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Shopping is part of daily life and often a fun experience (glossy stores, cool new objects), but it can impact your budget in some not so wonderful ways. That’s where smart purchasing habits come into play.

If you know some clever ways to rein in overspending with tactics like comparison shopping and using coupons, you can help avoid blowing your budget. What’s more, you may be able to dodge excessive credit card debt, save regularly, and reach your financial goals.

9 Tips for Building Better Buying Habits

Here are nine tips for building better, more mindful purchase habits.

1. Having a Financial Goal in Mind

Motivation is a wonderful tool. To kick off better consumer habits, you may want to think about what your financial aim is and what you want to save money for in the first place.

This could be as small as wanting to save money for the perfect new handbag or to go to a hot new restaurant for an omakase dinner.

Or, it could be something much larger like saving for a vacation, a wedding, a home, or even for retirement somewhere down the line.

Having a financial goal might make it easier for you to sidestep an impulse purchase or spend money on something you don’t actually need.

To double-down on this habit, try writing down any and all financial goals in a notes app, diary, or even on a piece of paper. Then, stick it in your wallet or mobile phone case so it’s with you wherever you go. Tempted to tap or swipe your way to an impulse purchase? Check that note, and think twice.

2. Giving Every Purchase — Big or Small — a Little Time

Sometimes all it takes to reverse a buying decision is to just sit and think about it for a second. Is this new dress really all that great, and will it be worn more than once? Do you truly need a new mobile phone just because a flashy new model was released? Here are some tactics to try to decide whether or not to buy:

•   Try the “take a walk” method, which is to literally leave a store, go for a walk, and think about the item a bit more. This way, the initial adrenaline rush and excitement can wear off just a bit so you can clearly consider the purchase with fewer emotions attached.

Then, come back, look at the item again. If it still elicits butterflies, then it could be worth the purchase. If not, that’s great. Confidently walk away.

•   Want to take this habit to the next level? Try the 30-day rule. Just as the name implies, those looking to purchase anything nonessential must put the product back on the shelf and step away for a full 30 days. Put a note in your calendar, and if you still want the item after a month, you can then buy it (finances permitting), knowing it will bring them a little more joy.

Here’s one more trick to try when using the 30-day rule. Over the 30 days, try saving little by little to purchase the item. At the end of the month, if you decide that product is no longer needed, that cash could be put right into savings.

Recommended: Different Types of Budgeting Methods

3. Coming Up With a Personal Spending Mantra

If taking a walk isn’t an option, try a different method for forging better consumer habits. It may be time to come up with a personal spending mantra. This could be a saying like “Keep the memory, get rid of the object,” or Marie Kondo’s question, “Does this spark joy?”

You can briefly focus on your mantra before making any purchase. This can help determine if that object really deserves to take up space in your life and in your monthly budget.

4. Learning to Be a Comparative Shopper

Shopping around can be another way to improve your purchase habits. You never have to settle for the first price tag you see. Spending wisely can mean finding a better deal, often with just a quick online search.

To become a great comparative shopper, you can start small by investigating prices on everyday purchases like groceries. Try looking up a price comparison for milk between high-end grocery stores versus the neighborhood grocer vs. a discount store. Then, think about monthly expenses like the internet, cable, telephone bills, and even things like gym memberships or subscriptions.

Can you find a better price for any of these items or negotiate the price down? Could you wait for a sale to kick in? Go for it, and save along the way. That means more money stays in your savings or checking account.

5. Falling in Love With Coupons and Discount Codes Again

Another better buying habit to adopt: Take a minute when shopping to find a few coupons to use in physical stores and discount codes to use online.

Here’s how to coupon for beginners: Look online. There are a number of coupon websites such as RetailMeNot, Coupons.com, and The Krazy Coupon Lady that can help shoppers hunt down a few discounts when they need them.

There are also services like Honey, which is an extension you can add to your dashboard that will automatically scour the web for discount codes and plug them right in at checkout.

6. Maintaining the Things You Already Have

A hole in a sweater, a scratched coffee table, and a tiny crack in a dish can be enough to send some people hunting for an entirely new item to replace the old.

However, rather than tossing something just because it’s a little worn, it can be wise to learn how to give things a new life. Or, find an expert who can.

For example, rather than buying all new shoes just because the tread is a little worn down, try bringing them to the local cobbler (aka shoe repair). They may be able to replace the thread for a fraction of the price of new shoes. This same idea goes for big-ticket items too.

Consider keeping a maintenance calendar for things like a car’s oil changes, a home’s roof inspections, and more. That way, things will always stay in tip-top shape for longer, and you may, say, save money on your car or home repair costs.

7. Understanding Shopping Triggers

To create better spending habits, it can be worthwhile to take a bit of time to self-reflect and discover why you like to spend money in the first place.

