We all know how easy it is to get caught up in impulse buying, especially when we’re feeling stressed or overwhelmed.

That snack at the checkout counter, the latest gadget we ‘need,’ or those cute shoes we convinced ourselves were a must-have — we’ve all been there!

But the good news is, it’s possible to take control of our spending habits. By making a few simple changes and being mindful of our finances, we can stretch our dollars further and avoid the traps of stress-spending.

So, let’s dive into some practical tips that will help us stop overspending and start saving smarter — starting today!

1.Creating a Practical Budget

The first step to taking control of our finances is creating a clear, written budget. It's easy to just think about our expenses in our head, but the truth is, it’s hard to keep track of everything that way. Writing down a budget gives us a visual picture of where our money is going. Start by listing your essential expenses: rent or mortgage, utilities, groceries, transportation, and any debt repayments.

Once those are covered, it’s time to think about savings. Experts recommend setting aside at least 20% of your income for savings each month. Finally, don’t forget to allocate a portion for entertainment — whether it’s $5 or $50 per week. The goal is to ensure that we’re not depriving ourselves, but instead, spending intentionally within our means.

2.Understanding the Difference Between Wants and Needs

Before making any purchase, ask yourself, “Do I really need this?” Tiffany Aliche, a personal finance expert, has a simple way to help us figure that out. She uses the rule “Need it, love it, like it, want it.” This framework can guide us in making smarter choices.

Needs are things we cannot live without, like food, shelter, and transportation. Loves are things that bring lasting joy — for example, a special item that’s meaningful to us. Likes are temporary pleasures — perhaps a new t-shirt we’ll wear once or twice but quickly forget about. Wants are quick fixes, like buying something to fill an emotional void, but these rarely bring lasting satisfaction.

Before hitting the checkout button or swiping that card, pause and reflect: Is this purchase something that will truly bring me joy in the long run, or is it just a fleeting desire? By recognizing the difference, we can stop ourselves from buying things that don’t add real value to our lives and, ultimately, our wallets.

3.Implementing the “Noodle Budget”

We all have those months where money feels tight, and it seems like there’s not enough to cover everything. That’s when the “noodle budget” comes in handy. Tiffany Aliche coined this term to describe the bare minimum amount of money needed to get through tough times. When things get financially rough, we need to focus on the essentials only: rent, utilities, food, and transportation.

For example, if you have to cut back, consider canceling subscription services like Netflix or gym memberships, or switch to eating more budget-friendly meals like ramen noodles or rice and beans. The goal is to preserve your savings for emergencies without dipping into them.

By identifying and eliminating non-essential expenses, we free up funds that can be used to maintain our financial stability. The noodle budget reminds us that we don’t have to sacrifice everything, but we do need to prioritize what matters most.

4.Take Action: Cut Back on Impulse Purchases

Impulse purchases can wreak havoc on our finances, especially when we’re not paying attention. Aliche suggests an extreme, but effective, step: cutting up our credit cards. If we’re someone who tends to store credit card information online for convenience, it’s time to take action. Call your credit card company and have them reissue a new card, and then, store it away in a safe place.

Without easy access to your card, the temptation to make spontaneous purchases decreases. Alternatively, consider using a debit card instead, where the funds are drawn directly from your checking account. This will help you stay within your budget and avoid accumulating unnecessary debt.

Additionally, if you tend to shop online, try using a browser extension that helps track your spending or provides discounts. This way, you’re not only curbing impulse buys but also getting the best deals when you do shop.

5.Building an Emergency Savings Fund

An emergency fund is essential to avoid relying on credit cards or loans in times of crisis. Ideally, this savings fund should cover three to six months of living expenses, allowing us to handle unexpected costs like medical bills, car repairs, or sudden job loss. Set up a separate savings account for your emergency fund, ideally one that’s not linked to your checking account. This makes it harder to access the money when the temptation to spend arises.

To make saving easier, set up automatic transfers from your checking account to your savings account. If you can, automate your savings to a high-yield savings account to earn interest over time. Even small amounts can add up, and the less we have to think about it, the more consistent we will be. It’s one of the best ways to ensure that we have a financial safety net when life throws us a curveball.

Smart Saving Tips

Video: Humphrey Yang

Taking Care of Your Future Self

Saving for the future can feel like a long, slow process, but it’s important to keep the bigger picture in mind. One way to make it more engaging is to imagine your future self and treat them like a friend you want to take care of. Tiffany Aliche calls her future self “Wanda,” a sassy 70-year-old version of herself who enjoys her golden years without financial stress.

Instead of giving in to the impulse of buying something now, Aliche asks herself, “Will Wanda appreciate this purchase?” Thinking about how today’s actions impact our future can be a powerful motivator to save more and spend less.

By focusing on long-term financial goals, such as retirement or future travel, we can make wiser decisions now that will pay off later.

Let’s Be Kind to Ourselves

In conclusion, remember that managing money isn’t about perfection. We all slip up sometimes, and that’s okay. The important thing is to stay committed to making better choices and to give ourselves grace when things don’t go as planned. Financial freedom takes time, but with these simple strategies in place, we can begin to save smarter, spend less, and build a more secure future.

We hope these tips help you take control of your finances and start building wealth. If you have your own budgeting tips, feel free to share them in the comments below, Lykkers! Let’s continue this journey toward financial freedom together!