Corralling the Impulses
One of my friends, frustrated with his continual debt, reached out and asked a practical question: "How do you stop overspending?" Despite a fantastic income, he and his wife have ebbed and flowed in and out of credit card debt for nearly two decades. They are frustrated. They are tired. They are stressed.
"Just stop overspending." See, simple! But simple doesn't mean easy. We humans have some flawed wiring that makes it difficult to not overspend, and our modern-day culture encourages negligent behavior.
Some will read this post and want to slam their head against the wall repeatedly. Others will deeply relate. That's how polarizing this topic is. It's common sense not to overspend, but at the same time, our impulses lead us down that road.
At the risk of being nicknamed Captain Obvious, I'm going to share a few simple steps that can make a tremendous difference in our battle with overspending. Here we go!
1) Remove debt as an option. If debt is an option, be it credit cards, car loans, or any other types of consumer debt, we WILL use it.....eventually. We can say no 1,000 times, but that 1,001st time, our desires will get the best of us. I'm a huge advocate for structuring our life so that debt isn't even an option. Yes, I'm suggesting that people live without credit cards.
2) Have a plan. It's inevitable that our impulses will kick in. Again, we're human. One of the best ways to combat those impulses is to have a plan.....and stick to it. With money, that looks like a budget. A budget is just a vomit-inducing word that means we pre-decide where our money will go this month. It doesn't mean we'll spend less, but rather we'll spend what we said we will spend. We can budget $500 on dining out, which means we can (and should!) spend $500 on dining out, but we're not allowed to spend more than $500 on dining out. Following the plan keeps us accountable to our past selves who made the plan.
3) Understand the double-edged sword. Can we all agree that spending money feels good? That new pair of shoes. A state-of-the-art phone. A nice steak dinner. It can be euphoric! However, when we're in the moment of soaking up every ounce of that post-spend dopamine, we're not thinking about the other side of the equation: the stress, tension, guilt, and turmoil we'll soon endure from yet another act of overspending. It feels good in the moment, but the longer-term financial strain we put ourselves through more than negates the upside.
4) Know your why. While that new iPhone is pretty sweet, and will most certainly add value to your life, does it align or conflict with your bigger goals? If we can clearly define what your objectives are, it helps us make better decisions that align with those goals.
We deserve better than to live a stressful, tension-filled, guilt-ridden financial life. Find simple ways to regain control and corral your impulses. Future you will thank you for your service.
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