•   Do you suffer from FOMO (fear of missing out), spending and buying things because friends, family, or a favorite influencer is sporting it on social media?

•   Do you shop when bored, as a way to add excitement to an otherwise dull day?

•   Do you tend to shop when you are feeling sad or stressed? Retail therapy is a common way to lift a mood, but it can have an impact on your financial standing.

It can be important to delve into why you shop. Doing so could also help you identify your overspending triggers and rein in habits that make you an impulse shopper.

8. Getting in on the Financial Buddy System

Here’s another tip for improving purchasing behavior. Everything’s better with friends — and that includes developing better spending habits. Here’s an example of the power of pairing up:

•   According to one landmark study by researchers at the University of Aberdeen, Scotland, people who work out with a friend are more likely to hit the gym more often than those who choose to work out alone.

That lesson can easily be applied to finances too. Find a trusted friend or family member who can offer advice or simply understanding and support as you cultivate better shopping habits.

Make a pact to call one another every time either of you needs a second opinion about making big purchases or when you need someone to talk you out of an impulse buy.

9. Knowing Where Money Is and Where It’s Going

A major part of creating better buying habits is understanding where your money stands and where it’s going. Don’t shy away from making a personal budget. Tracking apps (perhaps provided by your financial institution) can help in this effort too.

Monitoring your checking account will also help you get in touch with your spending habits. Some people find checking in every couple of days a good move.

These moves can reveal patterns that you might be unaware of and also help you see where you might cut back on expenses. That, in turn, can free up some funds so you feel better about splurging when the opportunity arises.

Recommended: 50/30/20 Budget Calculator

Smart Buying Habits Last a Lifetime

Establishing smart purchasing habits like these can set you up for a lifetime of living frugally but without deprivation. If you learn how to get the best possible deals on a daily basis and rein in overspending, you will likely be in a better position to reach your goals.

That might mean watching your retirement fund grow steadily, avoiding high-interest credit card debt, or knowing you’ll be able to afford the down payment on a house in a few years time.

Once you get in the groove of improving your habitual buying behavior, you may also feel less money stress and a greater sense of financial control.

Watch Out for Lifestyle Creep

Another way to embrace better purchasing habits is to be on the lookout for what is known as lifestyle creep. This happens when, as you earn more, your expenses rise, so building wealth is a challenge.

For example, if you change jobs and get a nice salary bump, you might decide to swap your current car lease for a pricier luxury car. After all, you deserve it, right? And you might book a trip to celebrate your new position as well. Moves like these can quickly eat up your raise and then some.

Celebrating within reason is of course part of life (and a good one, at that). However, doing so extravagantly and on an ongoing basis can wind up preventing you from reaching your financial goals.

The Takeaway

By focusing on improving your purchasing patterns, you can likely save more money. This can mean applying the 30-day rule, using coupons, and having a buddy to help you rein in overspending. It can also be wise to bank with a financial institution that not only helps your cash grow but also offers tools to help you track your spending and save smarter.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What are smart buying habits?

Smart shopping habits can include budgeting, comparison shopping, avoiding impulse buys, couponing, and putting a pause on spending.

How do you change your buying habits?

Changing your buying habits can involve recognizing your shopping patterns and triggers (such as impulse buying when bored or trying to keep up with friends) and then adopting new behaviors. This might mean comparison shopping, buddying up with a friend who is also trying to save, and unsubscribing from retailer emails that can lead to overspending.

What are buying habits?

Buying habits refers to the way a person purchases, such as whether they have a budget or usually shop online or in-store. It might also include whether they make a list or tend to make impulse purchases and if they use discounts and coupon codes or not.

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SOBNK-Q325-072

Determining how long your retirement savings will last can be a complicated, highly personal calculation. It’s based on how much you’ve saved, how you’ve chosen to invest your money, your Social Security benefit, whether you have other income streams — and more.

And even when you have all the information at your fingertips, it can be hard to make an accurate calculation, because life is fraught with unexpected events that can impact how much money we need and how long we’re going to live.

Taking those caveats into account, though, it’s still important to make an educated estimate of how much money you’re likely to accumulate by the time you retire, as well as how much you’re likely to spend.

What Factors Affect My Retirement Savings?

Here are some of the many variables that can come into play when deciding how long your retirement savings might last.

Retirement Plan Type

Whether it’s a defined-benefit plan like a pension, or a defined contribution plan like an employer-sponsored 401(k), 403(b), or 457, the kind of account you contribute to will likely have an impact on how much and what method you use to save for retirement.

Pension Plan

With a pension plan, retirement income is usually based on an employee’s tenure with the company, how much was earned, and their age at the time of retirement. Pensions can be a reliable retirement savings option when available because they reward employees with a steady income, typically once per month.

