30-day savings rule: Here’s how it helps to control impulse spending

A simple yet effective strategy, the 30-day savings rule is something anyone can implement in their financial routine to help curb impulsive spending.

The rule, which encourages people to pause and reflect on nonessential purchases for a month before making them, can lead to substantial savings growth. It’s especially salient at a time when 57 percent of Americans are uncomfortable with their level of emergency savings.

Here’s how the 30-day savings rule works and how it helps you save.

Understanding how the 30-day savings rule works

The premise of the 30-day savings rule is straightforward: When faced with the temptation of an impulse purchase, wait 30 days before committing to the buy. During this time, take the opportunity to evaluate the necessity and impact of the purchase on your overall financial goals.

Some questions you can ask yourself during the month-long interval before making a decision on the purchase are:

• Is the item/service a need or a want?
• Can I afford it without sacrificing other financial goals?
• Have I researched better deals and alternatives?
• Can I allocate the money to a higher priority?

You can apply the rule to both large purchases and small daily expenses. Imagine being tempted to purchase a high-end electronic item for $800. Waiting 30 days provides time to assess whether the item is a genuine need or a fleeting desire, encouraged by flashy marketing.

Or, consider a daily habit, such as buying a cup of specialty coffee for $6. Over the course of a month, this routine can accumulate to $180. Applying the 30-day rule in this case might mean making coffee at home for a month and potentially redirecting that money toward savings or debt repayment.

What is impulse spending?

Impulse spending refers to the spontaneous purchases made without thorough consideration or a genuine need. It’s the quick decision to buy something simply because it’s momentarily appealing.

While it might lead to a sense of instant gratification, impulse spending can contribute to a number of long-term harmful effects taking aim on your wallet. It can erode your budget, diverting funds from essential expenses or financial goals. It can also lead to increased debt and diminished savings. Eventually, it might cause a strain on your financial well-being and mental health, due to feelings of guilt, regret and struggling to keep up with your finances.

By introducing the 30-day rule into your life, you directly address impulse spending. The rule acts as a cooling-off period, encouraging time for reflection and a more intentional approach to spending. It can help you distinguish between genuine needs and impulse wants while minimizing buyer’s remorse.

Tips for implementing the 30-day rule

To make the most of the 30-day rule, follow these steps:

1. Create a wishlist: Maintain a list of items you desire to purchase and revisit it after the waiting period is up. You might find that some of those items have lost their appeal.
2. Track savings: Use a dedicated savings account for the money you save by resisting impulse spending. Seeing how your savings grow can serve as a continuous motivator.
3. Prioritize financial goals: Consider how the potential purchase aligns with both short-term and long-term financial goals. Redirect funds toward these goals as needed.
4. Use a budgeting app: You can leverage technology to help you keep track of your spending and goals. Apps like PocketGuard and You Need a Budget can provide real-time insights into your spending habits, so you gain awareness of how you tend to impulse buy and where to focus on saving more.
5. Reward yourself occasionally: Not every purchase needs to be put off. It’s important to have an intentional reward system in place to make the process of curbing impulse spending more enjoyable. Just make sure that the rewards remain in your budget — a reward can be something non-transactional, too, such as a day trip to the beach.

Bottom line

By incorporating the 30-day rule into your financial toolkit, you can not only control impulse spending but also establish a solid foundation for long-term financial stability. Consider redirecting savings to an emergency fund, to ensure that you have a financial buffer in the case of an unexpected expense.