Finance Column: How to Curb Your Spending Vices

Spending vices. We all have them and yet most of still don’t even know we do. It could be the morning latte at the coffee shop, online shopping, Prada shoes, last-minute weekend getaways, or grabbing a cab instead of taking public transport. Spending vices are the those things we spend our money on even though we know we shouldn’t. Now yes, I agree we all need to splurge from time to time in order to live in the moment, but without healthy boundaries for our spending, these little vices can really add up and start to present issues in our financial lives.

Just like it’s not good to reach for the extra bowl of ice cream every night after dinner, it’s not good to let your spending vices take control over your everyday spending habits. Having a game plan will help you identify any spending vices and ensure you set healthy boundaries for them. Here are some ways to identify, tackle, and control your spending vices.

1. Track your expenses for 90 days

This is one of the easiest ways to learn what your money is going every month. Carry around a notepad and pen in your purse for the next three months and every time you spend money, jot it down. Write down how much you spent and what you spent it on. Don’t forge to include online purchases. Yes, I know, maybe not the sexiest thing to do, but it can be the best tool to learn what is truly going on with your spending.

2. Analyze what you find

After 90 days, review your spending and analyze where your money is going. Do you notice any trends and over-indulgences with your spending? For example, let’s say you realize you spend $150 per month on random purchases at Target yet you didn’t allocate that much in your budget or spending plan. This may be a spending vice. Another example would be shopping. Women often find themselves shopping for clothes, shoes, work-out gear, or home goods on a regular basis and can easily overspend in this area without really even knowing it.

3. Remember balance is key

The point of identifying money vices is not to cut out all spending but to keep healthy boundaries for the areas that tend to get out of control. For me, it is Amazon.com. It is so easy sometimes to just click away and buy used books and electronics that before I know it, my Amazon spending for the month totals over $200! Now that I am aware Amazon is a spending vice for me, I make sure I allocate money in my budget for it but make sure I do not spend more than $50 per month. This way I do not feel limited yet excited that I can spend money on whatever I choice on Amazon.com.

4. Why it is important to control spending vices

Again, the purpose of identifying spending vices isn’t to cut all the fun out of life but really to make sure you are controlling your spending and able to save money for your financial goals. Without a clear game plan it is really easy to just spend our money and never have any money left over to save. But, as modern women, we need to make sure we are able to save for our future financial life, even if it is only $50 per month. Controlling our spending vices ensures we are able to save.

What are your vices? How have you managed to control them?

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This post was contributed by Brittney Castro, a Los Angeles CERTIFIED FINANCIAL PLANNER™ practitioner and creator of FinanciallyWiseWomen.com. Brittney Castro, CFP® helps create a financial road map for a woman’s different goals in life. She also educates clients on different options, enabling them to make smart decisions. She has a passion for educating individuals on financial topics and speaks for various groups and organizations. Brittney Castro is available for speaking engagements, radio and telephone interviews, and other media appearances. Connect with Brittney at www.FinanciallyWiseWomen.com. Brittney Castro is not affiliated with TheEveryGirl.com. Brittney A. Castro is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. California Insurance License #0F33895

Danielle Moss Alaina Kaczmarski Brittney Castro

Ksasek79

Well, every paycheck a set amount goes into our 401k and savings acct., the rest goes into checking. The bills get paid first from checking and we try never to touch our savings unless it’s an emergency. We have five people in our family who like cycling so it can be pretty expensive. I guess you could call it a family vice. Safety items like helmets and repairs come first. My vice, shopping on the Internet. I find a bigger selection than in stores, one of a kind items and less expensive then stores sometimes. This could be a little dangerous though seeing there is so much eye candy out there. I don’t like using credit cards but for internet shopping its a must. I set a budget for the month for Internet shopping and if I don’t use it I have even more the next month. I pay off the credit card every month. When my kids want something off the Internet, I take them to their bank , they withdraw from their savings and we get them a prepaid bank debit card to use. This way they see their savings go down and their money is on the card. They can only spend what they put on it and it makes them think twice about their purchases and it’s not just a piece of plastic. When I first started shopping the Internet I used the prepaid bank cards all the time, I think they are a great learning tool. And they make great gifts also!