One potential downside, however, is that pension plans can be terminated if a company is acquired, goes out of business, or decides to update or suspend its employee benefits offerings. Indeed, pension plans are far less common compared with defined-contribution plans like 401(k)s and 403(b)s and the like.^[1]

401(k) Plan

With a 401(k) plan, participants can contribute either a percentage of or a predetermined amount from each paycheck. The money is deposited pre-tax, and the account holder generally owes taxes when they withdraw the money in retirement.

In some cases, the funds employees contribute are matched by their employer up to a certain amount (e.g. the employer might contribute 50 cents for every dollar up to 6%).

Unlike a pension plan, the amount of retirement funds the participant saves in a 401(k) is based on how much they personally contributed, whether they received an employer match, the rate of return on their investments, and how long they’ve had the plan.

IRA or Roth IRA

An Individual Retirement Account, or IRA, is a retirement savings account that’s not sponsored by an employer. Individuals with earned income can open an IRA. There are different types of IRAs, including traditional and Roth IRAs, which each have their own tax treatments.

For both traditional and Roth IRAs, you can contribute a certain amount a year; the amount frequently changes annually. For 2025, individuals can contribute up to $7,000, or $8,000 if they’re age 50 or older.

There are no income limits for a traditional IRA, so account holders can contribute up to the limit. Contributions are made with pre-tax dollars, and a certain amount can be deducted from your income taxes, depending on your income, tax-filing status, and whether you (or your spouse, if applicable) are covered by a workplace retirement plan. You pay taxes on your withdrawals from a traditional IRA in retirement.

On the other hand, a Roth IRA has limits on contributions based on filing status and income level. Contributions are made with after-tax dollars and withdrawals from the account are tax-free in retirement.

Recommended: How to Open Your First IRA

Less Common Plans

Other types of retirement plans like Employee Stock Ownership Plans (ESOP) and Profit Sharing Plans are less common and have their own unique benefits, drawbacks, and details. For example, with an ESOP you get shares of company stock purchased for you, with no investment on your behalf, and these plans are designed so that you receive fair market share for the stock when you leave the company. However, because an ESOP only holds shares of company stocks, there is no diversification. You’ll also owe income tax on the distributions.

Social Security

Social Security is a federally run program used to pay people ages 62 and older a continuing income. Social Security benefits are structured so that the longer you wait to claim your benefit check, the higher the amount will be. If you wait until your full retirement age — 67 for anyone born in 1960 or later, and between ages 66 and 67 for those born from 1943 to 1959 — to start collecting benefits, you’ll receive the full benefit amount. However, if you start collecting benefits at age 62, for instance, you’ll only receive about 70% of your full benefit.^[2]

Expected Rate of Return on Investments

If a person puts money into a defined-contribution plan or makes investments in stocks, bonds, real estate, or other assets, there are a number of return outcomes that could affect their retirement savings.

An investment’s performance is about more than just appreciation over time. Learning how to calculate the expected rate of return on the investment can help you get a clearer picture of what the payoff will look like when it’s time to retire.

Unexpected Expenses

One never really knows what retired life might bring. Lots of unexpected expenses could arise.

An extensive home repair or renovation or maybe even a costly relocation to another state or country might make an unforeseen dent in retirement funds.

A major medical incident or the factoring in of long-term care can be another unexpected expense, as are caregiver costs if you or a family member need help.

Some seniors are surprised to learn that health care can get costly in retirement and Medicare may not always be free. Many of the services they might need could require out-of-pocket payments that eat into savings.

As much as individuals might not want to imagine such scenarios, there could be the chance of a divorce during retirement, which could cause a redraft of the savings plan.

Creating a budget to estimate expenses is a great way to get ahead of any surprising financial setbacks that could sneak up down the line.

Inflation

Inflation can take a hefty toll on retirement savings. Even average rates of inflation might have a significant impact on how much retirement funds will actually be worth when they’re withdrawn. For example, $1,500 in January 2021 had the same buying power as $1,810.12 in October 2024.^[3]

Understanding how inflation can affect your retirement savings might ensure you have enough funds padded out to support you for the long haul.

Market Volatility and Investment Losses

Regardless of financial situation or age, checking in on retirement accounts and the climate on Wall Street could help clarify how market swings might affect your retirement savings.

Retirees with defined contribution plans might suffer financial losses if they withdraw invested funds during a volatile market. Not panicking and having enough emergency funds to cover 3 to 6 months of living expenses can help you weather the storm.

Talking to an investment advisor about rebalancing an investment account portfolio to reduce risk is another option for getting ahead of this unexpected savings speedbump.

Ways to Calculate How Much You Might Need to Retire

Are you on track for retirement? That’s something that can be calculated in many ways, which vary in efficacy depending on who you ask.

