Wait no more and take up the 30-day money challenge. As you refrain from impulse purchases, saying no to frivolous spending in the future only becomes easier.
Whether it’s a shiny bauble you see in the store window or a lightning deal online, you may tend to splurge unknowingly and a little too often. It is only later that you may realise that you have purchased something you want and not something you need.
Worse still, you may also come to recognise that you no longer even want the thing you have bought on a whim, and relegate it to a dusty corner of your home or workplace. Irrespective of the size of your pay cheque, impulsive buying can harm your finances in the long run.
For instance, you may set your eyes upon a piece of jewellery costing `30,000 and decide to buy it for yourself. While this may seem like a steal deal with a discount or other offers, you could have put the same amount to better use.
Consider a situation where you may have an outstanding personal loan of `2 lakh with an interest rate of 17% and remaining tenor of 24 months. The EMI for this loan amounts to `9,888. A part prepayment on the loan instead of the jewellery purchase would have saved 15% of the current EMI and reduced your tenor to 20 months. Isn’t that a worthwhile saving?
The 30-day money challenge
The 30-day money challenge is all about tamping down your impulsive spending urges and evaluating if you actually need what you’re tempted to buy right away. By following the rules religiously, you can surely get over splurging and secure your finances. Look at the easy step-by step guide to acing the 30-day challenge below.
One: Every time you see an item you would like to splurge on, refrain from buying it. Two: Instead, write down the name of the item you wish to buy and the date you considered purchasing it on. Three: Give yourself 30 days to think about the purchase and do not make a purchase for the listed items until 30 days have passed. Four: After waiting for 30 days, re-evaluate your need or desire for the item. Five: Buy the item only if you actually need it. If you simply want it, buy it only if you can afford it without the help of credit. This way, you can reign in your temptation to splurge. Why is this so important?
It helps you save
Following the 30-day challenge helps you cut down on expenses, thereby saving for things that matter and add value to your life. For instance, it can help you save towards important goals like buying a home, gifting a travel package to your parents or taking up a professional course that can increase your pay scale.
This challenge helps you inculcate a habit of distinguishing between mere urges and actual necessities so you can learn to make smart purchases. This way, you can keep a tab on your spending and save more. With these savings in hand, you can now invest more to grow your wealth.
It helps you tackle emergencies
The very nature of life is unpredictable. Thus, it is very important to maintain liquidity of funds to meet emergency needs. Once you keep a tab on your frivolous spending, you will have enough funds saved up for emergencies. This way you will be able to tackle urgent expenses without financial strain or via expensive debt.
Finally, you enjoy a sense of freedom once you master the 30-day challenge because you are no longer a slave to your impulsive spending behaviour. Instead, you can now take control of your finances and make meaningful decisions. Wait no more and take up the 30-day money challenge. As you refrain from impulse purchases, saying no to frivolous spending in the future only becomes easier.
The writer is CEO, BankBazaar.com