Tips for keeping impulse purchases at bay

It’s tough for a lot of people to keep spending under control, whether its from online shopping or passing by a storefront. But financial author Sharon Lechter offers some simple tips that can help.

Lechter, who has authored 28 books including her latest, “How Money Works for Women,” starts by suggesting what she call the two-minute rule: Before making a sizable purchase, “Walk away from the item for two minutes,” she said. “If you really want it, go back and get it.” But often, a short break will be enough to cancel the urge to spend. You might even delay for 24 or 72 hours.

Another tip is to follow what she calls the one-in/one-out rule, in which you resolve to sell or donate a belonging for any new one that you acquire. This too helps to control spending while keeping clutter at bay.

“I have to force that one on myself,” said Lechter, a retired certified public accountant who lives in Scottsdale. “A lot of us tend to be hoarders.”

And rather than pull out credit cards routinely, Lecter suggests shopping with gift cards, with fixed dollar limits. For people who strive to get the best deals, she suggests using a price-tracking browser extension such as CamelCamelCamel or Honey. You might discover that an item isn’t such a bargain and doesn’t need to be bought immediately.

8 signs you’re on the right financial path

Money Management International, which helps struggling households deal with high debts, poor credit, unaffordable housing and other pressures, has put together a list of eight signs that point to financial success.

Four are obvious and deal with basic budget issues. They consist of spending less than you earn, always paying bills on time, having a minimum cash reserve (at least $500, the group recommends) and generally planning ahead to meet larger expenses without hoping for a big tax refund or other windfall.

The other indicators are more vague, such as having a sufficient amount of savings/assets, a reasonable debt load and appropriate types of insurance, without defining those terms or amounts. Also, Money Management International suggests that consumers aim for a “prime” credit score of at least 740, on the standard scale that ranges from 300 up to 850.  

Enthusiasm for new loan type

Borrowers who have used Buy Now, Pay Later loans generally express satisfaction with them, according to a TransUnion survey of 1,200 consumers.

The loans are made at the point of sale to finance a one-time, unsecured purchase. Borrowers typically repay these loans in multiple, equal payments instead of a lump sum. More than 100 million consumers have used BNPL loans, and that could increase, according to TransUnion, which found that about half of nonusers are open to trying the loans if they had the potential to exert a positive impact on their credit scores.

Currently, information for most BNPLs isn’t submitted to credit reporting agencies. Yet including more of these loans would attract consumers struggling to rebuild their credit or have been left out of the system entirely, TransUnion said.

“Consumers deserve to have their BNPL credit included in their credit history, which could lead to more access to credit for a generation of consumers who have embraced BNPL as an alternative to traditional borrowing,” said Jason Laky, executive vice president and head of financial services at TransUnion.

Would $186,000 make you feel secure?

Americans indicate they would need to earn $186,000 annually to feel financially secure, based on an average of responses in a new survey by Bankrate.com. That’s slightly more than double what Americans earn on average, so there’s room for improvement.

Only one in four respondents said they are completely financially secure, down from 28% in 2023, according to the Bankrate poll. About three in 10 Americans predict they never will be secure. As for feeling rich, Americans in general figure they would need to earn about $520,000 a year to reach that level of comfort.

Rising prices have led to an “affordability crisis” that has eroded Americans’ sense of security, said Mark Hamrick, Bankrate’s senior economic analyst, in a statement. But cooling inflation and ample employment opportunities could help close the affordability gap, he added.

Medical debts show improvements

Medical debts remain a burden on millions of Americans, though not quite as much as they were previously.

In large part, a new Urban Institute study credits changes implemented by major credit bureaus to ease, though not eliminate, the problem. According to the institute, credit bureaus removed paid medical collections from credit reports and stopped reporting unpaid collections until they were at least one year old, compared to the prior grace period of six months. Also, medical debts in collection no longer are used to calculate Vantage credit scores, and medical collections below $500 no longer appear on credit reports.

“Medical debt has constituted most of the debt in collections on consumer credit reports for the past decade, lowering consumers’ credit scores and thus limiting their access to credit,” said the report’s authors. “The reporting changes have erased medical debt in collections from most consumers’ credit reports but do not affect the underlying debt consumers owe to health-care providers.”

In 2013, 19.5% of Americans had medical debt in collections. By 2023, that had fallen to 5%. Other favorable factors include fewer uninsured households and higher average incomes.

Reach the writer at russ.wiles@arizonarepublic.com.