Budgeting Help

Budgeting For Happiness: Your New Spending Plan

Budgeting Help, Cash Flow Planning, Women and Money / By /
New Spending Plan

Many women resist traditional budgeting because it feels so restrictive. Your new spending plan prioritizes what’s most important to you.

At the mention of the word “budget,” many people cringe. Like the word “diet,” it brings about a sense of dread, thoughts of deprivation, and the possibility of failure. Instead of focusing on the long-term rewards of effective budgeting, you start to focus on what you can’t have right now. When that deprivation mentality kicks in, it makes mindless shopping or impulse purchases harder to resist. But don’t fret; this mindset is fixable if you take a different approach with your spending plan.

The Psychology of Budgeting

There’s a psychological side to budgeting. It involves motivation, discipline, and often a bit of creativity. The idea of budgeting creates an emotional response in your brain, and it’s not always a good one. Creating and sticking to a budget can feel like yet another task on your already endless to-do list, not to mention the fact that this task also involves math, which most of us tend to avoid. But stick with me here because you do need a budget, just not the kind that fills you with an impending sense of doom. 

Why You Need a Budget 

As challenging as it can be, budgeting is a necessary not-so-evil. For starters, identifying where your money is going every month can help you find ways to cut back, increase your savings, and work toward your financial goals. A recent U.S. Bank study revealed that only 41% of Americans use a budget, even though it’s one of the most effective ways to keep track of our finances. 

It’s time to try a better way. Budgeting can help you improve your financial security, limit unaligned spending, and avoid debt and financial stress. It’s one of the quickest and easiest ways to increase your financial control and sense of financial fulfillment. 

What If There Were a Better Way? 

The key to better budgeting is to make it feel less like deprivation and more like prioritization. Understanding your core values, financial and otherwise, and aligning your spending with them can be very motivating. And when you feel more aligned, it tends to lead to greater fulfillment and better habits. 

Here are some suggestions for aligning your new budget spending plan with your values: 

  • Create a financial plan that emphasizes your goals, whether that’s early retirement, real estate investments, or that long-awaited vacation  
  • If you’re estimating costs, it’s always better to be conservative (i.e., overestimate rather than underestimate)
  • Link your spending to things that you value—this may require some self-reflection work, but it will be worth it 
  • Use visuals to maintain your motivation (pop pictures on the wall over your desk or create a vision board on Pinterest), and revisit your goals regularly  
  • Give yourself grace and a chance to rework the numbers or try again if you fall off track 

Your New Spending Plan

To implement these ideas in your own budget, download The Happiness Spreadsheet for a fresh, inspiring approach to budgeting that aligns your spending plan with your values.

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12 Simple Steps to Financial Success

Budgeting Help, Cash Flow Planning, Simple Truths About Money, Women and Money / By /
12 Simple Steps to Financial Success

This article was originally published December 29, 2011. In the spirit of ongoing financial wellness, we thought we’d give 12 Simple Steps to Financial Success a refresh for 2021 and repost. Happy new year!

The new year is upon us, and January is always a good time to look towards the future and recommit to past personal finance goals or create new ones. Just in time to round out your new year’s resolutions, here are some simple steps all independent women can take for a more financially successful 2021.

12 Simple Steps to Financial Success This Year:

  1. Develop a habit of saving. It’s never too early or too late to start.
  2. Build a budget that aligns with your values. Think about what makes you happy and then allocate your money accordingly.
  3. Create a financial plan that reflects your most cherished goals. Think of it as a roadmap to happiness.
  4. Invest the maximum amount you can for retirement. You will need more money than you think.
  5. Build and maintain a diversified investment portfolio. Don’t worry about finding the “best” investment.
  6. Review your spending periodically to keep yourself on track. It’s the key to living within your means.
  7. When it comes to investing, avoid the crowd—and tips from well-meaning friends and relatives.
  8. Understand that volatility is a normal occurrence when investing in stocks. Keep a cool head and stick to your plan.
  9. Know what your money is doing. They say ignorance is bliss, but that’s not the case when it comes to your finances.
  10. Insurance protects you from the unexpected. It’s just smart to have the right coverage.
  11. Choose your advisors wisely: Find people you like, trust, and who will listen to you.
  12. Spend on the things and experiences that make you happy. They make life worth living!

