Are you an impulse buyer?
Chances are that you are, or that you have indulged in impulse buying in the past.
In fact, a 2016 poll done by CreditCards.com found that 5 out of 6 Americans have made impulsive purchases, and 1 in 5 have made an impulse purchase of more than $1,000!
$1,000 is a lot to spend on something you weren’t even planning on buying, let alone budgeting for!
Alas, 20% of people have done it.
What is impulse buying and how do you combat it?
Read on to find out.
What is Impulse Buying?
Before we go any further, let’s be crystal clear about what we mean by impulse buying. Impulse buying is an unplanned decision to buy something made just before making the purchase.
In other words, you’re browsing a store or retailer online when you see something you were not specifically looking to buy, but you purchase it anyway. These purchases are tied to emotions (instant gratification) and may be triggered by some sort of promotion/sale.
You came, you saw it, you bought it.
Unfortunately, impulse buying is one of the main culprits of a blown budget. While you may have the funds to cover unexpected purchases, if you consistently impulse buy you let a significant chunk of money out the door that could be put to better use elsewhere.
Don’t believe us?
According to the survey, 36% of impulse purchases were $50 or less (20% for $25 or less). Not only that, a further 31% of purchases were between $50 and $500!
While the survey parameters indicated impulse purchases had been made sometime in the last 3 months, let’s assume you make an impulse purchase of $50 every month.
Over the course of one year, you will have spent $600 on things you weren’t even looking to buy. Furthermore, this survey doesn’t even consider impulse food and drink purchases, or entertainment, only items bought in a retail store or online!
By the time you factor in restaurants, movies, and other forms of entertainment you may be impulse buying more than $1,000 worth of things over the course of the year!
What’s worse? You likely don’t need most of these items and are wasting your money for momentary emotional satisfaction.
So, what do you do about it?
There are several things, actually, but only one is guaranteed to prevent those medium to large impulse purchases from blowing your budget.
But let’s start small, shall we.
Never Go into a Store (or Online) Just to Browse
In fact, the only “browsing” you should ever do is when you’ve already decided to buy something but just aren’t quite sure of the exact item. For example, you want to buy a book, a pair of shoes, or a jacket, but aren’t quite sure which one. In these cases, you’ve already predetermined your item purchase, it’s just that you haven’t figured out EXACTLY which specific one you want.
Notice that all these items belong to the “small and inexpensive” category?
Yeah, that’s because any larger purchases should always be well-researched and thought-out. Otherwise, you risk making an impulsive decision that’ll ruin your budget and you’ll regret later.
Simply put, DO NOT go into a store (or go online) just to “look around.”
When You Do Go into a Store (or Online), Make a List and Stick to It
We know, lists are boring and tedious.
But they work.
Making a list of needed items serves two purposes: it makes sure you don’t forget the things you DO NEED and reminds you that you DO NOT NEED anything else.
This seems like a simple concept, and it is.
Lists are a reminder of the necessities, and everything not on the list becomes a want. Needs are crucial and necessary, wants are superfluous and expensive.
Stick to the list and ignore the rest.
Sleep on It
Both of the above strategies are good, especially for smaller impulse buys, but they are not a sure-fire guarantee that you won’t fold under pressure and make a big-time purchase that you’re sure to regret later.
To avoid the impulse buying walk of shame, you need the number one strategy to avoid impulse purchases.
Sleep on it.
Sounds corny, but it works.
Remember, impulse buys are the result of irrational emotional desires, many of which are triggered by some sort of promotion or sale. This means that the only reason you’re buying something is because you saw it and decided on the spot you wanted it.
No other reason.
If you’re looking to buy something for no other reason than you saw it and thought “oh, I want that,” then that’s a signal to you to clamp down, get a grip, and walk away.
When you see something, decide you want it, and then give into that impulse, you’re allowing the childlike, emotional, and impulsive part of your brain (the amygdala and other associated structures) to take control. Do you really want your financial decisions to come down to a childlike emotional reaction?
Like an impulsive child, you need something to take over and become your frontal lobe (the area responsible for logical thought) until it reasserts itself in your world.
You need a pause button.
Essentially, you need time. That initial burst of emotional wanting will wear off, but you need some time and space to ensure that process can happen BEFORE you make a purchase your frontal lobe will ultimately tell you was a bad idea.
That’s why you walk away, sleep on it, and give yourself time to evaluate whether you REALLY need that item. If it’s truly too good of a deal to pass up, it’ll be there in the morning.
What about online impulse buys?
Get off the internet, shut down the computer, walk away, and sleep on it. It’ll be there tomorrow and beyond, but the child inside you screaming “I WANT IT” won’t be.
Moral of the Story
The impulse buy walk of shame may be even more common than the real one! (just kidding, but seriously).
However, you don’t need to let the child inside you ruin your finances.
First, never go into a store just to browse, and definitely do not schedule shopping dates with your friends!
Second, make a list, check it twice, gonna find out who’s been impulsive or wise. Frontal lobe is gaining some ground!
Yeah, that just happened.
Finally, and most importantly, make sure you walk away from any big potential impulse purchase and sleep on it. This purposeful pause button allows the emotions to wear off, your logical center to kick in, and for you to save hundreds throughout the course of a year.
Talk about Money Saved.