41 responses

  1. MoneyforCollegePro

    Good words. The psychology behind spending is fascinating. In my own financial life, it does make sense to create mini-budgets for the expenses that I want outside of my normal budget. This allows me to make purchases without guilt or remorse because I know they were semi-planned, and I have the funds to cover them.

    • Money Cactus

      I’m a big fan of financial psychology myself. Sounds like you have it nicely sorted out though, a bit of planning goes a long way.

  2. Jeff @ Sustainable Life Blog

    I agree – if I want something, obviously I’m going to go out and buy it, but the key thing is when will I have enough cash to do that.

    • Money Cactus

      Exactly Jeff,

      No reason you should just flat out deny yourself, but you also need to approach it with a bit of though. Instead of ‘I want’ or ‘I can’t’ I like to ask ‘how can I?’ It’s amazing what you can conceive if you put some thought into it.

  3. maria@moneyprinciple

    I have always argued that we are getting the whole thing about needs and wants wrong. We, as humans, are defined not by our needs (these are usually simple and animal like) but by our wants. If we wish to deal away with remorse we have to tame our wants. Ironically, today I have been doing some reading on minimalism.

    I also have a ‘I’m so worth it fund’ and the rules are that this is fun money and it has to be spend every month – because I am worth it!

    • Money Cactus

      Love the sound of that fund of yours maria, I think it is exactly what you need in order to stay motivated and on track. Like the new banner design on your site too!

  4. Marissa @ Thirty Six Months

    I used to be an emotional spender. So a bad day = shopping. It was after taking a few psych that i realized that I was spending to displace whatever emotion I was feeling. Now I just examine my emotions to find the root cause. Saves me a lot of money.

    • Money Cactus

      Ha! I bet it does save a bit of money. It is really surprising how good retail therapy is, but if it is unplanned it can cause more harm than good. Examining your emotions is a great way to get to the bottom of things, buying to suppress feelings is quite a negative action, much better to buy to reward positive action instead :)

  5. MyMoneyDesign

    I have always struggled with buyers remorse for the same exact reasons you point out. I think too much about how hard I had to work to get up to the price of the item, or how long it would take me to make enough to cover that purchase. I totally agree with the allowance system. In fact, my wife and I are on the same program you mentioned!

    • Money Cactus

      The allowance system is a great way to kick off and keep you sane in the short to medium term. An even better alternative is to create alternative income streams that generate additional funds that you can use as you see fit. I don’t think this should include interest on savings or investments (that needs to be reinvested), but a nice little side hustle (like a blog) is a good way to go!

      • MyMoneyDesign

        Good call! It wouldn’t hurt to spend a little bit of extra income from my blog (if it ever makes any money!). LOL

  6. Louise @ The Reading Experiment

    I have a strategy to minimise spending that seems rather simple and obvious but is very effective for me – I try to avoid walking into shops unless I know I want to buy something and I don’t read fashion magazines. If I walk into a shop / read a magazine and see something I like I will convince myself that I can’t live without it. But if I hadn’t walked into the shop / read the magazine in the first place, I wouldn’t know it was there and be completely oblivious to the item I supposedly couldn’t live without!

    • Money Cactus

      Nothing wrong with simple! It’s amazing how good we can actually be at convincing ourselves of things. I often feel the same way and have to spend almost twice as long at un-convincing myself about the need for something I have taken a fancy to. As far as I’m concerned, I think that learning how to control your emotional intelligence is one of the best life skills that you can learn.

  7. Aaron Hung

    I just traded in my car for a lower milage car and had to pay a little bit of difference too and I too feel guilty afterwards because the old car was already paid for and now I have a new car payment. I’ve had the other car for so long and it was like an attachment of me so it felt weird. I need to try that $50 dollars a week with my wife hehe

    • Money Cactus

      Haha! $50 can be challenging for some people, but it is a great way to develop better money habits.

      Hope the car trade works out well. they can be a huge money trap, but if you made the decision consciously you just have to back yourself and get it paid off as son as you can.

