Holly Johnson* says that having the ability to buy almost anything we want online with a single click can be a little too convenient if we’re trying to stick to a budget.
Photo: Bruce Mars
While I normally live a very frugal lifestyle, I have a sad confession to make: last September, I spent over $250 on Amazon.com.
I did pick up a necessary item; I also bought some regular stuff that was probably justifiable.
The real shame here is all the other stuff I bought.
This situation isn’t the end of the world, and it’s not a disaster for our finances, either.
We’re free of debt, including a mortgage.
And we had already exceeded our savings and investing goals for the year.
Finally, the $250 spent on Amazon did fit into our monthly budget in our “miscellaneous spending” category, so it’s not even like we went over our budget.
Still, there’s a part of me that wants to make sure this doesn’t happen again.
Spending $250 in a month like this is a one-time fluke I can live with, but we all know that $250 per month is $3,000 per year!
I do not want to be spending $3,000 a year on random things I probably don’t need in the first place.
That’s why I disconnected all our credit cards from my Amazon account.
Having the ability to order almost anything I want with a single click is just a little too convenient and enticing.
If I’m going to buy something through Amazon, I’m going to force myself to enter my credit card details every time.
No excuses!
How to avoid overspending online
If you’re struggling to avoid the temptation of buying things you don’t need online, I suggest you take similar steps to make the process more difficult.
Here are some other ways to avoid letting the convenience factor of online shopping ruin your finances.
Delete apps that entice you to shop, and unsubscribe from retailer email lists
I suggest deleting any rewards or shopping apps from your phone if they are causing you to overspend on a consistent basis.
This includes apps for stores you shop at and even rewards or cash-back apps.
Apps can make our lives easier, but you may not want shopping to be so easy you can buy something on your smartphone while you’re waiting in line at the supermarket or watching television on your couch.
Delete apps from your phone and force yourself to shop the hard way (in person or at least on a laptop), and you are a lot more likely to avoid unnecessary spending.
The same goes for email lists: If your inbox is bombarded daily with tempting new flash deals, free shipping offers, and half-off sales you just can’t seem to resist, it’s time to unsubscribe.
Track your spending
Another way to make sure you don’t overspend — in any area of your life — is through expense tracking.
You don’t have to go through any elaborate steps to track where your money is going each month if you don’t want to.
Really, all you need to do is log into your bank account and credit card accounts a few times per month to tally up how much you spent in important categories like dining out, entertainment, and transportation.
Tracking your spending is important for a few reasons.
First, it forces you to come to terms with the reality of how you’re spending — not just wishful thinking.
If you think you’re being frugal, tracking your spending is a smart way to know for sure.
Tracking your spending can also help you stay on track with certain spending goals.
If you hope to spend less than $600 per month on groceries, for example, tracking your purchases each month is the only way to know whether you’re meeting your goal.
Start using a monthly budget
While tracking your spending is a good idea, you can take it up another notch by using a monthly budget.
Budgeting may have a bad rap, but a solid budget is really nothing more than a plan for the money you work so hard to earn.
My favourite form of budgeting is the zero-sum method because it forces you to “spend” each dollar you earn on paper each month with some of your funds going towards savings and investments.
However, there are many other types of budgets to consider, including the envelope budget and the 50/30/20 budget.
You can also use budgeting software to create a custom spending system that works for you.
Whatever type of budget you use, you can also rest assured that you don’t have to be super-strict.
In my home, we have a “miscellaneous” spending category each month that’s normally used for dining out, birthday presents for family members, or other expenses I forgot to plan for explicitly.
Set a waiting period for each purchase
If you don’t want to remove shopping apps from your phone or delete your payment information from your favourite online shopping accounts, another strategy to consider is simply instituting a waiting period before you buy anything for your home or yourself.
Forcing yourself to wait even 24 or 48 hours before you hit that “buy” button could be all it takes for you to figure out you don’t really need something or you already have an item you could use instead.
Instituting a waiting period for your online shopping is also easy thanks to online “carts” that can hold your purchases while you wait it out.
If you find you can live without it — or even forget about it entirely — remove it from your cart and move on.
Final thoughts
The online world has made our lives easier in so many ways.
But you know what?
Sometimes the internet can make our lives a little too convenient.
When you can spend hundreds of dollars on “stuff” without even realising it, convenience can start working against your goals.
Unfortunately, it’s up to us to track our spending, see where we could make improvements, and set firm limits for ourselves.
We all know online retailers want us to spend more and more regardless of the consequences, and only we have the power to look at our spending and say enough is enough.
* Holly Johnson is a personal finance writer and her website is ClubThrifty.com.
This article first appeared at www.thesimpledollar.com.
