Impulse spending. The budget killer. You think you are doing great, keeping your spending under control. Then, all of a sudden and seemingly out of nowhere, that shiny product catches your eye. You just can’t seem to live without it so you buy it on the spot. This amazing product you could never live without is used once, maybe twice, then sits in a drawer in your kitchen never to see the light of day again.
Does this scenario remind you of any of your purchases? I bet it does. I am sure I can go through my drawers and find a few things that never should have been bought. But that’s okay. It happens to all of us.
What is Impulse Spending?
Impulse spending, or impulse buying, is simply the unplanned act of making a purchase. Think about the grocery store. Specifically the checkout line. That is impulse buying central. The magazines. The candy. Everything in that section of the store screams impulse! They want those headlines on the magazines to catch your eye and get you interested enough to pick it up and buy it. Does anyone really need those magazines with the latest celebrity gossip? Of course not. But they keep coming out with new ones for a reason. They sell like hot cakes! Avoiding them will help your budget immensely.
We live in a culture of consumption. We want what we want and many just go ahead and buy those things. This can lead to some bad money habits, especially when financed with a credit card. Remember the power of compounding. Compounding can and will work against you thanks to the interest you owe on debt. Credit cards are some of the worst offenders.
Characteristics of Impulse Spending
Certain people are more prone to buying things impulsively than others. What traits do they have? What makes them more likely to spend? Luckily for us, Psychology Today has the information we are looking for. I encourage you to give that article a read if you are interested in the mindset behind impulse spending but I will try to summarize below.
First off, those who are compulsive impulse spenders are worried about how others think of them. They may want to impress others so they go about buying things they think will achieve their goal. Impulse buyers have a harder time controlling their emotions and, therefore, have a harder time stopping themselves from impulsively purchasing something. An impulse buyer may be less happy, and will try to improve their mood by buying something they want. And of course, an impulse spender won’t think about the consequences of buying an item, especially if its on credit. They just want to have it so they get it.
How to Avoid Impulse Spending
So impulse spending is destroying your finances. How can you stop it? For starters, creating a budget and sticking to it will help. The key is that last part. Sticking to it. Creating a budget won’t in and of itself solve any financial problems. Remember, a budget is a tool to help you figure out where your money goes. It is still up to you to keep to it. The goal here is if you haven’t budgeted for the purchase, you shouldn’t buy it.
You see that item online that you really really want and need to have! Put on the brakes. You haven’t had it yet so clearly you can live without it. Give it a day or two. Come back to it later. I bet you will have a change of heart. Just the simple act of waiting will limit your impulse purchases.
Do you know an easy way to control your spending and keep that credit card balance low? Paying in cash. That’s right. Cold, hard cash. The green stuff. I know, it seems so antiquated nowadays. But guess what! Paying in cash makes it feel real. Like you are spending money. Because that is exactly what you are doing. Just swiping a card doesn’t have the same effect. Just feels different. So next time you are going out and only expect to spend $100 on clothing or whatever it is you are buying, bring that $100 in cash. You can even leave the card at home! That way, you can’t spend any more and you will easily stick to your plan.
You Can Control Your Spending!
I know, it can be fun to just buy something random when you are out. We have all been there. I am just as guilty as you. But you know what is more fun? Financial Freedom. The ability to truly do what you want, when you want.
So do your best to curb your impulse spending habits. Take the ideas above and implement them into your own life. Keep in mind your ultimate financial goals. Pay off that debt and start living the life you dream! Impulse spending will only do one thing, add to the debt and the amount of time it takes you to pay it off. You deserve better than that.