In a recent article Matt Jabs from Debt Free Adventure discussed an interesting concept, Spending Filters. A filter is a device that removes unwanted items as they pass through it; a spending filter is something similar. Before making a purchase you run it through some of these filters to ensure you are not making a purchase for the wrong reasons.



Matt lists 6 filters:

1. Do I need it?

2. Ask for a discount

3. Consider alternative products/services

4. Compare prices

5. Be productive instead of spending

6. Use spending ledgers

Some other filters mentioned by readers in the comments section are:

1. Control spending

2. Need vs. Want

3. Will I need it in the future?

Although I like Matt’s concept of spending filters, I think that most of us use spending filters knowingly or unknowingly. I believe Matt has left out one important factor: self-discipline. If you do not have self control and the ability to delay gratification then the above mentioned filters will not be of any use to you – because at the end of it if you want, you’ll buy it.

Spending filters will only work if you have a desire to save and the self discipline to delay immediate gratification. If someone really wants that brand new car then putting it through spending filters won’t stop them from getting it. I can come up with tones of reasons why I really need the new car:

1. Buying used car will cost more in long run due to repairs.

2. No warranty for used car.

3. No guarantee that the car is truly in the condition the seller claims it to be.

4. New car will last me longer.

The list can go on and on. Just recently I had a family member go through this exact scenario – tones of debt, just one income, recently had a child and he was able to convince himself to lease a brand new car, probably the worst financial decision he could make at this time. Not only did we (the wife and I) put the purchase through the spending filters for him, but we also did detailed math and showed him in numbers how bad of a deal he was getting. However, he was convinced that he needs the new car and that there are no alternatives.

If you do not have sufficient self control, this concept will not work very well. Spending filters are subjective; you see things as you WANT to see them even with the filters on. If you have spending problems than your focus should not be on applying these spending filters, but learning how to delay your gratification and practicing self control to avoid impulsive spending.

Consumers are not in debt up to their neck because they do not understand the spending filters and wants vs. needs, but because they do not have sufficient self control and are accustomed to having everything they want now. This need for immediate gratification leads them to impulse buying, which leads eventually leads to spiraling debt and the cycle goes on.

If you are reading personal finance blogs then you fall into two groups:

First group are those who are financially responsible and want to learn more about saving, investing and personal finance.

Second group are those who have made some financial mistakes and fallen in debt, but are now are trying to get things back to normal.

If you fall into the first group then I direct you to Matt’s article to learn more about the spending filters and how they can help you, if you are in the latter group than I direct you to our article on how to delay gratification.

What are your thoughts? Do you think spending filters will help with impulsive consumers? Is delaying gratification and spending filter a similar concept?