Lending Club Blog

Spending Less in Two Easy Steps

Reducing our finances to their simplest form, we are left with income and expenses. Increasing income is often time consuming and somewhat out of our control. That leaves expenses as the variable that can be changed to improve our finances. If you are looking to spend less, try this two-step plan before making any large purchases.

Step 1: Write down why you want to buy something

If you can’t fill out a piece of paper with your reasons for making a purchase, then you probably don’t need the item. Try to be as specific as possible. A reason like “It will help me to live a more productive lifestyle because of …” Is a better reason than “It’s cool so I want it.” See how many reasons you can come up with. If you have reasons against the purchase, you can write them down as well. Having more than one or two reasons against a purchase probably means that you already know that the item is unnecessary.

Step 2: Wait a week before buying

After a week, review your list. Add or subtract from the list as appropriate. You may miss out on a sale as a result of this method, but that may allow you to take another reason off your list. “I want to buy it because it’s on sale” isn’t a good reason for making a purchase to begin with. If you are still convinced that you should buy the item at this point, then go ahead and buy it.

While these steps can help you to make smarter purchasing decisions in the future, they won’t help with poor decisions you may have made in the past. To help resolve those, you can try to consolidate your debt and get back on the right track.

Using the two step plan, you’ll probably find yourself much less likely to buy items that you really don’t need. Both steps help to reduce impulse buying by adding gates between you and the purchase. Those items that do make it past both steps will leave you with a satisfaction that overspending could never hope to provide.

Thursday, April 10th, 2008 at 10:35 am

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