Thrifty Thinking: Jump-Starting a Financial Cleanse

With summer now in full swing, it's a good time to fix money mistakes of the past and jump start a financial cleanse. Below are six steps from CO-OP Financial Services on how to go about it. 

1. Track your spending.

While it may sound tedious, start by monitoring your spending. This will help you see where your money is going and to pinpoint any “money pits,” areas in your budget where you’re spending too much. These days, there are plenty of great budgeting apps at your disposal to make it easy. While tracking your spending gives you information on your spending woes and saving wins, it’s putting the work into changing your habits so you become a successful saver that makes the ultimate difference.

2. Take inventory of what you have.

While taking inventory of your possessions, use it as an opportunity to do some decluttering. It’s a great way to see firsthand how much stuff you end up not using and can stop you from buying stuff you don’t need. To start your purge, you can apply Marie Kondo’s ever-popular KonMari Method. Make sure you get rid of stuff shortly after you’ve decided to toss or donate it. Otherwise you may find yourself having second thoughts.

3. Go on a digital cleanse.

The Internet can be a huge gateway to impulse shopping. Sometimes all it takes is an email notification to pop up about a flash sale to trigger an impulse buy. To curb buying things you don’t need, Flanders suggests unsubscribing from your favorite stores’ email newsletters and unfollowing them on social media. Be sure to also unsubscribe from lifestyle blogs, as they can also create unnecessary material wants. “Don’t feel bad about it—even if you know the store owner,” says Flanders. “You need to remove all temptations.”

4. Keep a list of your spending regrets.

We’ve all experienced buyer’s remorse at one time or another. We would suggest creating a list of recent purchases you regret. Keeping this list in your wallet or on your phone to serve as a reminder will help you from continuing the same habits.

It’ll also help give some insight to when you made emotional purchases and impulse buys. Were there certain times during the past year where you were going through a difficult time in your life, such as stress on the job or a bad breakup, and splurged to boost your mood? Or maybe you tend to fall prey to super sales? By pinpointing circumstances that caused you to make these purchases, you may think twice the next time.

5. Go on a fiscal fast

To help you change your bad money habits, you can go on a “fiscal fast,” which is when you stop spending money for a week. This forces you to make do with items you already have in your home. You can turn it into a group event, where you do it with your family, friends, or co-workers.

Once you’ve completed your fiscal fast, you may find out that there’s a lot you can do without. It can also help you realize that a lot of the times we may spend out of habit and not from necessity. You can do this once or twice a year for a week or commit to a longer amount of time

6. Stay accountable.

During your financial cleanse, you may find it difficult at times to stay on track. If you’re determined to stick to your financial cleanse, stay accountable by partnering with a friend or make an agreement with someone. Besides support, your friend can also offer you financial tips. If you fall off the bandwagon and relapsing into a bad habit, don’t be too hard on yourself. It happens to the best of us. Just recommit to your goals create checkpoints to help you along.

Going on a financial cleanse will help you develop a better relationship with your money and develop saving habits. By going through a cleanse, it will put you back the driver’s seat so you can take control of your finances.