If you’ve ever made a quick purchase that didn’t quite align with your financial goals, you’re not alone. It happens to the best of us! In this episode, Danielle Hayden, CPA and founder of Kickstart Accounting, Inc., tackles the challenge of impulse spending as an entrepreneur with a practical approach that’s meant to empower you, not make you feel guilty.
Whether you're a free spender, saver, perfectionist, or balance seeker, this episode is filled with strategies you can use to stay in control of your money, help curb those impulse purchases, and make smarter financial decisions that align with your goals, personality, and core values.
Key Takeaways:
- Know Your Money Personality: Understanding whether you're a Free Spender, Saver, Perfectionist, or Balance Seeker can help you become more mindful of your financial habits and tailor your strategies accordingly.
- Step 1 - Budgeting as a Planning Tool: A budget isn’t about restriction, it’s your business’s roadmap. Setting aside time to plan expenses helps you make smarter, more intentional decisions.
- Step 2 - Use the 48-Hour Rule: Delaying purchases by just two days can dramatically reduce impulse spending and give you space to assess alignment with your budget and goals.
- Step 3 - Don’t Decide Based on Price Alone: The cheapest option isn’t always the best fit. Consider alignment with your values, quality of service, and long-term ROI when choosing vendors.
- Step 4 - Review Existing Vendors First: Before jumping ship, explore whether your current tools or service providers can meet your evolving needs. Feedback and a simple conversation could reveal untapped value.
- Step 5 - Plan for Impulse Spending: Set aside an “allowance” in your budget for unplanned yet exciting opportunities. This helps you stay flexible without blowing up your financial goals.
- Step 6 - Avoid Last-Minute Decisions: Waiting until the final hour leads to rushed (and usually regrettable) choices. Plan ahead for renewals, tax time, and big expenses.
- Step 7 - Review Financials Monthly: Regularly reviewing your KSA Snapshot and financials keeps you grounded in reality, reveals patterns, and helps you make better decisions month over month.
- Bonus - Involve Your Money Team: Share your goals with your financial team so they can hold you accountable, offer insights, and help course-correct when needed.
Topics Discussed:
How Your Money Personality Type Affects Your Spending (00:00:16 – 00:02:12)
Why a Budget is Necessary to Help with Spending Freedom (00:02:12 – 00:03:02)
Ways to Help Curb Impulse Buying (00:03:02 – 00:08:38)
Planning for Unexpected Opportunities or “Allowance Budgeting” (00:08:38 – 00:09:58)
Using Monthly Financial Reviews to Keep Your Spending Aligned with Your Goals (00:12:01 - 00:13:40)
Resources:
Money Personality Quiz | kickstartaccountinginc.com/quiz
Book a Call with Kickstart Accounting, Inc.:
https://kickstartaccountinginc.com/book
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Facebook | https://www.facebook.com/kickstartaccountinginc
Episode Transcript
00:00:00:00 - 00:00:29:19
Danielle Hayden
Hello and welcome back to Business by the Books, the podcast that teaches you how to use your financials to better manage your business. Today we're going to be talking about how to cut impulse spending. Now, we have found that entrepreneurs, all people but especially entrepreneurs, fall into one of four money personality categories. The first one is our free spenders.
00:00:29:23 - 00:00:57:11
Danielle Hayden
Our free spenders love to spend money without thinking about what are their current financials say. How are the things going in business? What does my savings or my budget say for me for spending this month or this quarter? They want to make the purchase and they are determined to do so. Then we have our savers. Our savers never really feel like they have enough in savings.
00:00:57:13 - 00:01:23:08
Danielle Hayden
Often with these business owners, I'll ask them on client calls to say, well, what are you saving for? Well, I’m just reinvesting in my business. Okay, what are you reinvesting in? My business. But where are you spending money? And the answer is that they're holding on to those dollars. They're savers. And honestly, no amount of money or savings really ever feels like enough for our savers.
00:01:23:10 - 00:01:52:07
Danielle Hayden
Then we have our perfectionists. Our perfectionists love to know where every single dollar is coming in and where every single dollar is being spent. They are not spending any money unless they know exactly how it's going to impact their budget and their financials. Then we have our balance because our balance seekers. They know that they have to spend money in order to make money.
00:01:52:09 - 00:02:19:18
Danielle Hayden
They know that in order to have a long-term, healthy, sustainable business, that they have to spend money. That they want to know that when they're spending money, that they are spending money in the right area. Today's episode is especially for my free spenders, but I think that all of us can use these habits in our life. So the first habit to create to cut impulse spending is to make a budget.
