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