A midwestern couple walks into a mall. They’re looking to get some exercise so they set their FitBits and 9,000 steps later they’ve dropped $500. If you’re waiting for a punchline, there isn’t one. They left the mall with three ramen bowls, two coats, a pair of Doc Martens, and a bag of Lindt truffles they didn’t need when they got there and still didn’t need when they left.
Sound familiar? Impulse spending are those instances in stores or online when we buy things we never intended to, and it’s no laughing matter. Research reveals that Americans spend an average of $183 per month on impulse buys. To put that into perspective, if you saved just half of that over a period of 10 years at an interest rate of 8%, you’d have over $15,000 set aside!
“But these are things I need!” you say. Whoa. Before you start defending yourself, impulse spends often include the things we absolutely don’t need, such as that pack of gum or bottle of soda you picked up in the check-out line, and they can be even bigger like the car you bought after saying you were just window shopping. The problem arises when we go over budget, and particularly when we start counting on credit to cover the costs.
In 2020 alone, thanks largely to the pandemic, impulse spending increased by 18% according to a Slickdeals survey. And maybe that speaks to one of the major causes of impulse spending, emotional remedy shopping. Whether it’s boredom or fear or just a need for a happy fix, we are spending more on more things we just don’t really need.
Psychology Today reports, “As people shop, they’re naturally visualizing how they’ll use products they’re considering, and in doing so, they’re also visualizing their new life,” which causes the brain to release a pleasurable bit of dopamine. However, the crash comes when we realize that happy little spend has resulted in a big ding in our budget. In fact, a Finder.com survey reported that nearly half of impulse buyers regret their purchase following the transaction.
If you count yourself among those who just can’t resist the next newest shiny thing, if you find yourself too often treating yourself to meals out or a new outfit or buying supplies for that next big home improvement, you’re not alone. Impulse spending can be driven by the need to self-remedy your emotional state, by feelings of inadequacy that make us “compete with the Joneses,” or even by the way we were taught to deal with money by our parents.
But going over budget and racking up credit card debt are surefire ways to find yourself in financial trouble. It is therefore important, if you’re an impulse spender, to develop strategies for coping with the problem. Here are some ways to prevent that next impulse purchase:
- Stick to your budget: Set aside money for your debts, your essential needs, and for those long term savings goals. Only then can you factor in what might be left for frivolous spending.
- That being said, set aside fun money: A no tolerance policy might just drive you to that defiance spend, so set aside some money that can be used for those things you don’t need. But be aware of how much of that money you have available and don’t go past your budget.
- Don’t let emotions rule: A good rule of thumb is not to shop when you’re feeling emotional. Fear, for example, has been one of the big triggers during the pandemic and has led to closets full of cleaning supplies and toilet paper we’re still working our way through.
- Avoid the fear of losing out trap: One survey reveals that “53.8% of women make an impulse purchase because they have a fear of missing out on a sale or good deal.” But before you men get smug, a CNBC survey revealed that men are more likely to make high cost impulse buys.
- Stay away from your triggers: If you know the places where you are likely to make impulse buys, stay away.
- Stick to your plan: when you do shop, make a list of the essentials and stick to that list. Going off list is a sure sign of an impulse buy.
- Avoid social media: Not only is social media rife with ads these days but it also leads to feelings of inadequacy as we compare our lives to the others we see posted there. And before you declare yourself immune to online ads, know that studies show that 55% of consumers have purchased an item through social media advertising.
- Take a shopping buddy: Having someone who will hold you accountable for your spending can have a significant impact on curbing your urges.
- Leave the credit card at home: Take only cash with you when you go out to avoid the temptation of using a little credit to get that unbelievable deal you must have. You can also carry your checkbook for added security. This will still give you more access to your funds in case of an emergency while still preventing you from impulse buying
- Don’t give your email address: Signing up to receive notices only fills your inbox with sales for things you don’t really need.