Here are a few formulas and calculations you can use to consider how much to save for retirement:

The 4 Percent Rule

The 4 Percent Rule, first used by financial planner William Bengen in 1994, assesses how different withdrawal rates can affect a person’s portfolio to ensure they won’t outlive the funds. According to the rule, “assuming a minimum requirement of 30 years of portfolio longevity, a first-year withdrawal of 4 percent, followed by inflation-adjusted withdrawals in subsequent years, should be safe [for retirement].” Bengen has since adjusted the rule to 4.5% for the first year’s withdrawal.

The jury is out on whether 4% is a safe withdrawal rate in retirement, but some financial professionals have noted that the rule is rigid and some flexibility may be called for, though it is ultimately up to each investor and their specific situation.^[4]

The Multiply by 25 Rule

This one can get a little controversial, but the Multiply by 25 rule, which expanded upon Bengen’s 4% Rule with the 1998 Trinity Study, involves taking a “hoped for” annual retirement income and multiplying it by 25 to determine how much money would be needed to retire.

For example, if you’d like to bring in $75,000 annually without working, multiply that number by 25, and you’ll find you need $1,875,000 to retire. That figure might seem scary, but it doesn’t factor in alternate sources of income like Social Security, investments, etc.

However, it’s based on a 30-year retirement period. For those hoping to retire before the age of 65, this could mean insufficient funds in the later years of life.

The Replacement Ratio

The Replacement Ratio helps estimate what percentage of someone’s pre-retirement income they’ll need to keep up with their current lifestyle during retirement.

The typical target in many studies shows 70-85% as the suggested range, but variables like income level, marital status, homeownership, health, and other demographic differences all affect a person’s desired replacement ratio, as do the types of retirement accounts they hold.

Also, the Replacement Ratio is based on how much a person was making pre-retirement, so while an 85% ratio might make sense for a household bringing in $100,000 to $150,000 per year, a household with higher earnings — say $250,000 — might not actually need $212,000 each year during retirement. A way to supplement this calculation could be to estimate how much of your current spending will stay the same during retirement.

Social Security Benefits Calculator

By entering the date of birth and highest annual work income, the Consumer Financial Protection Bureau’s Social Security Calculator can determine how much money you might receive in estimated Social Security benefits during retirement.

Other Factors To Calculate

Expected Rate of Returns

Determining the rate of return on investments in retirement can help clarify how long your savings could last. An investment’s expected rate of returns can be calculated by taking the potential return outcomes, multiplying them by the likelihood that they’ll occur, and totaling the results.

Here’s an example: If an investment has a 50% chance of gaining 30% and a 50% chance of losing 20%, the expected rate of returns would be 50% ⨉ 30% + 50% ⨉ 20%, which is an estimated 25% return on the investment.

Home Improvement Costs

If a renovation is looking like it will be necessary down the line, you might calculate how much that home repair project could cost and factor it into your retirement planning.

Inflation

You might also consider using an inflation calculator to uncover what your buying power might really be worth when you retire. To do the calculation, you could assume an annual inflation rate of around 2% to 3%, which is what most central banks consider to be modest and balanced.

Making Retirement Savings Last Longer

If you’re still wondering how long your savings will last or seeking potential ways to make it last longer, a few of these strategies could help:

Lower Fixed Expenses

Unexpected expenses are likely to creep up regardless of how much you save, but by lowering fixed expenses like mortgage and rent payments (by downsizing to a less expensive house or rental) as well as food, insurance, and transportation costs, you might be able to slow the spending of your savings over time. Setting a budget is a solid way to see this in black and white.

Maximize Social Security

While opting into Social Security benefits immediately upon eligibility at 62 might sound appealing, it could significantly reduce the benefit over time, as noted above. With smaller cost of living adjustments later in life, a lengthy retirement (people are living longer than ever before) could mean less money when you need it the most.

Stay Healthy

Unexpected medical expenses might still occur, but by safeguarding health and well-being earlier in life, you may be able to avoid costly chronic conditions like high blood pressure, diabetes, or heart disease.

Keep Earning

Whether it’s staying in the full-time workforce for a couple more years or starting a ride-share side hustle during retirement, continuing to bring in money can help you stretch your savings out a little longer.

The Takeaway

Everyone wants a secure retirement. An important step in your retirement plan is calculating how long your savings will likely last. While there is no way to know for sure, this is such an important step in long-term planning that many different methods and strategies have evolved to help people feel more in control.

There are investment strategies, tax strategies, and income strategies that can help you create a forecast of how you’re doing now, and how your retirement savings may play out in the future. Because there are so many risks and variables — from the markets to an individual’s own health — just having a basic calculation will prove useful.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).