Tips for avoiding emotional spending

Decisions about spending money are often driven by emotions, even if what your heart is telling you goes against logic. Emotional financial choices may provide you with shortterm happiness, but they are just as likely to result in long-term regret or debt.

Here are six tips for making spending decisions, without allowing your emotions to take over.

1. Get an accurate picture of what it costs to maintain your lifestyle and fund your goals. Knowing your fixed and variable expenses and being able to quantify your goals in terms of dollars and timeframes will help you understand what you can afford to spend in the near term.

2. Ask yourself if you want something or need something before you buy it. If you do need it, or if it will make a huge difference in your life and you can pay for it right away without touching funds that are earmarked for other important goals, then go for it.

3. Pause and think twice before buying large items. When making major purchases (for example, over $500), take some time between deciding to buy and making the actual purchase. Prioritize your expenditures by categorizing them in terms of cost and effect. For example, you should pay your health insurance and car insurance before booking a short-term vacation.

4. Make a list before shopping. Whether shopping for groceries, household items or gifts, creating a list-and sticking to it-will help you avoid impulse buys and save money.

5. Shop for major holidays throughout the year. Set a budget for annual gifts early in the year and take the time to comparison shop to find the best prices and take advantage of discounts when you find them. This not only helps to spread out giving expenses, it also ensures you do not pay a premium for last-minute purchases.

6. Experts say financially savvy people know their emotional triggers for spending, and are able to rein them in when necessary. Unfortunately, this is not easy for everyone. However, working with a certified financial planner (CFP) professional to manage your spending can help you stay focused on achieving your long-term financial goals. To find a CFP professional near you who can help you look at your life through a financial lens and avoid the cost of emotionally driven decisions, visit www.letsmakeaplan.org.

Remember that your financial priorities should almost always be focused on your long-term goals. A bit of planning and some outside help can go a long way toward better spending decisions.