Your New Year’s Challenge

Choose one of these 12 simple steps to financial success as your new year’s resolution for your finances and write a short (200–250 word) journal entry describing how you’ll put it into action. Studies show that just writing down your goals increases the likelihood that you’ll achieve them. Then, review your plan routinely throughout the year so your resolution is always front-of-mind.

If you’d like to work on any or all of these steps with a trusted financial partner, please get in touch. We are here to help!  

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Creating New Spending Habits After Shelter-In-Place

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Cooking At Home
One of the most desired and, at the same time, hardest-to-do financial tasks is to create a budget and stick to it. I know this from my personal experience and that of my clients. It is the rare person who enjoys purposefully creating spending limits – because that is what a budget does – it sets limits on spending. These limits are necessary to reach important savings goals like retiring or buying a house, but that doesn’t make them any more comfortable. What if there was an easier way to create new spending habits? Why not take this rare opportunity to create new spending habits instead of going back to the old? Admit it- you enjoy cooking more than you thought you did, and you can’t believe how much money you are saving by not eating out as much. You look in your closet and you are dismayed about how many clothes you own and don’t wear – and you don’t think you will need them after you no longer have to shelter-in-place. You’ve enjoyed neighborhood walks and Zoom Zumba classes much more than you ever liked going to the gym. If this is you – take the opportunity to build a new budget around this lifestyle. You don’t have to eliminate all past activities that you once enjoyed, but you may find it much easier to cut back now. Want to make budgeting more fun? Download The Happiness Spreadsheet, a free tool that helps you create a budget you can live by!
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THE CARES ACT REVIEW PART V: Health Provisions

Budgeting Help, Cash Flow Planning, Healthcare and Money, Women and Health, Women and Money / By /
Photo by Ani Kolleshi on Unsplash

One of the objectives of the Coronavirus Aid, Relief and Economic Security Act (CARES) is to help people get the care they need with fewer obstacles and less-in-person contact. It adds to the health provisions in a bill passed in March – the Families First Coronavirus Response Act (FFCRA).

The CARES ACT health provisions will be most beneficial to families with High Deductible Health Insurance plans (HDHPs) and health savings accounts (HSAs) or flexible spending accounts (FSAs), which are pre-tax savings accounts for healthcare expenses. However, Medicare Part D participants and anyone who gets a test for COVID-19 will benefit too.

EXPANDED USE OF HSAs
Temporary provision:
-Telehealth services used to be subject a deductible, now they are covered before a patient has met the plan deductible. Usual cost-sharing, such a co-pay, is still allowed. This provision will sunset in December 2020.

Permanent and retroactive to January 1, 2020 provisions:
-It’s now ok to buy over-the-counter medical products, such as OTC drugs and surgical masks, without a prescription and get reimbursed by an HSA. With the prior rules, effective since January 2011, a prescription was necessary for reimbursement.
-Certain menstrual care products such as tampons and pads are now reimbursable medical expenses.

PLANNING TIP: For individuals and families experiencing cash flow issues some of the existing HSA rules can help. For example, there are no time restrictions or deadlines for when you can reimburse yourself from your HSA. You can claim reimbursement for eligible items if you have proof of purchase as far back as when you first opened the account.

PLANNING TIP: While HSA can’t be used to cover your share of employer-provided medical insurance, they can be used by unemployed people to pay premiums on an independent policy or coverage through COBRA.

COVID-19 TESTING WITHOUT COST SHARING
The FFCRA mandates that private insurance companies and Medicare cover COVID-19 testing and a vaccine for free. The CARES Act extends free testing to any services or items provided during a medical visit that results in coronavirus testing. Medical visits can be in-person, a telehealth visit, an urgent care or emergency room visit. This benefit remains in effect only while there is a declared public health emergency. It’s not certain if self-administered tests (if and when available) will be covered.

