How to Stop Temptation When You're Most Likely to Waste Money

A few psychological tricks that will help you best your brain and form new, more helpful money habits.

We all know the feeling after booking a flight to the beach or downing second glass of post-raise celebratory champagne—we’re ready to spend.

Opportunities like this are around every corner. But tempting situations, whether a friend brandishing a weekend getaway or a store window showcasing the tablet of your dreams, don’t have to be a bad thing for your money. Instead, we can choose to see them as opportunities to make good spending decisions instead.

How? A few psychological tricks that will help you best your brain and form new, more helpful habits.

For advice on recrafting tempting situations into opportunities to exercise self-control, we spoke to Julia Galef, president and cofounder of the Center for Applied Rationality, and Syble Solomon, executive coach and creator of Money Habitudes, a game-like set of cards which helps start conversations about money.

They shared their best tricks to help us choose not to spend, even in some of the most tempting circumstances. Use their insight to help when you are …

1. At the Tail End of a Terrible Day

Maybe your boss yelled at you, your deal fell through, or your basement flooded—no matter what happened, you could use some serious cheering up. All too often, we look to buy that cheer … which is decidedly less comforting when we see our checking account the next morning.

How to Combat Temptation: Solomon has an acronym for situations—all too common at the end of the day—that make us extra vulnerable: HALT, which stands for hungry, angry, lonely and tired. “If you’re feeling any of those, recognize that you’re prone to poor decision-making,” she says.

The trick is heading off temptation at the pass. “Before you head out the door, ask yourself how you’re feeling and consciously rate your vulnerability on a scale of 1 to 10,” Solomon suggests. “When you know you’re vulnerable, you can use that opportunity to take more control.”

Galef adds that stress can subject us to what psychologists call “cognitive distortions,” or exaggerated and irrational thoughts. (For example, if one bad thing happens to you, you might extrapolate and assume that the pattern is destined to repeat itself—turning a lousy afternoon into a downward spiral.)

“One of the most useful things you can do for your decision-making is to be able to recognize the emotional cues that you’re in a state of elevated stress—and to know how to destress,” she says. And, once you take a few minutes to calm yourself, you’ll be more likely to convince yourself to tuck that cash (or card) back in your wallet.

2. On Your Third Drink Out With Friends

Does “next round is on me!” sound familiar? Chances are, you’ve made that announcement a few hours into a big night out. Notice how your generosity increases along with your blood alcohol level? That’s because alcohol decreases our impulse control … and control is paramount when it comes to making the responsible choice, financial or otherwise.

How to Combat Temptation: Four drinks deep isn’t the time to suddenly start worrying about your budget. That worrying should be done earlier, before you imbibe. In this situation, a key part of deciding not to spend is minimizing your other options, so you can’t make the wrong decision even if you try. Solomon recommends setting yourself up for success well before hitting the bar: “Only take enough cash for what you planned to spend and leave the credit card at home,” she suggests, or have your designated driver hold onto your credit card for the night.

3. Celebrating a Raise or Bonus

Good news merits celebration! Certainly, you’ve earned a treat—but there’s a big difference between a bouquet of flowers and squandering your entire windfall. Overdoing it risks souring your celebration with next-day regrets.

How to Combat Temptation: Making the right decision when you’re high on life is all about reframing your mindset. “Our decisions often have more to do with our identity (‘I’m the kind of person who…’) than our goals,” Galef explains. “But you can use this to your advantage.

In other words, you’re the kind of person who is skilled enough to get a raise or promotion? Great—then you must also be the kind of person who is savvy enough not to spend it all right away!” Of course, you needn’t sock away every single penny: When you get a windfall like a bonus, a good rule of thumb is to mix work and play by putting 90% toward your financial priorities … and 10% toward something fun.

4. When Getting a Tax Refund

A tax refund may feel like free money, but it isn’t. The federal government is reimbursing you for money you overpaid throughout the year. Because your money could have been growing in a savings or investment account, you actually lost out on potential earnings.

How to Combat Temptation: Galef notes a cognitive bias called “loss aversion.” “That means that keeping $1,500 feels more important than gaining $1,500,” she explains. “So if you want to avoid spending all of your new bonus, try mentally reframing it as part of your savings—if you think of the money as something you already own, you’ll be more motivated to hang on to it.” Translation: This cash didn’t just fall out of the sky—it was already yours to begin with. Now do you want part with it?

5. Opening a “Big Sale!” Email

We’ve all joined the odd email list (or ten), and we understand the temptation of a 50%-off message landing in our inbox—especially when there’s a time limit attached to the discount (“24-hour sale! For your eyes only!”). But online shopping is a slippery slope, and it’s hard to stop spending once you’ve started.

How to Combat Temptation: First of all, recognize that it’s never a great deal if you end up buying something you don’t need. Then, “Try and figure out what sorts of psychological tactics marketers are using,” Galef says. “For example, that 24-hour email is using the principle of scarcity, in which a purchase becomes so much more tempting if it’s available for a limited time only. When you read an advertisement, you can treat it like a game: Spot the tactics! How are they appealing to you? That keeps you on your guard and makes you less likely to fall for it.”

And if you caved and clicked, Solomon suggests developing a habit every time you get ready to pay for something: “Before you check out, automatically go through your cart and ask yourself one of these questions: What are three other things I could do with this money? How many hours would I need to work to pay for this? Would I miss it in a month if I didn’t buy this now?” By the time you get through your questions, you’ll be better set up to resist the purchase.

6. Moving Into a New Home

We’ve talked before about new home syndrome: the spending spiral that starts when you feel that your new home needs a new bathroom … and floor treatments … and furniture … and artwork. Before you know it, you’ve added thousands of dollars to your purchase price.

How to Combat Temptation: “When we make a big purchase—like a new home—it can throw off our sense of scale on smaller purchases,” Galef explains. “This is one reason why hotels can charge $5 for a little bag of chips—because that seems like basically nothing compared to the price of a hotel room. To keep yourself from overspending on furniture after a move, choose different benchmarks than the price of the new house.”

Instead, she suggests, weigh each cost against the other things you could buy for the same price. “For example, would you rather have a $5,000 sofa, or a $2,000 sofa and a $3,000 vacation?” Galef asks. You’ll be surprised how much more expensive your purchases seem when you aren’t comparing them to the price of a three-bedroom apartment.

Read more from LearnVest:
-- Confessions of an Average Joe: 'I've Saved $60K for Retirement on a $40K Salary'
-- 8 Things That Will Be Cheaper in 2014 
-- The Other Big Gender Gap?

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