How to Avoid Spending You'll Later Regret

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You work hard for your money, and you deserve to use some of it to enjoy life. Unfortunately, sometimes splurges don't end up bringing us the happiness we planned, and we just end up with a bunch of stuff to take care of. There's nothing worse than wasting cash on items or experiences that don't enhance your life, so it's important to make sure you're spending intentionally to avoid financial regrets.

This is easier said than done, of course. But if you take these four steps, you can make spending decisions that make more sense and are far less likely to leave you wishing you hadn't wasted that money.

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1. Consider the cost of purchases based on your hourly wage

When you look at a price tag, sometimes it's easy to forget how hard you had to work to make the money you need to buy that item. To make sure this doesn't happen, consider how many hours you'd need to work for each purchase you make.

If you work hourly, it's easy to do this calculation -- but if you have a salary, you'll have to figure out your hourly wage. You can do this by dividing your paycheck into the number of hours you had to work to earn it. If you get paid $2,500 every two weeks, then assuming you work around 40 hours a week, your hourly wage would be about $21.35 ($2,500/80 hours). If you want to buy something that costs $100, ask yourself if that item is really worth around five hours of work. This can help clarify the true cost of every purchase and ensure you buy only things it's really worth your time to get.

2. Avoid storing your credit cards online

Impulse shopping has been made a lot easier by the Internet. After all, it's really easy to click "Buy" when you don't even have to get out your credit card for the cashier to swipe. If you make the purchase a bit more difficult, you'll be a lot less likely to splurge on things you don't really need. You can do this by avoiding storing your credit cards.

When you have to get up, dig out your wallet, and type in your card info and billing address, you may decide that a purchase you're considering simply isn't worth the hassle.

3. Institute a 24-hour rule for big purchases

The bigger the splurge, the more upsetting it is when it turns out the item isn't something you'll get a lot of use out of. To significantly reduce the chances of wasted cash, institute a 24-hour rule for any purchase over $50 or $100 (or whatever amount of money you consider to be a lot).

When you put a 24-hour rule in place, you won't ever buy an item valued at more than $50 -- or whatever your limit is -- without waiting 24 hours from the time you decide you want it. You can use this time to read reviews, compare prices, and see if a cheaper item would serve you just as well. If you decide after a day that you still really want the item, at least you've taken the time to think about it and hopefully found the best price.

4. Budget for frivolous spending

One of the surest paths to financial regret is to spend money you don't really have. After all, if you overspend on something, you'll either cut back elsewhere or end up in debt and have to pay interest. So to make sure you can spend without guilt, put aside a set amount of money in your budget to spend on anything you like. Make sure you allocate funds for necessities and saving first, and then decide how much you're actually comfortable spending without making important goals harder to accomplish.

Since you'll know up front exactly how much you have to spend each month on fun purchases, you can more easily decide how using that money would provide you with the most value. This could mean using it for a fun experience rather than buying a new item, or it could mean saving up a few months of your spare cash for a truly special item that will feel like a real treat.

You can avoid spending money needlessly

By following these steps, you can put your spare cash to good use and spend it on things you'll get real value from. Your hard-earned dollars will go toward purchases that have proved their worth, and you'll feel a lot better about what you're doing with your money, since you'll be spending it intentionally.

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