To what lengths would you go to curb your impulse spending? Well, it depends on how badly you want to stop.
Remember the "Saturday Night Live" sketch in which Chris Parnell promotes a pamphlet that says people should not buy it if they do not have the money? He then repeats the same mantra several different ways. The advice is easy to say, but it's typically much harder to follow.
Must-have items can be a nasty, lingering temptation that does not go away. So spenders must find ways to deal with it.
"Never buy anything on impulse," said Dorothy Rosen, a CPA and former Dollar Diva for Bankrate.com in Palm Beach Gardens, Fla. "Make a wish list and you’re not going to make impulse purchases."
Without keeping splurges in check, they can snowball and lead to mounting debt. While the purchase may be instant gratification, it may take years to dig out from paying for it.
"We're big advocates of cash when making discretionary expenses," Brad Stroh, founder and CEO of Bills.com.
Stroh said that when a consumer puts down a credit card to pay for something, the person loses that tangible element of that expense. He said that if shoppers are paying with cash, they are seeing their hard-earned dollars leaving their hand to pay for something.
Stroh compared the concept of substituting cash to Las Vegas casinos. He said they give customers chips to hide the reality that they are using real money to gamble with.
Stroh also suggested using a debit card rather than a credit card. That way, the cardholder's spending is limited to the card's balance.
He added that people should keep a credit card for emergencies. But how to keep the credit card around for just that purpose and not buying the latest Jimmy Choos?
Stroh said to put the credit cards in a bowl of water and stick them in the freezer. Then the cards will be there, but buying that new pair of jeans would involve chipping away at the ice block to get to the cards.
Curbing shopping sprees may also be a matter of finding better things to do with spare time.
"Recreational spending seems to be a national pastime," Rosen said. "That has to stop."
She said that families don't have to make going to the mall a group leisure activity.
"Kids enjoy being with parents wherever they go," she said.
During holiday shopping times, some employers or banks offer a holiday savings fund in which deductions are taken and saved in an account to be used specifically for buying gifts.
Stroh offered another holiday shopping approach. He said he tells people to separate out cash into envelopes for each person they need to buy gifts for. That way the spending is limited to the amount of cash in the envelope.
Bills.com's free online budget guide points out that consumers should not apply revolving debt such as credit cards or loans to buy items that can depreciate over time, such as a car, because the loan's balance will outlast the item's value.
"If you're got an enormous amount of debt, my feeling is pay off debt with your current income, don't take out a home equity line of credit. Pay it off with today's dollars," Rosen said.
In other words, don't take out loans to pay off debt.
And if the occasional spree is what you need, budget for it. Set aside a small amount that you can use to treat yourself once a month. Just remember to stick with your predetermined spending limit, and don't go over what you have budgeted.