The CARES ACT also clarifies that Medicaid must cover such tests regardless of whether they are authorized for emergency use by the FDA.


PRESCRIPTION SUPPLY BENEFIT
Medicare PART D recipients can order up to a 90 day supply of medications. Prior to the CARES Act passing, a PART D insurance plan had the option to relax their “refill too soon” restrictions but now they are required to do so. The change is designed so that all Part D enrollees can get an extended supply of medications during the COVID-19 public health emergency.

PLANNING TIP: Place orders of your medications for 90-day supplies to save trips to the pharmacy and the hassle of having to reorder in less time.

SOME OTHER HEALTH PROVISIONS
-Reauthorization of programs to strengthen rural community health, the Healthy Start program, Temporary Assistance for Needy Families
-Dollars to support domestic food assistance programs (breakfast and school lunch, SNAP, emergency food assistance.
-Funding for the Defense Production Act, Pandemic Response Accountability Committee, Disaster Relief Fund, FEMA, Indian Health Service, CDC, Substance Abuse and Mental Health Services Administration, CMS, Public Health and Social Social Services Emergency Fund and others.

If you missed Part IV: Review of the Paycheck Protection Program (PPP) go here.
And, for a comprehensive article about HSAs, go here.

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Updated for 2020: Triple Tax Savings For You: Health Savings Plan (HSAs) Explained

Budgeting Help, Financial Planning, Healthcare and Money, Women and Money / By /
Photo by Micheile Henderson on Unsplash

If you don’t know about Health Savings Accounts (HSA’s) and are eligible to open one, you’re missing out on an excellent savings vehicle with fantastic tax benefits.

What is an HSA?

An HSA is a tax-exempt trust or custodial account established with a bank, insurance company or other IRS-approved entity. They are triple tax-advantaged – contributions are pre-tax/tax-deductible, earnings grow tax-free, and withdrawals are tax-free if used for qualified medical expenses. Hence, the triple tax savings.

These accounts are for medical expenses, but you don’t have to use up the balance during the year. Unused balances roll over from year to year, and you can invest the money for growth. For people who have adequate cash flow, low to average health care costs, and pay high taxes – the best way to use HSA’s is as a long-term savings account for medical expenses in retirement when healthcare costs tend to go up. In this case, you will benefit most from opening an HSA that has good investment options – low-cost ETF’s and mutual funds and take full advantage of compounding growth of your funds.

For those who are on a tighter budget, HSA’s are a great tool for lowering the cost of your medical costs through tax-saving. HSA funds can also be accessed when an emergency hits -such as with a sudden job loss or healthcare crisis as with COVID-19.

Eligibility

You must be an “eligible individual” to qualify for an HSA, which means that:

  • You must have a high-deductible health plan (HDHP). The IRS definition of a “high-deductible” plan in 2020 is a policy with a deductible of at least $1,400 per individual or $2,800 for a family, and whose out-of-pocket maximum is at most $6,900 per individual and or $13,800 per family.You can enroll in a high-deductible health plan through your employer, or on your own as an employee or a self-employed individual.There can be advantages to joining your employer’s plan: if the HSA is part of a Section 125 cafeteria plan and administered by a payroll deduction, the contributions will not only be Federal tax-free, they will be free of FICA taxes as well – an additional tax savings of 7.65%.Your employer may make contributions on your behalf that aren’t counted against your maximum contribution and are exempt from FICA taxes as well. Self-employed individuals do not avoid FICA taxes with their contributions to an HSA. Each State taxes HSA’s differently. For example, California prohibits a state tax deduction for an HSA contribution.
  • You cannot have other health-care coverage except what the IRS considers permissible coverage, for example, plans with limited coverage, such as dental or vision plans.
  • You can’t be a Medicare recipient. Some people who are still working at age 65 delay Medicare so they can continue contributing to an HSA -this could be a good strategy for certain individuals.
  • You can’t be a dependent on someone else’s income tax return.

