When’s the last time you waited in a long line to make a purchase at the mall? Unless you’re a fan of Black Friday shopping, it may have been a while. Today, not only do we not have to go to a physical store when we want something, we don’t even have to drag ourselves out of bed to fetch our credit cards — they’re all handily stored in our favorite shopping apps. We can put items in our cart and fly through checkout in a single click. It’s painless and convenient, and that’s why it’s costing us so very much.
In 2018, consumer spending in apps topped $101 billion, an increase of 60% over 2016, according to analytics firm App Annie. Why the huge gains? “Psychologically, the apps don’t show us the total of what we’re losing,” says Sherrie Campbell, a clinical psychologist. “We push a button, and bam — our Uber shows up. You don’t even ‘pay’ for Starbucks anymore, you can just bring your phone in. We’re not feeling the loss of money, only the gain.” Plus, if you’re not fond of keeping track of your finances (and many people aren’t) you may never fully understand how your in-app spending adds up.
Thankfully there are ways to bring your financial self back down to earth. Here are four.
Set Up Alerts On Your Debit & Credit Cards
It’s time to take your relationship with your bank to the next level — by giving it your phone number. When you allow your bank to text you alerts when you make a purchase, or reach a certain spending limit, it can force you to face the financial effects of your actions immediately.
“Your bank can send you a message telling you how much you have in your account, so you know whether to slow down your spending,” says Josh Mungavin, a certified financial planner and principal wealth manager at Evensky & Katz Foldes Financial Wealth Management. “The same goes for credit cards — you can have them send you a message once your balance goes over a certain amount.” Consider it a mental nudge that it’s time to focus on your budget.
Use Apps & App Blockers To Budget & Save
Your phone is small, but mighty — it has the power to make or break your budget, and companies know this. That’s why budget monitoring apps like Digit or Empower are now a thing. They help to track your in-app spending and can keep you spending within your means. You link your bank account to the app, which will then analyze your earnings and guide you on how much you should save and spend.
If you’re really looking to reign in your spending, you may want to try a more extreme approach — an app blocker, Mungavin suggests. These restrict your usage of certain apps based on the parameters you set, like the times of day you are (or aren’t) allowed to use them. If the Zappos app is your favorite lunch break companion, your app blocker can be programmed to make it unavailable from noon to 2 p.m., for example. They can also help you reign in overall screen time and cut down on distraction. The happy byproduct, Mungavin says, is that it can also cut down on the number of things that you buy.
Use Your Computer
Consider deleting certain particularly troublesome apps and make a new rule that you’ll only shop on your computer. Why?Using your computer helps delay the immediate gratification of shopping that makes apps so addictive. Typing in the website URL is more work than just clicking on your app. You can’t purchase things without a wifi connection. Computer shopping isn’t as easy to do with a single hand while, say, lounging in bed. And finally, using your computer can remind you that you’re spending money, because the spending is all being done in one place, in a single browser. Sometimes when we’re shopping in multiple apps, we can’t really gauge how much we’re spending because it feels more spread out, Campbell says.
Create A Separate Discretionary Spending Account
The idea of having separate checking and savings accounts is nothing new, but what about a discretionary spending account? Having a few different bank accounts that pull a certain amount out of your paycheck every payday, can be a great solution for keeping your spending under control, Mungavin suggests. With his proposed system, some of your money would put into your savings and retirement accounts, another portion would go into your main checking account that’s reserved for bills and essentials, and any leftovers would be shuttled into your new discretionary spending account. That money can truly be “mad money” or “fun money,” since you’ve taken care of all your other expenses. You can relish spending every penny, knowing that you won’t interfere with your other goals.
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