Get Control of Impulse Purchases

With these five simple steps, train yourself to hold back on buying things you don't need.
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Impulse purchases kill budgets.

Adopting changes in the way you shop can help make impulse purchases disappear. Sometimes a completely different approach is what you need to achieve the results you want.

Many people have decided they want to rein in spending due to current economic conditions, but they often find it's more difficult to accomplish than they anticipated. Even though they know they shouldn't be spending as much as they are, they have fallen into a habit that is hard to break. Here are five simple ways to reduce the amount of impulse purchases you make.

Price it in work hours

: Many people buy things because small price tags don't seem like much. What is $5 here or there? Instead of looking at the price of something as a dollar amount, switch your thinking to what it costs as a part of your earnings. Take the item's price and convert it into the number ofhours of work it takes to purchase.

This is easy to do. Calculate your take-home pay and divide it by thenumber of hours you work. Don't use your yearly salary. A simple examplewould be that if your take-home pay is $2,500 a month and you work 50hours a week ($2,500 divided by 4 weeks divided by 50 hours), yourhourly rate would be $12.50.

You can then convert the price of the things you buy into the numberof hours it takes to earn them. Is that movie worth an hour of yourwork time? Are you prepared to work two days for that piece of clothing? And the latest gadget? By considering how longyou have to work for each of the items you want to buy instead oflooking at the price, it will make you stop and consider whether thepurchase is truly worth the price.

Set goals

: A lot of times people buy on impulse because they haven'tfigured out their personal-finance goals. Understanding how you wantto spend your money can make it much easier to resist impulse spending, because you are working toward something you want. Maybe it's tohave a down payment on a house, to afford a trip to visit friendsor to build an emergency fund.

Remind yourself

: A lot of impulse purchases occur because you seesomething you want and fail to take a moment to think whatthat purchase is taking away. That newspaper or cup of coffeemay only be a few bucks, but that adds up over the year. Placing a reminder of what you want to spend your money on can be the little jolt you need. Place your credit card in a sleeve or put a paper band aroundyour cash with your financial goal written on it.

Choose your payment form wisely

: Different people have certain payment forms that make it less likely that they will spend money. Some peoplelook at cash and make an effort not to spend any of it while othersknow it will fly out of their wallet as soon as it enters. Some peoplehave an aversion to spending on credit cards because of the fear ofgoing into debt while others see it as free money and take it outwithout even thinking twice.

Use a list

: You have probably heard this recommendation a thousand times and probably still don't follow it. Lists take time andthought to prepare and it's easier to forgo the effort and just headto the store. It is exactly that thought and effort that make the listso effective in avoiding impulse purchases. It may take some time toget yourself in the habit of writing lists for shopping trips andstrictly sticking to them, but if you do, you'll find that yourspending will greatly decrease.

Jeffrey Strain has been a freelance personal finance writer for the past 10 years helping people save money and get their finances in order. He currently owns and runs