Time for A Financial Reboot?

Hi Reader,

Welcome to The Money Series and if you are new here, thank you for signing up. Personal Finance can feel ambiguous and overwhelming, but I am here to help simplify the journey.

Last week, we explored strategies to curb impulse shopping and embrace intentional spending. I recommended a No-Buy Challenge as a way to overcome mindless spending. Today, we’ll dive deep into what a No-Buy Challenge truly entails.

What is a No-Buy Challenge? A No-Buy Challenge is a commitment to not purchase specific items for a set period. This is especially important if you recently splurged on those items. It’s not about depriving yourself entirely; you will still buy your essentials and satisfy your basic needs.

The goal is to help you save money by spending less on certain pre-determined items. Think of it as a way to regain control over your spending, especially after a recent splurge. For example, if you recently splurged on homecare or kitchen essentials and are prone to splurging on these items, you can decide that for the next 6 months, you will not buy any kitchen essentials for which you have a substitute at home.

How to Start Your No-Buy Challenge

Create a list of No-Buy items. Here’s an example of a detailed list that you can adopt. You can also create a personalized list by:

• Identifying your cravings. What do you frequently desire? Whether it’s satisfying your ‘sweet tooth' or owing the latest iPhone, understanding your cravings will help you identify what should be on your do-not-buy list.

• Tracking your spending to identify your spending triggers. As dreadful as it may be, you need to look at your bank statements to discover where you are spending the most and see how that compares with your values. Doing so will reveal patterns that might contradict your values.

• Ask yourself: What do I regret buying? Tap into your guilt to assess your negative spending habits. Guilt sometimes tells you where you’re spending money that might be against your values or not according to your real priorities. If you feel bad about certain items that you purchase, put them on your list.

Keep track of your emotional state during purchases. Are you shopping out of boredom or stress? You want to avoid using shopping as an escape from reality. That you are not shopping to try to solve some other underlying problems or overcompensate for something else. Keeping an eye on your emotions will help you understand how your feelings influence impulse buying.

Don’t be too strict. It’s ok to buy something on your No-Buy list if necessary. If you legitimately need something on your do-not-buy list, you should probably buy it if you can. For example, if clothing is on your list but you need a new outfit for a job interview, you should make an exception.

Make rules. Once the no-buy period ends and you can now buy some of the items on your list, you should make rules to avoid retracting to your old ways. One rule can be that you only buy items from stores with a return policy or if you love gadgets, your rule can be that you can only buy a new gadget if you sell the old one.

Mind the social media influence. If you do not constantly catch yourself watching Instagram stories or TikTok updates, you are already ahead of the pack in today’s terms because the bar is quite low. Limit exposure to shopping-focused content on social media. This can significantly reduce the temptation to spend.

Focus on Needs, Not “Someday” Items. Buy items only when you need them. Avoid purchases based on future aspirations, like gym clothes if you haven’t started a workout routine or clothes a size down that you hope to fit someday.

Your budget should mirror what matters most to you. For example, unless you’re in fashion or modeling, clothing, and cosmetics should not take up more of your spending than they should. Ideally, someone looking at your expenses should get a sense of your top values.

As always, I’d love to hear your thoughts and experiences!

Act Now:

• Think about a spending category that you have recently splurged on

Reflect on This:

• Does the category above align with your personal financial goals?

Till next week, I am rooting for you, money-ly!

Dee

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