Disambiguation is better known as “Death by a thousand cuts”.  It was an ancient form of torture, which eventually led to death performed in early 900 CE and eventually outlawed in 1905 in China.  This is how I feel about today’s spending on seemingly small, insignificant things.  Canadians today are overspending their money on little purchases that quickly add up to big money, and by the time we realize we have spent more than we can afford it’s often too late.

How often do you check your bank account?  Daily?  Bi-weekly?  Monthly??  All these teeny, tiny purchase are adding up to big bucks and most time we don’t have any idea what they are costing us.  Things like coffee, online subscriptions and quick trips to the corner store are draining our bank accounts of precious money that we need for other bills.  So what do we do?  We rely on credit to get us by.

When I get a client to track their spending for the month it never fails to surprise them at how much they spend on the different little purchases they accumulate every month.  Most times, my clients are running a deficit each month and are using credit cards or, worse yet, payday loans to keep the budget running.  This has to stop!

But why are our spending habits like this?  There are a lot of little reasons.

First there are all the little add-ons and extras that come with each purchase.  Buying something online almost always leads to buying something else because it’s on sale or would go perfectly with the item you just bought.

Second, it’s easier to buy things with your debit card than ever before.  All you have to do is just tap it and the money has exchanged hands.  No need for a PIN, swipe, or signature; just tap your card and go.  They even market the product as fast and convenient.

Third, the internet never forgets.  Once you make a purchase online, your information is stored and pops up the next time you want to make a purchase.  You don’t even need to get off the couch to get your card anymore; the website has everything there for you waiting.

Finally, with the advent of smart phones, paying is easier than ever!  You don’t even need your cards anymore.  Just tap your phone and the transaction is complete.  All these things make spending so much easier, and dangerous.

Adding to these reasons is another important issue; Canadians don’t budget.  That’s right, I said it, and less than half of Canadians run a successful budget.  And when I’m talking about a budget, I mean they plan ahead for where their money is going to go, not just pay bills as they pop up.  These people are planning December’s budget in November, maybe even in September!  If you don’t plan on how your money is spent it will just evaporate out of your account, and the majority of it will likely be spent on small, cheap purchases that got out of control.

But there are some ways you can make it stop.

  1. Limit your little transactions

Even if you are like many Canadians who don’t budget, by simply placing a restriction on how many transactions you are allowed to do in a single day you will spend less money.  Here’s how this method works.  Did you stop and get gas and groceries today?  If you set your limit to 2 transactions per day, you’re done!  No more spending today.  If the marketing companies and banks want to decrease the number of controls we have against spending money, then it is our duty to increase them on our end.

  1. Use Cash

I’m a big proponent of the cash system.  Having physical money leave your hand has a lot more impact than tapping or swiping your card at the checkout.  Having to watch what you spend directly out of your pocket can really help you maintain the budget and force you to make some realistic choices when it comes to purchasing small items.  When the money is gone you don’t get to spend any more.  You really have to decide what’s important and what is not.

  1. Always checkout as a guest online

When you shop online, make sure to never save your information or payment details.  Checkout as a guest whenever possible.  Not having your information saved on the website makes the impulse purchase of small things that much more difficult to satisfy.  Also, by only shopping as a guest, you limit yourself to the barrage of advertisements tailored to your spending habits.  It’s very easy to entice you to buy more little things when they know what you like!  It makes sense to keep some sites ready with your likes and purchases so that you don’t miss out on deals that you could take advantage of, but there’s no need to keep seeing email or pop-ups from that novelty t-shirt place you made one purchase at two years ago.  Keep you junk mail to a minimum and only sign up for sites that you know you’ll want to use again and again.

  1. Clear you browser history from time to time

Not only is it a good idea to clear the browser history to keep the ads and marketing schemes at a minimum, but clear your cookies as well.  Cookies are the little bits a data that keep your likes and clicks in memory and make it very easy for retailers to know what you have looked at and what to push on you next.  If you clear out the cookies you will really reduce how effective the ads that pop up are.  Oh, you’ll still get ads on Facebook or Google, but they’ll be more random and not as likely to seduce you into buying something you don’t really need.

  1. Set a budget

If you don’t tell your money where it has to go it’ll just find somewhere to go on its own.  Setting a budget allows for some occasional shopping but will ensure that all your needs are paid for first.  There are a ton of budget trackers and apps out there for your phone or computer, but all you really need is a pad of paper and a pen.  If you’re stuck and wondering where to even begin, call and make an appointment with one of our certified credit counselors today.  They are experts at setting up a budget and helping to stay on track.  The service is 100% free so what do you have to lose?

  1. Try a Spending Freeze

This step is a difficult one but well worth the effort if you try.  It’s pretty easy to do.  For an entire month spend no money on things you do not need.  You need food, shelter, utilities, transportation just to name a few.  You do not need supper at a restaurant, drinks on the weekend or new clothes when the old ones fit just fine.  These are WANTS and can be cut out of the budget for a month.  Sound easy?  Trust me, it’s no.

You should learn two things from this challenge.

First; how much you are really spending on little, useless purchases each day.  You’ll be surprised at how much money you spend on the little things that you could easily do without.

Second; you’ll really come to grips with what it is you can do without and what is really necessary to get by each day.  Questions like, “Do I really need to buy coffee on my way to work or should I make some at home and take it with me?” and, “Am I really so tired that I need to go out for supper instead of making something with the ingredients I have at home?” will really get you thinking about where your money is being spent and what you can cut out of your daily budget.

The little things can really add up in a hurry and the only way to understand how much you are spending each day is to change the ways you look at money and the budget.