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:
- 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.
- 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.
- 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.
- 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.
- 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.
FAQs
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.
What is the 30 day saving rule? ›
With the 30 day savings rule, you defer all non-essential purchases and impulse buys for 30 days. Instead of spending your money on something you might not need, you're going to take 30 days to think about it. At the end of this 30 day period, if you still want to make that purchase, feel free to go for it.
What is the 30 day rule for purchases? ›
Here's how it works: When you have the urge to make an impulse purchase, wait for 30 days and give yourself time to think about it. While considering the purchase, deposit the money you need for it into a savings account. If you still want to buy that item after the 30-day period is up, go for it.
What is the 50 20 30 savings rule of thumb group of answer choices? ›
The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).
What is the 30 day money challenge? ›
Do you want to save some money for holiday gifts or other short-term goals? Consider doing the 30-Day $100 Savings Challenge. The goal of the Challenge is simple: save $100 in a 30-day time period through a series of gradually increasing deposits. November has 30 days so every day is a savings day.
What is the rule for impulse buying? ›
The 1% spending rule will help you learn how to avoid impulse buying and how to control impulse buying. Luckily, the 1% spending rule is simple and goes like this - when you want to buy something that exceeds 1% of your annual gross income, you have to wait one day before buying it.
What is the 80 20 30 savings rule? ›
It is a simplified version of the 50/30/20 budget. The rule requires that you divide after-tax income into two categories: savings and everything else. As long as 20% of your income is used to pay yourself first, you're free to spend the remaining 80% on needs and wants.
What is the 75 15 10 rule? ›
In his free webinar last week, Market Briefs CEO Jaspreet Singh alerted me to a variation: the popular 75-15-10 rule. Singh called it leading your money. This iteration calls for you to put 75% of after-tax income to daily expenses, 15% to investing and 10% to savings.
Is the 50/30/20 rule realistic? ›
The 50/30/20 rule can be a good budgeting method for some, but it may not work for your unique monthly expenses. Depending on your income and where you live, earmarking 50% of your income for your needs may not be enough.
What is the 40 40 20 budget rule? ›
The 40/40/20 rule comes in during the saving phase of his wealth creation formula. Cardone says that from your gross income, 40% should be set aside for taxes, 40% should be saved, and you should live off of the remaining 20%.
For the no-spend challenge, you pay for essentials only for a set period of time. Thirty days is pretty common, so you might hear it called a no-spend month too. Basically you're covering your Four Walls (food, utilities, shelter and transportation) and other necessities, but you're saying no to all the extras.
How do you make a 30 day challenge? ›
Create routine and stick to it – make a list of three things you will do every day (that needs to be done) and stick to it for 30 days. Split your day – try working for a set time (use a digital timer) and then exercising/stretching/doing a chore for the rest of the hour.
What is $10 K in 30 days challenge? ›
The $10k in 30 Days Challenge is a self-paced coaching program designed to help anyone build a $10,000 per month email marketing business from scratch in just 30 days. This 3-step email blueprint is surprisingly simple: Build a list of email subscribers in a hot market using little-known but timeless lead sources.
What is the 70 20 10 Rule money? ›
The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.
How can I save 1000 a month? ›
The experts we spoke to recommended taking these steps.
- Analyze your finances. If you want to save $1,000 in a month, then you need to earn $1,000 more than what you spend. ...
- Plan your meals. ...
- Cut subscriptions. ...
- Make impulse purchases harder. ...
- Sell unneeded items. ...
- Find extra work.
Match each week's savings amount with the number of the week in your challenge. In other words, you'll save $1 the first week, $2 the second week, $3 the third week, and so on until you put away $52 in week 52.
How many times a month can you take money out of savings? ›
That means there's no longer any government regulation on how many monthly withdrawals you can make from your savings account. However, some banks still have their own limits in place. Most banks that have savings account withdrawal limits set the limit at six per month.
