Did you just spend $5000 on that new 55” LED Smart TV?
Keeping up with the latest trend, fashion, or technology is very tempting. While it feels awesome to be one of the first ones to own it, we both know, it could have cost you less than what you paid for if you waited for an extra few weeks or months.
Impulse spending stops us from contributing to our emergency funds, which can add unnecessary stress in an event of a crisis. A new poll conducted by CIBC found that 45% of Canadians have no emergency savings. 1
Because of our fragile economy, smart spending has never been so important. Everyone is guilty of purchasing items that they don’t need because when they use their credit cards, they are spending money that they don’t see. Many Canadians share the same weakness when it comes down to spending, specifically impulse spending.
We often purchase unnecessary items and soon they begin to take a toll on our bank account. Luckily, we’re here to help. Here are five simple tips to control impulse spending:
- The first step in tackling any addiction is acknowledging that you have a problem.
- Second, you must make a budget of what you have and what you can spend and stick with it.
- Third, make shopping lists. A list will keep you on track and will prevent you from straying to that big sale on Twinkies!
- Fourth, use cash rather than credit cards. It will remind you of the dent you are making in your wallet each time you make a purchase.
- Fifth, shop smart. Buy items you will always use (i.e. toilet paper) in bulk, use coupons, look out for deals and sales, and most importantly, do comparison shopping. If you compare the price of items across different stores, you can ensure you get the same quality for the cheapest price.
- Sixth, and finally, keep a spending log. It can serve as that heart-attack inducing credit card balance before the actual statement arrives. Make sure to compare your spending log to your budget to identify where you have strayed or wasted money.
Learn to recognize wants from needs and practice controlling your impulses; this will help you change your spending habits. Being financially savvy will help you save for the things that really matter rather than your indulgences.
1 CTV News, 45% of Canadians unprepared for emergency spending. Retrieved from http://www.ctvnews.ca/business/45-of-canadians-unprepared-for-emergency-spending-1.911840