BMO Harris' Financial Tip of the Week: How to Stand Up to Peer-Pressure Spending

CHICAGO, Sept. 20, 2012 /PRNewswire/ -- As part of BMO Harris Bank's ongoing commitment to financial literacy and Helping Make Money Make Sense, BMO Harris is providing weekly financial tips. This week's tip offers Helpful Steps to control your spending. 

It's a scenario that's familiar to most people: You're out shopping with a friend and you see something you like that's way out of your price range. But your friend insists it's a great buy so you take out your credit card and make the purchase.

Peer-pressure spending happens more commonly than we care to admit. Sometimes it happens because the next-door neighbor just bought a flat screen TV and your kids are wondering why you're still watching sit-coms on your old boxy set. At other times, it happens because you want to impress someone – like that friend you were out shopping with.

Whatever the reason, peer-pressure spending can put a huge strain on your budget – and leave you with purchases you may not have really wanted in the first place.

Here's what you can do to rein in these spending impulses:

Budget for discretionary spending
It's easier to say "stop" when you know what your household budget allows for discretionary spending. So if you haven't included non-fixed expenses in your budget, then go ahead and do it. Don't have a budget and don't know where and how to start? Read our article on how to build a budget. And be sure to take advantage of our budgeting tools, which include an email feature that alerts you when you're close to your budget's limit.

Save so you can spend
Open a savings account earmarked for discretionary items. Then resolve to limit your spending to whatever's in this account. This is also a great way to save for things you want but can't afford right now; if you've got your eye on a new stereo system, for example, just bump up your savings for the next few months. To get into the savings habit, open an account with an automatic savings feature.

Before you buy, do a want-versus-need check
It's alright to buy things you want but don't really need, as long as you set reasonable spending limits. Otherwise, you may end up with house full of gadgets, toys and clothes you'll hardly use, and a debt load far bigger than you can afford. Learn more about making smarter purchase decisions by reading this article on Need versus want: It's important to know the difference.

To learn more Helpful Steps visit, https://www4.harrisbank.com/helpful-steps/helpfulsteps/index.html

About BMO Harris Bank

Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 650 branches and approximately 1,350 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris BankSM is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.

SOURCE BMO Harris Bank