Contribution Limits for 2020

If you qualify, you can contribute as much as $3,550 to an HSA in 2020 if you have individual health coverage, or $7,100 if you have a family health plan. Moreover, if you’re 55 or older, you can contribute an additional $1,000 as a catch-up contribution. Contribution amounts can be flexible and can be made any time during the year up to the tax-filing deadline in April of the next year. For, 2020 the deadline for contributions has been extended until July 15th.

The money in your HSA remains available for future qualified medical expenses even if you change health insurance plans, change employers or retire. Funds left in your account continue to grow tax-free.

What medical expenses are eligible?

You would use your HSA funds for health expenses that aren’t covered by your traditional health insurance, and many are eligible*, for example:

  • Acupuncture
  • Alcoholism treatment
  • Ambulance services
  • Chiropractors
  • Contact lens supplies
  • Dental treatments
  • Diagnostic services
  • Doctor’s fees
  • Eye exams, glasses, and surgery
  • Fertility services
  • Guide dogs
  • Hearing aids and batteries
  • Hospital services
  • Insulin
  • Lab fees
  • Prescription medications
  • Over the counter medicines and supplies*
  • Menstrual care products*
  • Nursing services
  • Surgery
  • Psychiatric care
  • Telephone equipment for the visually or hearing impaired
  • Therapy or counseling
  • Wheelchairs
  • X-rays

*New with the passage of the CARES Act in March 2020.

Whether you have a self-only or a family health insurance policy, HSA money may be spent on medical expenses for you, your spouse and current tax dependents.

You can’t pay medical insurance premiums out of your HSA. However, HSAs can pay for premiums for long-term care insurance (subject to certain limits); health-care continuation coverage (e.g. COBRA); health-care coverage while receiving federal or state unemployment compensation; and Medicare parts A, B, D, Medicare HMO, and Medicare Advantage Plan premiums, if you’re at least 65. HSA’s cannot be used to cover Medigap premiums.  

Penalties for Non-Compliance

The penalty for taking a non-qualified withdrawal from an HSA is high – you must pay taxes on it plus a 20% penalty if you are under age 65.  So the triple-tax benefit is broken. If you are over 65, there is no penalty on non-qualified withdrawals, but taxes apply in the year of the withdrawal. 

Mechanics of Opening An Account and Using It

You must have an HDHP before you can sign up for a Health Savings Account. Besides working with your employer’s option if you are an employee, many institutions offer HSA’s including insurance companies, banks, or credit unions. You can search the internet for HSA providers.

Depending on the HSA, reimbursements are made by check, ACH transfer, or ATM withdrawal. Good recordkeeping is critical because there are no time restrictions or deadlines for when you can reimburse yourself from the account. You have to keep your receipts to document the date of purchase and also as proof the expense is qualified.  Medical expenses you incurred before the HSA was open aren’t eligible.

Fees

Some HSAs charge monthly maintenance or per-transaction fees, which vary by institution. Some providers waive the fees if you maintain a certain minimum balance. So, it pays to shop around.

What happens to your HSA when you die?

If you designate someone other than a spouse as a beneficiary, the fair market value of the account on the date of death is taxable to the recipient in the year of your death.  If your beneficiary is your spouse, he/she can use the HSA are their own. If you die without a designated beneficiary, the value goes into your estate and is includable on your final tax return.

As you can see, there are many benefits to HSA’s, here are a few more that are unique to this savings vehicle:

  • There are no maximum income thresholds that you can disqualify you from opening an HSA.
  • There are no Required Minimum Distributions (RMD’s).
  • You can be unemployed and contribute to an HSA.

I think you can agree that if you can afford to pay your uncovered medical expenses out of pocket now, and can fully fund your HSA every year invested for growth, you will have a nice nest-egg for health expenses when you are no longer working.

