After months of living quieter lives during lockdown, it's no surprise that many Canadians are now feeling the urge to spend the money they saved during the pandemic and enjoy life outside their homes.
But even small dollar impulse purchases can add up quickly if you make too many of them all at once. So, if you've noticed that the balance in your bank account is dwindling more quickly than you intended or your credit card is inching dangerously close to your credit limit, then it's time to regroup and make a plan for how you'll spend the money you saved more mindfully going forward.
To help you get started, here are some tips for saving money and curbing the urge to splurge on feel-good purchases.
Track your purchases
Regardless of whether you do it by hand or in an app, logging your purchases can help you get a better handle on your spending triggers and where your money is going. It can also help you catch whether small dollar purchases or occasional impulse buys are costing you more than you realize.
Keeping a record of your spending can also help you work through the impulses that are behind some of your more expensive purchases. By writing down your unplanned purchases, reflecting on why you made them in the first place and what you got out of the experience, you might get the space you need to understand why you made those purchases.
Watch the video: How to budget
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Another effective strategy for curbing your impulse to overspend is to imagine yourself in the future and train your mind to remember the goals and experiences that you want to have years from now—not just tomorrow.
For example, if you're trying to become debt-free, imagine what you'll be able to buy once you finally get there. One study published in 2011 found that looking at an aged image of yourself can put you in a more future-focused frame of mind so that you are more motivated to save for retirement and other far-off expenses.
Do you have a financial plan that will build towards your life goals? A Scotiabank advisor can help you create a plan that keeps you on track.
Consider the environment in which you're spending
You may be more likely to overspend if you're hungry or tired or if you're feeling blue. Think about things like eating a snack before you head to the grocery store or taking a walk before you head to your favourite store.
The people you shop or dine out with may also influence how much you spend. So be mindful of who you're bringing along to shop. A recent study published in the Journal of Retailing and Consumer Services, for example, found that kids are particularly good at tempting the adults caring for them to overspend.
Be careful around friction-free spending
One of the biggest hurdles to overcome is the spending that's so easy you hardly think about it. Stores are smart about this and so they put a lot of energy into making your checkout experience as fast and smooth as possible.
The power of friction-free spending is also what can make one-click online shopping add up quickly: you can easily spend hundreds of dollars within seconds. But even if you head to a store, you can still get into trouble if the store makes it easy to breeze through checkout without giving you the time to pause and think before you pull out a card. Now that many stores have substantially increased the upper spending limit for contactless transactions in the era of COVID-19, it has become even easier to just quickly tap and pay for an unplanned splurge.
Luckily, there are ways you can hack your shopping experience to make it less likely you'll buy things you regret. The key is to give yourself a moment to pause before you buy and think about whether you really want to make your purchase.
When you're shopping online, for example, remove your saved payment information from a retailer's website and put your wallet in a different room so that it takes more time to complete a transaction. Or try leaving items in your cart overnight rather than purchasing them right away. Alternatively, add them to a wish list so you don't forget which ones you picked.
Similarly, when shopping in a store, make a habit of thinking through your purchases long before you get in line to tap and pay. Once you're ready to head to the cash register, walk around the store for a few minutes and add up in your head or with your phone the sticker prices of everything in your cart. Then ask yourself if you can afford to pay for all of them in full once your card payment is due or if you'll have to borrow for them, incurring extra fees or interest. Similarly, consider whether you have enough room in your budget to pay for bigger-ticket purchases with equal installments.
An installment payment plan, such as Scotia SelectPayTM* available on select Scotiabank cards, can be helpful if you need more breathing room to pay for must-have items.
With a plan on how you’ll spend your money on the things that matter most to you, you can enjoy coming out of lockdown without worrying about overstretching your budget.
* Scotia SelectPay is an installment plan feature (the “Plan” or “Installment Plan” or “SelectPay”) made available on eligible personal Scotiabank Visa credit card accounts (the “Eligible Account(s)”) that allows a primary cardholder to convert an eligible credit card purchase of at least CDN $100 posted to the Eligible Account to an Installment Plan with monthly payments over a fixed payment (the “Installment Payment Period”) with a fixed interest rate (currently 0% interest rate) during the Installment Payment Period and an Installment Fee that applies to that Plan (the “Installment Fee”). The Installment Fee may vary per Plan and the exact fee will be disclosed to you at the time you select the Plan.
Interest rate that applies is 0% for this plan and therefore no interest accrues during the Installment Plan but any unpaid remaining balance on your Installment Plan ( (the “Remaining Installment Amount Balance”) after the Plan ends or is cancelled by you or us will be re-applied to the balance on your Eligible Account. Your Remaining Installment Amount Balance is again eligible for an interest-free grace period. You will not pay interest on that Remaining Installment Amount Balance if we receive payment of the full balance (the “New Balance”) that appears on your statement in the month in which we re-applied your Remaining Installment Amount Balance to your Eligible Account. If you lose your interest-free grace period on the Remaining Installment Amount Balance, any applicable interest will then apply at the annual interest rate that applies to Purchases on your Eligible Account on that amount from the date of expiration or cancellation of the Installment Plan until that amount is paid in full.
Your Eligibility to convert an Eligible Purchase to an Installment Plan and the terms made available to you are subject to Scotiabank’s assessment at the time you request to convert your Eligible Purchase to a Plan. SelectPay is only available through the Scotia mobile banking app to primary cardholders on an Eligible Account (with no co-borrowers).
See the full Terms and Conditions for eligible Scotiabank Visa cards, eligible purchases and additional SelectPay terms and conditions. All SelectPay rates, fees and terms are subject to change.