Using the 30 Day Rule to Control Spending

September 17, 2019 · 9 minute read

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Using the 30 Day Rule to Control Spending

Perhaps you’re browsing through clothing racks in your favorite store or maybe you see a deal on a Facebook ad that seems too good to pass up. In those situations, it’s easy to make an impulse purchase.

How much that impulse buy hurts your budget depends on your income and monthly expenses, how much that item costs, and how often you make impulsive purchases. If you’ve got room in your budget for them and you’re happy with what you’ve bought, then all may be well.

If, however, you’re looking for ways to rein in impulse buying, whether that’s to pay down bad debt or to save for something you really want, the 30 day rule can be a great budgeting tool.

What Is the 30 Day Rule?

The 30 day rule is a simple strategy that has the power to help you control your spending and otherwise make the right financial choices for you. Essentially, if you feel the urge to buy something that’s non-essential, whether it’s in a store or online, the rule says: Stop.

Leave the store. Click away from the site.

A great next step is to write down what you wanted to buy, along with where it can be found, and its price. Date the document and then mark on your calendar when 30 days will have passed.

During that time frame, you might think about whether you really need the item or, if it’s a “want” rather than a “need,” whether you want to spend discretionary funds on it.

After 30 days have passed, if you still wish to purchase the item, then you can potentially do so, knowing that it’s no longer an impulse buy.

Rather, it’s a well thought out financial choice. It can also help your budget to price compare with different vendors after you’ve made your decision to buy.

Sometimes, you’ll discover that you didn’t really want the item as much as you originally believed. In those instances, you’ll often save money by preventing yourself from buying something that you didn’t desire that much, after all.

Needs vs Wants

The 30 day rule can be an excellent way to manage excess spending on items that we want rather than need. For example, if you’re out of toilet paper, that clearly goes into the needs category, and doesn’t fit the rule. You could shop for a better price, sure, but it’s a pretty necessary purchase.

If your car is almost out of gas and you’ve got to drive to work in the morning, the same concept applies. Yes, if you need to eat dinner and the cupboards are bare and the fridge is empty, you’ll need food (but not necessarily steak and lobster).

On the other end of the spectrum are luxury purchases—clearly wants. This could include a new piece of sparkling jewelry or a stylish pair of designer shoes in a brand new color (when you already have that same pair in four different hues). It could include another top-quality fishing pole—or two—in case friends stop by and want to fish with you.

There’s a middle ground, of course, where it may be tougher to decide if something is a need or want, and whether the rule applies. For example, you may have a big job interview coming up and there’s a really sweet suit on sale.

On the one hand, you may have an outfit that will work just fine, but on the other, this one may be more appropriate, giving you the confidence to wow the interviewers. In that case, it may make sense to think about the purchase for a day or two, rather than for a full 30.

In short, the 30 day rule is intended to help you to manage purchases that are discretionary, not for basic needs, health, or safety.

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The Role of FOMO Spending

FOMO: Fear Of Missing Out.

FOMO spending is a form of anxiety, triggered by the feeling that, if you don’t buy a particular item, you might miss out on something important. This could happen if you see social media posts where friends (and perhaps even people you don’t know!) are buying something you don’t have.

This fear can significantly influence how people spend their money, serving as motivation to spend funds that they can’t really afford.

FOMO is playing a significant role in millennial debt. According to a Credit Karma/Qualtrics study of 1,045 U.S. consumers:

•  Almost 40% of millennials have spent money they didn’t have as they try to keep up with others, therefore going into debt.

•  Nearly three-quarters of these millennials keep this behavior—that they’ve gone into debt to try to keep up with friends—a secret.

•  Nearly 27% of millennials feel uncomfortable saying “no” to something they can’t afford if a friend suggests the activity.

The reality is that not everyone’s financial situation is the same. Your friends may earn a different income, have a different debt situation, and different expenses to consider.

If you find yourself feeling peer pressure to spend in ways that aren’t healthy for your budget, it may make sense to come up with alternative, less expensive activities to do together.

If, for example, a friend suggests going out for a movie followed by a trip to the coffee shop to discuss the film, you could offer to borrow a classic movie from the library that you’ve both been wanting to watch, and drink coffee at your place.

Also, you may want to keep an eye out for spending triggers. If you notice that scrolling through social media causes you to want to spend—perhaps for the latest outfit or subscription—then reducing your time on social media could help.