00:02:19:20 - 00:02:43:13
Danielle Hayden
You guys have heard me on the podcast before, I love budgeting as a tool for planning. I think every single business owner deserves to have a budget in their business. A budget allows us to take time out of our business. We're always working in our business, and the budget process allows us to spend 60, 90 minutes planning and charting the future.
00:02:43:19 - 00:03:06:03
Danielle Hayden
Like I said, we're gonna have to spend money in our business to grow. Let's plan out those expenses thoughtfully so we know it's three months, six months that that is in alignment with where we want to go. We are creating the map for ourselves to follow in the future. Number two is to practice the 48-hour rule.
00:03:06:06 - 00:03:26:17
Danielle Hayden
I love this rule, and I actually enforce that both in business and personally for myself. So when there's something that I want to make a purchase on, whether it be for business or personal, I make myself wait for 48 hours. You guys, I am such a quick start. I am ready, like when I know that I want to do something,
00:03:26:17 - 00:03:57:07
Danielle Hayden
I am ready to get it done and get it done right away. However, I know that that doesn't always serve us, especially when it comes to our finances. So before you choose to move forward, practice that 48-hour rule so that you can be thoughtful. You can ensure that the spending aligns with your budget. You can take a peek at your snapshot from last month, your financials, and last month to see how your financials are are for this year
00:03:57:09 - 00:04:24:16
Danielle Hayden
before spending money, right? That is one of our best ways to cut impulse spending. Number three is to stop making decisions based on price. Now I can still hear my mother saying, you get what you pay for, Danielle. And when we make decisions based on the lowest vendor or the lowest provider, we end up getting what we pay for.
00:04:24:18 - 00:04:53:06
Danielle Hayden
You know, even here at Kickstart and KSA Tax Partners, we're not always the cheapest option. That's because we are working with team members and with our staff who are of the highest caliber, and we are working really hard to serve our clients at the highest level. And if our clients were only making decisions based on price, they wouldn't have the opportunity to see what it's like to work with people of that caliber.
00:04:53:08 - 00:05:23:12
Danielle Hayden
So remember, as you're making decisions on how to spend your money, stop making decisions just based on price. You need to find the right alignment between core values, personality, and the needs overall of yourself and your business. When you are choosing a new vendor or software or coach, what is the guarantee from that vendor or software? I'll use Kickstart as an example.
00:05:23:13 - 00:05:43:22
Danielle Hayden
So here at Kickstart Accounting, we offer our clients a guarantee that they can cancel at any time. This is actually very rare in our industry. We do not lock our clients into long-term contracts. We want to do business with people who want to do business with us and we want our clients to know that they can leave at any time.
00:05:44:00 - 00:06:13:02
Danielle Hayden
So when you're looking at spending, a great way to pause before doing the impulse spending is to look at the guarantee from that vendor or software. If you are going to lock yourself into a long-term contract, or there's going to be a large investment in this set up, then you could pause at this moment to determine if this is the right spending initiative for you and your business.
00:06:13:04 - 00:06:20:15
Danielle Hayden
Does this vendor or software have an alignment with you and your business of your core values?
00:06:20:17 - 00:06:40:05
Aubrey Philipp
Quick question before we return: Have you ever wondered how your personality influences your financial decisions? Take our quiz to discover your money personality and learn how to leverage your strengths for financial success. Visit KickstartAccountingInc.com/quiz or check the show notes. Now back to the show.
00:06:40:07 - 00:07:12:13
Danielle Hayden
All right, next we have before moving vendors, reevaluate the vendors that you are currently using that offer other services. Our clients often come to us for bookkeeping. They know that they need help organizing their finances, and over time, they join our CFO and tax services. But that's because they took the time to have a conversation with us about what those additional services look like and how they can help them as business owners.
00:07:12:15 - 00:07:40:21
Danielle Hayden
So before you move vendors or software providers, what are the new features that that vendor or software has come up with over time that they didn't initially offer that you can take advantage of? You know, this happens all the time with software providers. You know, as business owners, as businesses, we are always adding new features and tools. That often happens with our software providers.
00:07:40:23 - 00:08:17:09
Danielle Hayden
So before you go and cancel and go create a whole new onboarding initiative with a new software provider, what new tools and features has that software implemented or has in line to be implemented? I am always so surprised how often people are willing to hear my feedback and willingness to completely embrace feedback. If you're willing to have a conversation with your vendor or service provider, they might be willing to really hear you and make changes to help serve you as their client.
00:08:17:15 - 00:08:37:19
Danielle Hayden
If you have feedback for us on our services, I want to hear from you. You can always email us to give us your feedback. I have been surprised at how many of our software vendors have been willing to hear from us, and we have been watching them implement our feedback and our strategies, and it is so cool to see that unfold.
