Have you ever felt a bit remorseful after making a purchase? Have you felt guilty because you splurged your money on something? Have you ever made an impulse purchase that you regretted later? If so, you’re certainly not alone. The reality is that most of us have experienced such feelings at one time or another.
One of the key reasons people end up purchasing something even though they don’t necessarily need it is because of an impulsive decision. If you were to pay close attention to your finances, you will be surprised to see how much money in total you may have spent due to such impulsive decisions.
In this MoneyTalk, we will talk about “how you can leverage the 30-Day Rule to control spending caused due to impulsive purchase behavior!”
If you really want to save or conserve your money, it is extremely important to use strategies to manage your emotions when it comes to shopping, especially with impulsive shopping. One simple way to achieve this is to implement the 30-Day rule.
Let’s understand in detail how this 30-Day Rule works and how it can have a big positive impact on your personal finances.
The 30-Day Rule is a simple money-saving strategy that can help you curb impulsive spending. This spending rule essentially talks about restricting yourself from making an impulsive purchase decision. The basic idea is that whenever you are about to make a purchase, take a pause and wait for 30 days before making that purchase. This includes purchasing items such as a new car, furniture, electronics, and even vacation packages. This 30-Day pause will give you time to decide if you really “need” or “want” the item that you wanted to purchase. By the end of that 30-Day period, you will know if you want that item or if it was just a momentary gratification that you were seeking with that purchase. The 30-Day rule develops patience and self-control in one’s shopping behavior. Utilizing this simple rule as many times as possible for your major purchases will help you save a lot of money over time.
Aside from this, you will gain discipline when it comes to spending. This rule will help you get a handle on your spending and saving habits. The 30-Day rule is delayed gratification. This resolute delay provides you time to distract yourself instead of focusing on the item that you wanted to purchase impulsively. The 30-Day rule works because you aren’t actually denying yourself that gratification but merely delaying it.
The 30-Day rule is important because it helps prevent impulsive purchase decisions that can lead to debt and financial problems. When you make a significant purchase on impulse, you may not be thinking about whether you can really afford that purchase. This impulse purchase can lead to credit card debt, which can be challenging to pay off. By following the 30-Day rule, you give yourself time to think about whether or not a purchase is really necessary. Once you are past the 30-Day mark, you can see if you still have the urge to purchase the item or not. If you still want to buy it, you should go ahead and buy it confidently. It would be clear by now that you are not making an impulsive decision, but are making a responsible and informed decision. This purchase delay, however, may also help you realize that you no longer need that item and thus can help you avoid debt and save money in the long run. If you are trying to get out of debt, build savings or simply improve your finances, the 30-Day rule can be a very impactful strategy.
The 30-Day rule is a great way to save money by avoiding impulse purchases. By waiting for 30 days to make a purchase, you will often find a cheaper alternative or eventually simply decide that you don’t need the item after all. This technique can be applied to both big and small purchases.
For example, if you’re considering buying a new car, wait for 30 days before buying that car. If you’re considering getting a new pair of shoes, wait for 30 days before purchasing those shoes.
And at the end of the 30-Day period, you may have arrived at the conclusion that instead of buying a brand new car, it is better to purchase a certified used car or even continue using your current car. Waiting a bit longer will also give you a chance to improve your credit score and if you do end up buying another car, due to the improved credit score, you may now be eligible for better financing options such as lower interest rates.
Life is full of choices, and most of the time, we want what we want when we want it. This is especially true when it comes to making impulse purchases. Whether it’s a new pair of shoes or the latest gadget, we often make decisions based on our emotions instead of logic. And there’s nothing wrong with treating yourself occasionally. It’s important however, to distinguish between your needs and your wants. A “need” is something that you cannot live without, an essential item – a necessary item for your survival. While a “want” is something that you would like to have, something you desire, you can live without it as not having it will not impact your survival. So, whatever you are planning to purchase, you should think analytically and identify if that item is a need or a want. Now, if you arrive at the conclusion that the item you are planning to purchase is a “Need”, then go ahead and make that purchase. But, if your conclusion is that the item is a “Want”, then hold on to making that purchase and follow this next step.
When you have the urge to spend money on something that’s not a necessity and is a want rather than a need, do not make that purchase immediately, but wait for 30 days before making that purchase. Count as Day 1 when you put a brake on making that purchase. Mark that date in a calendar or in a calendar app. And, then 30 days from that Day 1, revisit your decision and make that purchase if you still want that item. However, often you’ll find that at the end of this 30-Day period, your original impulse of making that purchase has passed and you may not even want that item anymore. By now you have now outgrown your impulse and have actually saved money by not making that purchase. In some cases, if you still want to buy that item, chances are that you may have found a cheaper alternative that saves you money over the original purchase amount.
The key challenge with this strategy is that it is not always easy to stick to the 30-Day rule. As humans, many times, we find it extremely difficult to control our urges. This rule requires you to be disciplined and mindful. You have to keep reminding yourself why you are doing this – to improve your financial life by curbing spending and increasing savings. If you find yourself struggling to wait for 30 days, try setting a smaller goal as the wait time, such as 14 days or 7 days. You may also want to set a limit on how much you are willing to spend on each item. This will help you stay within your budget and avoid impulse purchases. Whatever method you choose, the important thing is to be mindful of your spending and make a genuine effort to save money.
Let’s summarize what we have discussed so far. In today’s MoneyTalk, we discussed how you can leverage the 30-Day Rule to get control over impulsive expenses. We talked about the following:
What is the 30-Day Rule?
What is the Importance of the 30-Day Rule in Improving Personal Finances?
What are the Advantages of the 30-Day Rule?
What are the Key Steps in Applying the 30-Day Rule to Control Spending and Build Savings?
What are the challenges associated with the 30-Day Rule?
As discussed earlier, the 30-Day rule is a great way to save money by avoiding impulsive purchases. By waiting for 30 days to make a purchase, you may often find a cheaper alternative or simply decide that you don’t need that item. This technique can be applied to both big and small purchases. Utilizing this simple rule as many times as possible for your major purchases will help you save a lot of money over time.