We are all victims of impulse buying at one point or another. When left unchecked, impulse buying can wreak havoc on personal finances. So how can we stop impulse buying?
Think about it, you go to the store with the very specific purpose of buying one pair of shoes for an upcoming holiday party. But then, you wander into the purse department.
As luck would have it, you end up finding a purse that matches your new shoes perfectly! Of course, you grab it.
Since you are getting new shoes and a purse to match, you wonder over to the jewelry section to see if there are any good deals. Wow! You just found an amazing necklace that would look awesome with the shoes and purse. It’s not on sale, but goes so well, you absolutely HAVE to have it!
Just for fun, you end up browsing the clothing section and what do you know, you find an absolutely amazing dress.
Before you know it, you end up coming out with way more stuff than you originally anticipated.
The worst impulse buying occurs online. You see something trendy on Instagram or YouTube and absolutely must have it!
With nearly every retailer having some sort of online presence, you don’t even have time to think about your purchase.
In fact, Amazon makes online shopping so easy, you don’t even need to know your credit card number. Everything is conveniently saved and ready to go as soon as you are. How nice!
It is almost as if companies WANT you to impulse buy.
What is Impulse Buying?
Impulse buying is an unplanned purchase. It is the reason why your miscellaneous expenses are so darn high!
Impulse buying is a psychological phenomenon that target’s the need to satisfy immediate wants and instant gratification. (Ever heard the term buyer’s remorse).
A research study performed by Mattila and Wirtz in 2008 discovered that the more stimulation a consumer has, the more likely they are to impulse buy.
Companies rely on impulse buying to stay in business (reference statement above… “it is almost as if companies WANT you to impulse buy”).
It kind of feels like you, as the consumer, are being taken advantage of. Below are some tips and tricks for how you can stop impulse buying.
How to Stop Impulse Buying
Every action we take has an opportunity cost. An opportunity cost is what you give up in exchange for what you receive.
For instance, when you want a new pair of shoes you exchange money for the shoes.
Seems simple enough, right?
Not so much. Let’s dive a little deeper.
Say you buy those shoes for $100. How long does it take you to earn $100? What happens, if, instead of buying the shoes, you invest the money?
That $100, when invested over the course of 30 years is worth $1,983.74. How long does take you to earn $1,983.74?
This is a small example, but an important one. The opportunity cost of making a purchase isn’t the money spent on an impulsive purchase. Rather, the opportunity cost is the amount of time it takes to earn that $1,983.74.
Every dollar spent means you are required to work longer.
Love your job? That is amazing! But, will you still love your job in 30 years? Will you still have the same boss and coworkers? Will you get bored? 30 years is a long time. You don’t know how you will feel.
Before you make that purchase, understand the real cost of the purchase you are about to make. Chances are that thing you were just about to buy is not worth the time it takes to buy it.
Wait 24 Hours
Before you make any purchase that could conceivably be considered impulsive, stop and wait 24 hours. Take a step back from that over stimulated environment, go home, have dinner, watch some tv, sleep on it. The next day, how do you feel?
Many times, just taking a step back can provide you with some clarity and help prevent buyers remorse.
Create a Budget
By making a budget, you are deciding where your money goes. Budgeting is an incredibly powerful tool that holds you accountable for your decisions.
It may not be the most exciting or fun thing to do, but budgeting is very close to the most powerful thing you can do to create and maintain a strong financial position.
Having a budget will help prioritize what is most important to you. If you spend money on new shoes, will you be able to take that vacation?
If you need help creating a budget, check out my step-by-step guide for how to create a budget. It is perfect for beginners with examples and pictures showing you exactly what to do.
What is Your Why
Before making any purchase, remember your why.
Why did you decide that you want to take control of your finances? What is the motivation?
Do you want to have more time to spend with your family, travel around the world, retire early, buy a house?
Having a solid why and remembering it is a great way to stop impulse buying.
How many email lists have you signed up for? I don’t know about you, but it seems like I get at least a hundred emails a day from people trying to sell me something.
I see these emails with eye-catching graphics letting me know of flash sales and clearances. BUY NOW!
These emails are designed to create a sense of urgency. Do not fall victim. There is always some sort of a sale and clearance.
Start unsubscribing to all these nonsense emails cluttering your inbox. They are bombarding your psyche with stimulation and chaos on purpose.
Marie Kondo says it best,
“A dramatic reorganization of the home causes correspondingly dramatic changes in lifestyle and perspective. It is life transforming.”
Who you spend time with plays a huge part in how you live your life. Spend time with those that share your values and aspirations.
It is SO easy to fall into the same lifestyle of those around you.
Spending time with the right people will catapult you to extraordinary heights. They will be your support system and push you to achieve your goals.
- Use the above tactics to stop your impulse buying for good!
- Remember, you are not alone in your impulse buying habits. We have all been there at least once. Create a budget to help you organize where you want your money to go.
- If you need some support to reduce your impulse buying, hold you accountable for your decisions, and help you achieve your financial goals, a money coach might be a great investment in your future. You can find out more about money coaching here.
- If you have any questions let me know! I am happy to answer.
- Sign-up for the Green is Good Cents Newsletter for quick tips on how to get better with money.
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