http://www.facebook.com/brittney.castro Brittney Castro

Great to hear! I love the idea of taking your kids to the bank. Often times, kids do not even know what a bank is! All they see is Mom and Dad wipe out a magic card every time they buy something. Giving kids cash allows them the option to spend or SAVE the money. I advice clients to give kids cash and not gift cards as they promote immediate gratification. The kids have to spend the gift card at the store where they can decide to save cash.

http://www.blog.graceniu.net grace

this is a great article! thanks for the advice. a few of my spending vices include having coffee out (whether that be starbucks or a local coffee shop), buying beauty items (usually makeup and nail polish), and eating out.

i try to set myself a realistic budget for each category based on my previous spending — i started keeping track of all my spending a few months ago. the everygirl’s budgeting handbook pdf has also helped a lot!
http://littlelg.tumblr.com Lauren

This is fantastic!! After an expensive weekend with friends visiting from out of town, this is EXACTLY what I needed.

http://www.facebook.com/brittney.castro Brittney Castro

Great to hear! What will you do this week to monitor your spending?

instantphoebe

A percentage of my paycheck automatically goes into my 401K (I think it’s 7 or 8%, and it’s matched by my company to 6%), so after all that, I try to save 10% of what’s left. I’ve made a budget and calculated all the money I have left over, which I can spend on food (groceries and restaurants), clothes, gas (since I don’t spend the same amount every month), etc. Anything but the bills I know are going to come every month. I guesstimated my utilities.

All the girls with iPhones out there — I do the same thing as advice #1, but I use an app called SpendFree. I put in the amount of money I have left over to spend on anything, and with each purchase, I manually type in what I spent it on and how much. I can see how quickly my “spending” money is dwindling (or not) and decide to purchase additional items based on that. It’s been extremely helpful, because looking at my credit card or bank account doesn’t help — a lot of my bills go through both channels, so I needed something separate to help me delineate my spending money.

http://www.facebook.com/brittney.castro Brittney Castro

Love the app rec! I will have to check it out. I agree that we all need a system that pulls together ALL of our accounts and spending for the month. That is the only way to truly see what is going on.

http://twitter.com/KristinaMGulino Kristina Gulino

Such good advice! Money is one of those “secret” topics that we somehow let slip under the radar of inspection, so it’s awesome to bring it to light (especially those morning lattes)! Heard a great quote recently… “If you want to see where your heart is, look at your bank statement” – So true!

Thanks for the advice,
Kristina
Nook & Sea

http://littlelg.tumblr.com Lauren

I love that quote! I will definitely remember that next time I’m debating whether or not to buy something.
http://www.facebook.com/brittney.castro Brittney Castro

Yes, I use that quote in my workshops:
“If you want to see the type of person you are, look at your checkbook.”
It is so true. Often women do not spend in alignment with what is truly important for them and that can cause a lot of internal conflict now and in the future.

http://dreamgreendiy.com/ Carrie @ DreamGreenDIY

AWESOME advice.

To curb my frivolous clothes-purchasing addiction I recently made a very specific list of the clothes I NEED for spring – My shopping trip with said list was incredibly focused and felt more productive then shopping with no specifics in mind where I bought anything and everything that looked good. I am doing my best to learn the difference between “need” and “want.”(Definitely going to try tracking my purchases though, on top of making focused lists – Should be very eye-opening)
http://www.newlywife.com/ Emily @ NewlyWife

My favorite way to get a realistic view of my spending habits — because it’s so easy to justify spending outside of your budget and not think of it as hurting your saving plan — is to track my net worth every month. On a spreadsheet I track my credit cards, bank accounts, car and home value, etc. Especially if you’re saving up for something big, you’ll see how spending vices can keep you from reaching your goal in a timely manner.

http://www.facebook.com/brittney.castro Brittney Castro

Emily great work of tracking your net worth every month. I view it as our “financial report card.” We want to make sure we are moving in the right direction and slowly growing our net worth overtime.

Rocks Paper Metal

dum dummm dummmmm….. but ignorance is bliss? lol. The cabs and coffee definitely are 2 of my biggies!

http://www.RocksPaperMetal.comwww.RocksPaperMetal.etsy.com
http://shortisthenewblack.com/ Justine

My spending vice is definitely working at Nordstrom. It is really hard, although it sounds pathetic, to go to the bathroom without getting sidetracked looking at the new clothing we just got in. Thanks for the great tips!
Lesley

This is such a helpful article. I’m going to track my spending for 90 days and actually keep up with it!