  8. John | Married (with Debt)

    This is a great way to take the guilt out. I just wrote about Conscious Spending, which is essentially planning your spending in advance so that you do it right and without guilt.

    Pocket money is key to staying in the right mindset.

    • Money Cactus

      That is another good strategy John, it really is about approaching it with the right mindset

  9. Brian

    Just found your blog – love the content!

    I’ve tried using this type of budgeting previously, but had to readjust. I see a lot of live music and it’s not a cheap hobby. I was able to cut other monthly expenses (through pedantic tracking) and have budget in concert tickets outside of my weekly budget. It’s shocking how much money I’m able to save while enjoying shows more than ever (now that I don’t feel like I’m going broke!)

    Look forward to more posts from you!

    • Money Cactus

      Thanks Brian, good to see that you are using the money to enjoy a passion.

  10. Pam at MoneyTrail

    I like your approach and it works well with me too. Knowing I have a little bit of cash to use as I see fit makes me happy. And…as long as I don’t overspend, I am sticking to the budget which also makes me happy. Win-win!

    • Money Cactus

      Happiness really does help you with your personal finances doesn’t it Pam?

  11. Roshawn @ Watson Inc

    This sounds like a reasonable plan. The important thing is that it gets you to actually think about your money and budget accordingly. With those key components done well and consistently, the details the plan may not even matter as much.

    • Money Cactus

      I agree Roshawn, it really is about being aware of what you are doing, or conscious spending as John put it. With a bit of practice it actually becomes pretty easy to manage your money and still have what you want.

  12. Financial Samurai

    REturn everything before 30 days!

    • Money Cactus

      Ha Ha! I read an article you wrote about returning things Sam, even as far as new cars! I love it, most of the time the novelty wears off once we have what we want, so why not go the extra step and get it – then return it ;)

  13. Penny Pinching Professional

    One thing my fiance and I definitely plan to do when we combine finances is have a small allowance to spend on whatever we want. He calls it “I’m-an-adult money” while I prefer to call it “discretionary spending money”, but it all amounts to the same thing. Having the ability to buy something small on a whim makes a big difference, but there need to be boundaries in place.

  14. Van Beek @ Stock Trend Investing

    To make it easier for myself, my default approach is always “not to buy”. Thus if I wonder if I should buy something, the automatic answer I give myself is “no, you do not need it”. Only if this really does not feel well, I invest time and energy to see if I can convince myself otherwise. Yes, sometimes you have regrets about things that you do not buy. But then in any case you still have your money in your pocket. That softens the “pain”.

  15. Elizabeth @ Broke Professionals

    My husband and I used to have that weekly pocket money, too… but got away from the habit in recent years. With kids in the home, we found we were spending our discretionary income on them instead of on us!

  16. Andrea

    Great article, it seems I now struggle with this inner voice every time I want to buy something even when I can afford it. Trying to find the balance between too cheap and spend-too-much isn’t always easy. There are months where I’m in the toocheap range and months where I nudge the spend-too-much threshold. Hmmmm, work to be done still.

  17. Paul @ The Frugal Toad

    For most of us it’s like the Rolling Stones song, “you can’t always get what you want”. Like you were pointing out MC, people often struggle controlling emotions when it comes to money. I just finished an article on this topic and the research I read shows that many people spend money when they are stressed, sad, or angry as a way of coping. That is a hard habit to break.

  18. Miss T @ Prairie Eco-Thrifter

    This is so timely. My hubby and I were just talking about this. Being aware is key for many things in life, not just finances. We need to make sure we are making conscious, well thought out decisions.
    I like having money saved for things that I want. If I could only pay bills, life wouldn’t be very fun.

  19. eJean1981

    I frequently try to get my family to think in terms of needs, instead of wants. It seems that they are brainwashed in terms of thinking that theY “need” every luxury that they see advertised.

  20. Simple Finance

    The flip side of this, I suppose, is buying something just because you HAVE done the research and KNOW it’s a good value. I did this with a car purchase years ago – I needed it, I wanted it, I’d done the research, but I still regretted the purchase… and still haven’t figured out why.

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