5 Effective Ways to Avoid Impulse Purchases and Save Money
Any sudden, unplanned decision to purchase a product or service is considered to be impulse buying. These spur-of-the-moment purchases can be big or small, but they are never planned. If you’re standing in line at the supermarket checkout and suddenly decide to purchase a candy bar, that’s an impulse purchase. But the same can be true of a new sweater, a pair of shoes, or even a new car – if it wasn’t something you needed and you didn’t intend to make the purchase.
If you want to stop impulse buying once and for all, these tips are designed to curb your impulsive spending tendencies:
Make. A. Budget.
Most people don’t even realise how much they’re spending… until they check their statement and mistakenly think their bank account details have been compromised, when in actuality, it was YOU who spent all of the money – not a Nigerian scammer.
Creating a budget and knowing what you spend should be your first priority. After all, if you have no idea where all your money is going, how will you know where you need to cut back?
You want to start by making a list of all your monthly expenses: think rent, bills, groceries, and any subscriptions or debt payments you may have. Once you know how much money has to come out of your pay each month (money for wine doesn’t count), you can see how much you have left.
You then want to divide the amount you have leftover into two: one portion will go straight into your savings account and the other amount is your spending money – AKA the amount you can impulse shop with guilt-free.
Make Yourself Wait
Creating a waiting period before you purchase something that isn’t on your list and isn’t an immediate need will help you avoid an impulse buy. Your waiting period can be any length of time that works for you. It could be one month until your budget resets, or it even could be as little as a day. In many cases, putting an item down, backing away, and saying you’ll return to it in a certain amount of time can be all you need to overcome the urge to buy it.
Sell Your Stuff
This might feel counter-intuitive, but trust us, it works!
Take a weekend to sort through all of your clutter. Under the bed, in the closet, clear the attic and the garage. You’ll be surprised at how much stuff you already have! Sort your items into Keep, Donate, and Sell piles.
Doing this works on impulsive spending on a few levels. Firstly, it helps you rediscover things you’ve already got – you might find an article of clothing you’d forgotten all about, instead of the one you’ve been eyeing up in the sales. Secondly, you’ll feel better for clearing your clutter – an emotional burden we often don’t realize we have. Thirdly, you might feel shocked when you realize just how much ‘stuff’ your impulsive spending habit has gathered over time. (Try adding up what you’ve spent on these items over time, too – that’ll certainly jolt you into wanting to save!).
Leave your credit card at home
There are two benefits of buying with cash. It’s easy to set a budget — if you leave the house with $100, you can only spend $100. There’s no way around it. You may even end up spending less. Instead of charging something on your credit card, you’re actually watching the money leaving your wallet, which can deter you from overspending.
Give yourself incentives
Just like any other bad habit, you’ll only be successful if you want to change. If you give yourself some meaningful incentives, you will be more likely to stay strong in the face of financial temptation. If getting the credit card bill(s) every month cause a great deal of stress, then make a plan to cut the balances down by paying more each month and cutting back on spending. Savor the feeling of reduced stress every month when the bill comes as a reward for staying on track.
Another incentive is to come up with a penalty you charge yourself when you buy something that doesn’t meet criteria set for unnecessary purchases. Make the penalty equal to the cost of the item you buy, and earmark that money toward a savings account. Knowing that if you that spend money on an item that it will cost you double, you may get a better feeling about what the entertainment value of the expense is.
Curbing that Impulse
Most of us feel the impulse to buy something we hadn’t planned on at some point. Curbing that impulse can be difficult, especially if you feel as though the purchase is small and mostly affordable. According to the survey data, though, it might make sense to avoid shipping in the store, since that’s where eight out of 10 impulse buys happen. Only about 13% of impulse buys happen on a computer, and 6% happen on a tablet or smartphone.
Both impulsive and compulsive shopping can wreak havoc on your monthly budget, hurting your ability to save and invest. In both cases, it is creating extra spending that could otherwise have been avoided.
Since it can be difficult to address these habits, do not be hesitant to get help from a professional. By understanding and addressing your spending habits, you will be able to save more money by cutting out extra expenses.