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The CARES Act Reviewed: Part III Expanded Unemployment Benefits

Budgeting Help, Cash Flow Planning, Financial Planning, Healthcare and Money, Women and Health, Women and Money / By /
Photo Credit: Annie Spratt, Unsplash

MILLIONS OF PEOPLE ARE OUT OF WORK

With millions of people out of work due to the Coronavirus, the CARES Act provides much-needed relief in the form of expanded unemployment benefits. It covers workers previously ineligible for benefits, including self-employed, part-time workers, gig workers, freelancers, and independent contractors. It also helps those who have recently exhausted their weeks of benefits and those who haven’t earned enough to qualify for state unemployment. And, it offers benefits to those who are personally affected by the virus due to being ill themselves or being a caretaker to a family member who is sick and many more.

A new program of this size and scope will take a lot of time to get set up and it’s challenging to get the most up-to-date and accurate information. For people who are applying for benefits, the wait-times are long, and state websites are crashing. And there are stories that some workers won’t get the full benefit due to not being able to document their income fully. But it will help many people.

DETAILS
Here are details that I have been able to glean so far:

Federal Pandemic Unemployment Compensation

This is an addition to regular state unemployment checks.
Those who have lost their jobs will get whatever their state usually provides for unemployment, plus $600 per week for up to July 31.

Federal Pandemic Emergency Unemployment Compensation:

People who have exhausted their regular State benefits (which max-out at 26 weeks in California), could get up to 13 more weeks, for a total of 39 weeks.

Federal Pandemic Unemployment Assistance

For newly eligible workers.
The program will provide temporary unemployment assistance to the self-employed and people unable to work for many reasons due to the COVID-19 emergency, for example, people who have contracted the virus, caretakers, people who can’t work because of quarantines, or the person’s place of business has closed. This program does not require a person to actively seek work to receive benefits like most state programs. The benefits are available for the duration of the covered person’s inability to work, beginning retroactively to January 27, 2020, and ending on December 31, 2020, up to a maximum of 39 weeks. These benefits will be no less than $600 a week.

Federal Incentives to Create Short-Time Compensation Programs

The Federal Government will fund 100% of the costs for states that currently have an STC program (California has one) and 50% for those states that choose to implement one through December 2020. These programs are also known as work-sharing or shared-work programs and are an alternative to layoffs for employers experiencing a reduction in available work.

Note: This bill leaves out those workers who are able to work from home, and those receiving paid sick leave or paid family leave. New entrants to the workforce who cannot find jobs would also be ineligible.

Here are some additional resources:

If you missed Part II: Retirement Account Provisions, go here

Next up: The CARES ACT and Small-Business Provisions

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Budgeting for Happiness with Spreadsheets On Spreadsheet Day

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Nowadays, it seems there is a “day” for everything. And, today, October 17, is spreadsheet day. Spreadsheet day commemorates the day the first spreadsheet program, Visicalc, was released way back in 1979. Spreadsheets are a great tool because they help us to organize and categorize data into a logical format. Then, we can use them to analyze or help solve a problem or create a solution. 

Cash Flow Spreadsheets 

As a financial planner, one of the things I help people with is their cash flow – making sure that what comes in and what goes out is sustainable over a lifetime. It starts with a typical spreadsheet – a list of items and what they cost each year and then projected out over several years. The columns and rows add up into numbers that can be analyzed. 

But when it comes to spending, it’s not as easy as it sounds. Since resources are finite for most people, where the money goes has a significant impact on a person’s quality of life. Lots of people lose sight of this in living and spending day-to-day. For example, they may spend money on things or experiences that aren’t that important to them, and not have money left over for the things that are. Or, they may have a long term goal that requires saving up for, yet, they continue to deplete their checking account each month without saving a dime. 

Some of this spending behavior is a function of how our brains work. Immediate gratification is very compelling, and it’s hard to focus on longer-term goals unless we make it a habit. Another brain feature that makes it hard to be a disciplined spender is that our brains like novelty. We prefer new and shiny objects or situations – much more than the same old, same old. These biological brain cravings are hard to overcome unless we do it on purpose. That is where my brain hack for controlling spending comes in, and yes, it’s a spreadsheet: The Happiness Spreadsheet.

