-- Think it through. "Your brain doesn't give you very reliable signals about when you should spend and when you should save, and the implication of that is that you really need to think it out," explains Loewenstein. This, in a nutshell, is why impulse buys are a no-no. How many times have you purchased something, only to regret it later? Sure, you can return it, but that's energy -- and often money, in the form of shipping or gas -- wasted. Next time, instead of impulse buying, sleep on it. If you're still thinking about it the next day or even the day after that, and you can afford the purchase, then go back and buy it.
-- Focus. Spend some time really thinking about what gives you pleasure. There is a good bit of research showing that we tend to get more pleasure from experiences than from possessions. That vacation with your family gives you memories that you can reminisce about time and time again. That new watch you don't really need won't give you quite the same effect. That doesn't mean you have to rule out buying things. What it does mean, though, is that when money is tight, as it is now, you need to put more thought into not only whether you spend, but how you spend as well.
-- Watch out for the "peanuts effect." Essentially, says Loewenstein, if the expenditure is really small, it feels like we're not spending any money at all. That's why you have no problem buying a cup of coffee or lottery tickets or a pack of gum. In your brain, they don't register as purchases. And while it's true that one pack of gum won't blow your budget, a pack a day certainly could. This thinking, by the way, can also sabotage your savings in another way. Your brain thinks a dollar doesn't add anything to your efforts, but when combined with another dollar tomorrow, and another the next day, the cash can really start to add up.
With reporting by Arielle McGowen