You suddenly feel a sense of dread, as you think back to that expensive sushi dinner and your impulsive shoe purchase at the beginning of the month. No matter how well you try to budget each month, you almost never manage to feel confident about reaching your financial goals.
Let’s be real: even if you set a budget, it’s pretty hard to control spending when the impulse to buy hits. In fact, millennials are 52% more likely than any other generation to make impulse purchases. (Time) How can we improve our spending in a way that actually works? We’ve gathered 4 tips and tricks to boost your spending habits, backed by our favorite behavioral economists.
1. Know the worth of a dollar
Picture this: you’re waiting in line at the supermarket with your cereal and bananas in hand. Suddenly, a sale catches your eye – two bottles of wine for the price of one! It seems like a pretty good deal, but then you remember it doesn’t fit into your budget.
When making a purchasing decision – especially an impulsive one – it’s difficult to imagine exactly what you’re giving up.
In other words, it’s hard to understand the opportunity cost, in behavioral economics speak. In the moment, you probably won’t realize that buying two bottles of wine means less money to spend on going out with friends later.