2. When you get a cash windfall.
Don’t spend your tax refund before you get it. In fact, maybe don’t even spend it then, advises Solomon. The IRS says that, on average, we get a refund of about $3,000. And months before that refund lands, we’re flooded with ideas about ways to spend it: vacations, cars, building a new deck, replacing the washing machine. Unless you make a plan to save or invest all or a part of it, that money won’t be around long enough to gather dust.
When you get a windfall like a bonus or a tax refund, a good rule of thumb is to put 90 percent toward your financial goals and 10 percent toward something fun.
Tip: Understand that, although a tax refund may feel like free money, it isn’t. The federal and state governments are reimbursing you for money you overpaid them by having too much withheld from your pay. Consider having less taken out next year. While the government has your money, it uses it, and it doesn’t pay you any interest on it. Instead, bring home a little more each paycheck and put it in a savings or investment account. If you are getting a refund, you’ve actually lost out on potential earnings.
3. At the end of a crappy day.
Most of us start out strong in the morning and get pummeled by life’s little stressors all day long. The boss yelled all morning, then you needed to ask the creepy building superintendent to let you back in your apartment because you couldn’t find your key. Wiped out, you stare at the collection of condiments in your refrigerator and wonder if ketchup really counts as a vegetable.
Yes, you’ve had a crappy day. And by 8:30 p.m., you’re in bed, abandoning the effort to find something on Netflix and ordering multiple pairs of shoes on Zappos.
Solomon says you just fell into the HALTS trap ― her acronym for when you are hungry, angry, lonely, tired or scared. They’re when you are at your most vulnerable for blowing your budget on unnecessary things.
Tip: When you get under the sheets, leave your electronics in the kitchen. Bring a book to bed with you. Nobody ever overspent while reading a book.
4. When you’re under the influence.
Drinking alcohol and smoking marijuana can lower our inhibitions and lead to poor decisions. A Finder.com survey found that almost half of Americans who regularly drink alcohol each week also make spontaneous purchases while drunk. The 3,123 people surveyed showed a wide range of purchases, with clothes topping the list.
The average cost of drunk spending? $206.
Never put credit card information on your phone, and hide your credit cards when you start drinking, Benson said.
If you are out drinking with friends, know that the words “next round on me” are generally spoken somewhere around the third, Solomon said. Don’t be that guy.
Tips: Remove shopping apps from your mobile devices. If you continue to hear the sirens’ song, you can also block tempting websites during certain hours. The Freedom app or the Chrome extension StayFocused may help.
5. Around holidays.
Christmas, Valentine’s Day, your birthday and other holidays are some of the most difficult times to rein in your spending, said Benson. That’s because of the unrealistic, unmet expectations that come at these times of year. Many of us feel lonely and turn to shopping to make us feel better. To be forewarned is to be forearmed.
Tips: Volunteer to stay connected. Check out Dosomething.org, which sets you up with volunteer opportunities right in your neighborhood. Find groups with common interests, common challenges or, better yet, both. Take a hike or find another way of exercising; it releases all those feel-good chemicals in our brains. “Being around others, avoiding social isolation and trusting in nature are what it’s about,” Benson said.
6. When you only have to click to spend money.
Those one-click checkout features are nobody’s friend, said Benson. The time it takes you to type in all your credit card information may be all it takes to realize that you don’t actually need 96 rolls of toilet paper, even if the shipping is free.
“The pain of paying is a concept,” she said. “Using cash causes the most pain; one-click ordering is the least.” Using a credit card anesthetizes the pain. When you pay cash, you see it and feel it.
Physical proximity can do you the same disservice. When meeting someone for lunch, go to a free-standing restaurant instead of one at the mall or where shopping is easily accessible. And take only enough cash for what you plan to spend.
“Leave the credit card at home,” Solomon said.
Still need more troops for reinforcement? Benson offers a program in which you will receive daily motivational texts cautioning you about shopping. You can also text the program’s help line 24/7 if you find yourself standing outside a store or poised to hit the “place order” button.
Tip: Use cash. It hurts more. Unsubscribe from your favorite shopping sites and apps, because limiting your accessibility works.
7. When you’re already making a big purchase and your sense of scale is thrown off.