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Understanding and Controlling Your Spending Habits


What makes you spend money? Do you begrudgingly spend your money, preferring to hold onto it? Do you get excited buying something? When you see something you want, do you impulsively go and buy it, take a minute to think it through, or are you hesitant to buy it? 

There’s a lot that goes into making a purchase, and the better you understand yourself, the more control you’ll have over your spending habits. This can be helpful for people who struggle to stick to a budget, but also people who fear spending any type of money, even on important items. We’ve got some ways to better look at your spending habits and better understand them.


Track Where Your Money is Going

young woman holding a shopping bagsWhether you have a budget or not, you should be actively tracking where your money goes every month. That includes paying bills, buying groceries and everywhere else you spend money.

This information is vital for understanding your spending habits. There are a couple of ways to track this information. You can keep all receipts and bills you get during the month and put them into a spreadsheet. If that doesn't sound fun, you can utilize an app that connects to your bank accounts that gathers that information for you.

You should also track what tools you’re using to spend money. Does most of it go on a credit card, debit card, or cash? Are you less likely to spend with cash versus a credit card you pay off later? All important information to gather, especially over several months.

If you really want to gather data, keep a journal while gathering this data. This can give insights on your mood, situations, and external factors that could lead to why you spent money.


Analyze the Data and Look for Trends

young black woman writing stuff down and looking at a computerNow that you have data about your monthly spending habits, you need to now look for trends. Are there certain times you spend more? Are there activities that lead to higher spending? Do you spend more money directly after getting your paycheck or at the end of the month?

This analysis is key for understanding what drives you to spend money. Some people buy things when they are sad, others only when it’s absolutely necessary, and even others that feel a constant need to be buying something. Before you can change and improve your spending habits, you need to understand what drives you.


What are your Spending Triggers?

woman with lots of shopping bags smilingThere are psychological triggers that can influence your spending habits. This can include deciding to buy, not buy, and impulsive buying. By looking at the data and trends, identify what might trigger spending money.

A common spending trigger for many is spending time with others. When being around other people, many are more likely to spend money on non-essentials. This could include spending money at restaurants, shopping for clothes, or other items and experiences. This isn’t necessarily bad, but a common trigger that if not controlled, could lead to less available funds.

Take a hard look at yourself and try to determine what pushes you to buy something. Are you trying to fulfill a need or desire? Are you more likely to spend money after a hard day at work? Are you more free with your money in certain scenarios? With that information, you can truly take control of your spending.


Avoid and Control Your Spending Triggers

woman wearing a mask shoppingOnce you understand your spending triggers, you can start to control or utilize it. As you shoot to reach your budget or savings goal, your triggers can be the difference between reaching or failing it. Here’s a few pieces of advice on controlling your spending triggers.

First, avoid situations where your spending triggers can occur. If one of your spending triggers is seeing cute clothes at the mall, avoid going to the mall. If you spend money when you are sad, don’t let yourself go shopping when you’re feeling down. 

Second, if spending is unavoidable, but you want to reduce the impact on your wallet, give yourself strict rules and barriers to spending extra. If you’re going to a store to buy a single item, limit yourself to just that item, nothing extra. If you have to do grocery shopping and need to stay on budget, list out everything you need ahead of time and only get those items. 

A final piece of advice is to make it harder to spend money. You could use the myPioneer Card Companion app on your phone to pause your debit and credit card when not actively using it. The app lets you suspend the card, making spur of the moment purchases harder. You unpause the card when you go to the grocery store, then repause it after you pay. Another way to make it harder to spend money is to have somebody you are accountable to for your spending. This is someone you have to talk about purchases with and explain why it’s needed. The person you have to talk to could be a spouse, a friend, or a family member. This person could help advise you to avoid purchases, and being accountable to them will make you think hard about every purchase.


Monitor and Change as Necessary

Once you make a plan to control your spending, keep monitoring your efforts. You’ll likely see some improvements the first month, but you might find yourself going back to old habits after a while. A regular re-evaluation of your progress is essential to making lasting changes. 

After the first month of changes and controlling your spending triggers, look at your results. Did your spending decrease? Did you cut those unnecessary purchases caused by spending triggers? Make new plans and changes if you don’t see the desired results.

Do this evaluation monthly, at least at first. This can help you create new spending habits and make controlling your spending triggers part of your daily routine. If you find yourself slipping after a few months, make the necessary adjustments.

If you want to learn more about why you spend money the way you do, check out Pioneer’s webinar all about the psychology of spending. It’s full of helpful information on how to better understand yourself and save money!

Watch the Psychology of Spending Webinar

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