The Happiness Spreadsheet- what is it?

Filling out a Happiness Spreadsheet requires you to think hard and identify the things and experiences that are the most satisfying to you.  

It also required you to admit that you may be spending money on things that aren’t important to you at all. For example, you may own an expensive car that costs a lot to maintain and is a hassle to park, when you would rather walk, take public transportation, or rideshare. Or, you love to cook and eat simple healthy meals, but instead, you eat out four times a week. Once you identify your values and desires, you can focus on bringing more of them into your life through your spending habits.

Want to give the Happiness Sheet a try? You can download a free copy here: https://www.curtisfinancialplanning.com.

Happy spreadsheeting!

 

 

 

 

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The Importance of Financial Education

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Photo Credit: Edwin Andrade, Unsplash

It’s a well-known fact that America has a huge financial literacy problem. The causes of this lack of financial knowledge are often cited as a deficiency of personal finance education in schools or at home. Personally, I would love to see personal finance as a mandatory senior year high school course. I think it would reduce the rate of debt mismanagement in college – both credit card and student loan debt; start young adults on a path to good credit early; and decrease the anxiety of knowing how to handle money as young adults.

A Course in Personal Finance
Recently, I was asked to teach a personal finance class at a local college. I was thrilled for the opportunity and worked diligently on the syllabus, the curriculum, and the slides for the four summer classes. 16 students signed up for the course, 6 of whom need the credit for their MBA degree. The average age of the students is 28, and mostly women.

The most surprising aspect of my experience is the enthusiastic response from the students to the subject matter. The first class focused on personal budgeting and retirement plans. To get these young people thinking critically about their spending, I had them read an ebook I wrote called the Happiness Spreadsheet (a free copy can be downloaded from my website). The book espouses the idea that if you think consciously about the relationship between your spending, what you value, and your happiness, it is easier to create a budget that will stick. Many students had never looked at their spending habits in this way, and it inspired them to do the work.

Learning About Retirement Plans
When it came to retirement savings plans, I was less surprised by the elementary knowledge of the majority of the students. Earlier in the class, I asked them to rank their financial literacy from 1- 10. The average response was 5. I was encouraged when two of the students immediately acted and opened up Roth IRA’s the following week, and others expressed greater interest in how their 401(k) was invested.

In the second class, I focused on credit and debt.

Some of the students had already experienced credit woes. One woman misused credit cards in college but was able to dig herself out and rebuild her credit. She has a credit score over 700 now. Another got into credit trouble after a divorce. She managed to bring her score up from the low 600’s to 700 by diligently going through her credit report to get joint accounts paid off and closed. Another student has stellar credit with an over 800 score. Her goal is to buy a house and has asked for help in reaching this goal.

Future classes will focus on investments and retirement planning. In the end, I will be happy if the students learn 3 concepts from the course:

1. The tax benefits and flexibility of the Roth IRA.
2. The benefits of saving early and the power of compounding.
3. How important it is to build good credit.

Of course, there is so much more to having a successful financial life, but if acted upon, these three concepts will lay a great foundation.

How To Make Sure You See All the Places On Your Bucket List

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Photo Credit: Tom Barrett, Unsplash

Americans love to travel. When I ask my clients what they want more of in their life now and later, the most common answer includes “I want to travel more.” And, many tell me that their travel spending is a non-negotiable expense. This wanderlust grows after retirement as the time constraint that existed while working is gone.

Travel Isn’t Cheap and Priorities Change
But travel isn’t cheap and is something that needs to be planned for especially when the paychecks stop. It doesn’t help that after a certain age, traveling on a budget is not as appealing. We want to enjoy some luxury while on the road, or at the minimum a home-like experience. This means that besides the basics: a clean room, good lighting, and reliable hot running water, we want crisp white sheets, a firm mattress, a fluffy bathrobe, and high-quality toiletries.