If you’re more tempted to buy when you use your credit or debit card, it may be wise to bring cash instead when going to spending-trigger locations. If you love to shop, shop, shop online, maybe consider visiting a brick-and-mortar store when it’s time to make a purchase.

Each of these strategies is a way of practicing delayed gratification—and there are plenty of benefits to engaging in this healthy behavior (besides from possibly fattening your wallet).

Benefits of Delayed Gratification

Delayed gratification, according to studies , is often a personal trait found in successful people. When someone can delay satisfaction until the appropriate time, they are more likely to thrive financially, as well as in their relationships, careers, and health than those who haven’t yet mastered the skill.

It isn’t always easy to wait when doing something might make you feel good right now, but waiting can lead to bigger rewards in the future. As this becomes a practice, it can help to boost your overall self control and assist in achieving long-term goals.

One of the more well-known studies on delayed gratification involves, of all things, marshmallows. This study was conducted at Stanford University in the 1960s, with children taken into a room where they each found one marshmallow on their plates.

The researcher gave just one instruction. The children could choose to eat their marshmallow now, or wait 15 minutes and then get a second one.

The children who chose to wait, the researchers discovered, had higher standardized test scores. They also were found to have fewer behavioral issues and health problems.

You might use this study to think about your own ability to wait for greater rewards. Focusing on finances, you might consider times when a quick impulse purchase didn’t turn out to be the best move, and times when saving for something better was ultimately more rewarding.

30-Day Rule and Savings

Returning to the 30 day rule, there’s another twist on the delayed gratification strategy. After following the initial steps— delaying any impulse/discretionary purchases, writing them down, and giving yourself 30 days to decide to follow through—consider this extra step:

Rather than just writing down the amount of the discretionary purchase, you could put that amount of money into your savings account. As you watch it grow, you may be less tempted to use it to buy something you don’t need. And, once you increase your savings account’s momentum, you may enjoy seeing its growth so much that you’ll be less interested in FOMO purchases. It can even turn into a game re: how much you really can save.

Here are some additional savings strategies to consider:

•  Want to pay yourself first? You can do this by having money automatically deducted from your paycheck and transferred into your savings account.

•  You might watch how well you’re meeting your savings goals and adjust your budget until you find the best strategies for you. If you find that the 30 day rule and/or other budget-savvy strategies have made it easy to meet those goals, is it time to up the ante and save even more?

•  If, on the other hand, there are luxury purchases that you really want to make, but they don’t fit in your current budget, consider finding a side gig to fund them.

Tracking Your Spending and Saving

The above strategies all have one thing in common. They involve tracking your spending and saving so that you can make choices that fit your budget, lifestyle, goals, and dreams.

As part of that process, it may make sense to identify where you’re overspending. The reality is that it’s gotten super easy to spend—and, therefore, overspend—in today’s frictionless financial world.

You may find that you’re spending literally hundreds of dollars a month in ways you didn’t realize, whether that’s by picking up a quick coffee at the drive-thru window, a subscription you rarely use, or something else entirely.

When you monitor spending, you can improve what you’ve measured, perhaps by eating at less expensive restaurants or making food at home more often.

Once you recognize how much you’re spending and on what, you may become inspired to make bigger changes. Maybe you’ll price compare your cell phone plan or car insurance premiums. Maybe you’ll start riding your bike to work instead of using a ride-share or get your books from the library, not the bookstore.

What may matter most is that you adjust your budget in a way that makes sense for you and allows you the freedom to spend your money on what you treasure. Yes, at first cutting down on spending can feel restrictive. But, it’s all about prioritizing how you spend, so you can put your money where it brings you the most rewards and pleasure.

And, when you build savings into your financial plan, you may be able to expand on your goals. Perhaps you’ll save for a down payment on a home, or maybe you want to pay down your bad debt more quickly so you’re paying less in interest. It’s all up to you!

Organizing Your Finances with SoFi Checking and Savings®

With a SoFi Checking and Savings account, you can track your weekly spending within the dashboard in the SoFi app. Tracking your spending can help you stay on target with your financial goals. If you’ve got multiple goals, then you can talk one-on-one with a financial planner to discuss your financial ambitions.

Check out SoFi Checking and Savings to track your spending and saving.

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