00:08:37:21 - 00:09:05:01
Danielle Hayden
This is going to sound counterintuitive, but I want you to plan for impulse buying. Yes, you heard me. If you are somebody who loves to make these types of purchases, I want you to have dollars in your budget to allow for impulse buying. I have a hard time when we create our budget, and even when I'm creating budgets for clients to be able to plan out every single purchase I'm going to make it over the next 12 months.
00:09:05:02 - 00:09:28:09
Danielle Hayden
So a lot of times I will allow for myself or for our clients what we call allowances, and this allowance will give you permission. It'll give you dollars to be able to spend on new initiatives that unfold throughout the year. So you meet an amazing consultant at a conference and you are dying to bring them on into your business.
00:09:28:11 - 00:09:53:19
Danielle Hayden
Well guess what? When you built out your budget, you created an allowance for spending, and it gives you permission to pivot and to bring on that new consultant in your business. So we can plan for impulse buying and office expenses and courses, professional development. You know yourself, right? So you normally have some impulse spending around new courses, on learning and skills.
00:09:53:21 - 00:10:21:11
Danielle Hayden
Then give yourself some dollars in your budget to go rogue throughout the year. Stop awaiting for last minute, you guys. We tend to make impulse decisions when we wait for the last minute. I see this specifically with taxes, but I know that there's so many different areas in our business that this could be applied to. Our renewal’s coming up in 30 days, and now we have to make that decision within 30 days.
00:10:21:12 - 00:10:49:13
Danielle Hayden
I don’t have time to do research and onboarding to a new software in 30 days? And so now I'm stuck renewing for another year, or with our taxes. Now I got my tax return done and I got comfortable and I forgot to go shop for new tax accounts. And now it's tax season again. And I'm spending another year frustrated with a subpar transactional service.
00:10:49:15 - 00:11:21:22
Danielle Hayden
When we give ourselves time and space for these types of decisions, we can cut back on that impulse spending. This, again, is where a budget comes in really handy, right? When you do your budget, you know when you have those large expenses or annual cost and you can pinpoint the month where renewals are coming. You can set yourself a reminder for 60 or 90 days ahead of that to shop that software or that tool so that you are ready.
00:11:22:00 - 00:12:00:10
Danielle Hayden
Now remember, your money team wants to hear about your goals. So one amazing way to cut your impulse spending is to share your goals with your money team. We are like your personal trainer and diet coach. We have it. We have all of your information and we are more than happy to help you stay aligned. So share your goals with your money team so that as we are working with you throughout the year, we can help you see how your actual spending compared to where you thought you would be according to your goals.
00:12:00:12 - 00:12:28:19
Danielle Hayden
Now, the last way to cut impulse spending is to evaluate your financial statements and your Snapshot every single month. You guys, we have to know where we've been to know where we're going. Even if you don't understand financials, even if you don't 100% know what you're looking at, I promise you, over time, this information is going to make sense as you continue to lean into the content.
00:12:28:21 - 00:12:53:12
Danielle Hayden
I've heard from so many clients who say, you know, when I first became a client, I really didn't know what any of this financial stuff meant. I really didn't understand the Snapshot, and it wasn't until I kept on showing up, looking at the information, talking to the team. That's when it all slowly started to click over time. Not a light bulb moment, but slowly over time.
00:12:53:14 - 00:13:18:05
Danielle Hayden
Now evaluate your Snapshot every month so that you know where you were. If you just overspent last month, if you had a loss in your business or you didn't hit your goals, that will help your brain when you go to make a new expense, when you go to make a new purchase, you have in the back of your brain, in the back of your thought, oh hold on, I didn't have a profit last month.
00:13:18:06 - 00:13:51:16
Danielle Hayden
I didn't hit my goals. Is this expense, is this spending going to help me course correct and realign to my goals? This month, when we evaluate our Snapshot, we know where our financials are. We can start making better business decisions every single month, and it helps us cut back on impulse spending. All right, if you guys don't have access to financial statements or your Snapshot each month, I want you to go to KickstartAccountingInc.com, book a call.
00:13:51:17 - 00:14:14:03
Danielle Hayden
We want to be there to support you. If you are a current Kickstart Accounting, Inc. client, shout out, I want you to go book a call with the money team, read your Snapshot and contact us with any feedback that you have. We are here to support you and your business. I hope you enjoyed today's episode of Business by the Books.
00:14:14:04 - 00:14:52:21
Danielle Hayden
Don't forget to hit like and subscribe! This is the number one way we can help other entrepreneurs find this podcast, because here at Kickstart Accounting Inc., it is our mission to help entrepreneurs understand their numbers, get access to this information, and grow and thrive in their business. So please help me, help other entrepreneurs understand their numbers so they can finally grow and thrive.