Another shift happens as one gets older, the job of planning every detail of a trip – from hotels to meals to excursions gets less appealing, and opting for a group tour (even with the risk of traveling with strangers) becomes more attractive. This type of travel can come at an extra cost.

How sad it would be if a person who loves to travel reaches retirement and realizes that they can’t afford to go to all the places on their bucket list!

So, if you are a person that is continuously daydreaming about where you want to go next, and your bucket list never gets shorter, there is only one answer: make saving for travel a priority.

If you need some help in creating a budget that aligns with the things you most value (like travel), please download a free copy of The Happiness Spreadsheet: How To Create A Life Aligned With Your Values, Beliefs, and Ideals. I think you will find it helpful. Happy traveling!

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25 Tips to Get Your Clothes Shopping Habit Under Control

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If your shopping habit is interfering with reaching other financial goals, getting you into trouble with your significant other, causing you to rack up credit card debt, or just simply makes you feel bad about yourself, this article is for you.

The first step is to face reality. Go over last year’s credit card and bank statements and figure out how much money went to clothing and accessories. Then, cut back 20% from your past spending at first. (To try to cut spending too much at first is a recipe for failure, so best to do it in stages).

Now that you have a new budget, here are some tips to stick to it. Notice that many of these tips are as much about the psychology of shopping as they are about the acquiring of new clothing, shoes, and accessories.

1. Try very hard to schedule shopping trips and not spontaneously drop into your favorite stores just to “take a look at what is new.”

2. Don’t shop when you are lonely, tired, frustrated, anxious or bored.

3. Avoid shopping immediately after a setback or a major victory.

4. When the adrenalin kicks in and you catch yourself in a shopping frenzy, leave the store before buying anything and get centered.

5. Don’t let friends, shop-owners or salespeople convince you that something looks great on you when you don’t think it does, or its just not your style.

6. Decide what you need in your wardrobe and make a list. Take the list with you when you go shopping.

7. Before you buy anything on sale ask yourself whether you would buy it at full price.

8. Think quality, not quantity. Not only will the item of clothing last longer, but you are likely to love it longer too.

9. Stop the rationalizing- you don’t need a whole new wardrobe because you got a new job or because you now work at home.

10. Buy things you’re going to wear now, not for a far-off occasion or event that may never happen.

11. Buy clothing for the way you live now, not for the way you wish you were living. (Buying a fancy dress when you never go to fancy parties.)

12. Avoid buying one-off pieces of clothing that don’t go with anything in your wardrobe.

13. Don’t buy clothing in the wrong size thinking either that you will lose weight or that you will have it “taken in”. (Although, having a good tailor is worth its weight in gold).

14. Try shopping with cash, not credit cards – easier to set limits.

15. Limit the number of trendy items you buy to just a small percentage of your wardrobe.

18. Think #10 – everything you buy should be as close to a “10” as possible.

19. Realize that a new dress, skirt, blouse or jacket are not going to make you more beautiful or change your life.

20. To help make better buying decisions, analyze your wardrobe to understand what your favorite go-to pieces are. What are the common themes?

21. Hone-in on what colors and styles look best on you to limit choices.

22. Instead of going shopping with girlfriends, do something else, go for a hike, to a museum, out to lunch.

23. One-in, one-out rule. (If your wardrobe is very large, you may want to release 2 or 3 pieces for each that you buy).

24. Think like an economist and analyze cost per wear before buying.

25. Now, track your clothing and accessory spending for a few months. Set a new lower budget for the next month. Tracking will also show whether you buy the same items over and over, which is very common. How many pairs of jeans or black tank tops does one need?

It may take several attempts to kick the shopping habit. But with each small victory, you will get stronger. Just think about all the time and money you will gain by not buying so many clothes and what else you can do with it to make your life better.

p.s. This post is written by someone who loves fashion and who continues to incorporate these tips into her own shopping habits 🙂

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The Happiness Spreadsheet

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