Step 3: Separate Needs from Wants
As people track their spending, they discover that some of their money gets used for things they really don’t need. Instead, they merely want them and often buy them impulsively. Impulse spending is unplanned spending; purchasing things that you may or may not need, or spending more on an item than you’d planned.
People spend impulsively for a variety of reasons. If they’re in a good mood, they spend out of pleasure and to keep the good mood. If they’re in a bad mood, they spend to try and make themselves feel better. Some people spend in certain places or at certain times because they feel obligated to do so, e.g. on vacation, during special holiday seasons, when they’re with certain people, or while engaging in specific activities.
Impulse spending habits are often linked to stress levels. A little stress can be motivating but a lot of stress can rob you of your ability to make wise choices between needs and wants. If you would like to learn more about why you spend impulsively and what you can do to change your spending patterns, have a look at this.