There are 1,001 different ways that our behaviors and impulses can break our budgets. From forgotten subscriptions to impromptu nights out that you “just can’t miss”, it seems like the temptation to spend can come anywhere, anytime.
We call this type of impulsive spending “autopilot” spending, because the desire to spend is automatic. It’s not a purchase made with intention, it’s a purchase born out of a long-term habit where the default response is “yes” when it should be “we’ll see”.
In part one of this series, we learned how to categorize and track all of your ongoing expenses. Now in part two, we’ll show you how to rethink your spending approach and reduce autopilot spending. In case you missed it, don’t forget to check out part one here.
Allowance
Now that you’ve seen how much autopilot spending can eat out of your budget, it’s time to cut back. To do so, we recommend reserving a set amount of money each month for autopilot purchases. Think of it like an allowance for all of your treats, takeout, and other “fun” purchases.
But once the allowance is gone? It’s gone. You’ll have to wait until next month to spend frivolously again. This approach helps to put more weight on your autopilot purchases—do you really need that cappuccino when you only have $15 left of your allowance? Or do you want to save that money for something you really want?
Still Need It?
Another area of autopilot spending that is truly automated is recurring subscriptions. With your tracked expenses handy (from part one of this series), we encourage you to review your subscriptions and ask yourself if the service is still needed. If your gym membership or streaming service is gathering dust, then it’s time to stop paying for something you don’t use. The extra coin you’ll get back can be put to better use elsewhere.
See the Pattern
As you continue to monitor spending patterns, you’ll be able to see the progress you’ve made (not to mention the extra money in your accounts). Active tracking serves as a visual reminder that can help keep your habits in line with the outcomes you’re looking for.
Wondering what else you can do to take control of your financial life? Financial Game Changer, the latest book from author and financial advisor Lynn McCarty, offers simple, practical tips to help you shrink your financial worries, gain financial confidence, and build lifelong money habits to make you feel more secure with your finances.
You’re already on your way to financial freedom. The next step is to purchase Financial Game Changer, available at any of the following digital stores:
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