not get all of your money back, it’s a start.

Like any habit that needs adjusting, it’s always helpful to get professional help. Our firm frequently works with our clients to identify ways they can use their money more effectively, and we make it a point to focus on how we can move forward without the guilt and other baggage that comes with making big changes in your life.  When you have a good support team in place, it’s amazing what you can do!

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