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Are you wondering how to stop impulse buying?
Shopping provides comfort and joy to many consumers. It's not a secret that Americans have a shopping addiction. In fact, 84 percent of all shoppers have engaged in impulsive purchases at one point.
However, with most shopping addicts having an annual income of less than $50,000 a year, many are in search of ways to save money.
If you’re looking for ways to curve your shopping impulses, you’ve come to the right place! This article will highlight steps to take so you can stop overspending on impulse buys and say yes to saving money.
What is Impulse Buying?
Impulse buying is a phenomenon where consumers make immediate and unplanned purchases, often driven by emotions or external stimuli. It is an impulsive behavior, a type of shopping where people buy things they hadn't planned on purchasing.
Impulse shopping can manifest in various ways: from grabbing a candy bar at the checkout line, to a spontaneous purchase of shoes online after seeing a promotion. While making impulse purchases can sometimes lead to feelings of satisfaction or act as a form of retail therapy, it can also lead to financial stress and a drain on one's personal finances.
Factors such as product placement, tempting deals on online shopping sites, and emotional states like feeling sad, bored, or stressed can increase the chances of impulse spending. For example, after a bad day, someone might engage in online shopping as a way to feel better, making unplanned purchases of things like books, furniture, or clothing. However, this type of spending can quickly lead to credit card debt if not kept in check.
Research shows that impulse spending habits can seriously harm one's financial health, leading to problems like not being able to pay bills, not reaching long-term financial goals, or even more serious credit issues. The allure of impulse buys on online shopping sites, combined with saved credit card information for easier and quicker purchases, only amplifies the problem.
It's not just the big purchases that add up, but also smaller impulse buys like a new pair of shoes or a coffee that wasn't in the day's budget. These unplanned purchases can result from a variety of emotions: from boredom to sadness, from a feeling of missing out to a boost in self-esteem.
To stop impulse buying and improve your financial life:
- Set clear financial goals: Knowing what you are saving for can make it easier to resist the temptation of impulse purchases.
- Create a budget: This will give you a closer look at where your money is going and can deter impulsive spending habits.
- Avoid temptation: Unsubscribe from email lists of online shops, limit browsing on online shopping apps, and avoid going to the mall or other places where you might be tempted.
- Wait before buying: If you see something you want to buy, give it a day or two. This pause can help you reconsider whether you really need the item.
- Talk it out: Share your purchase intentions with family members or friends. They can offer perspective and possibly deter you from overspending.
For those deeply invested in impulse shopping, especially where it affects their financial health, it might be beneficial to seek professional help, like a financial counselor. They can provide resources and strategies to manage spending habits and achieve financial goals.
Remember, while it's human nature to occasionally make an impulse purchase, it's also essential to be aware of our spending habits, the impact on our personal finance, and the strategies we can employ to avoid temptation and achieve our financial goals.
Why Should You Stop Impulse Buying?
Why should you stop impulse buying? The answer, deeply rooted in personal finance and behavior, has wide-ranging consequences.
Impulse buying refers to the spontaneous decision to buy something without careful thought or planning. It's that moment when, on a shopping trip, an item grabs your attention, and without much reflection, you decide you “need” it. These unplanned purchases can disrupt a carefully set budget and, over time, create financial strain.
Research shows that impulse spending can quickly drain one's savings account and increase credit card debt. Often, the motivation behind such purchases is emotional: a bit of retail therapy, the fear of missing out on a deal, or simply the excitement of a new purchase. But the temporary high or satisfaction from such a buy is fleeting, and the reality of the financial consequences soon sets in.
Here are compelling reasons to stop impulse buying:
- Protect Your Personal Finance: Impulse purchases can derail financial goals, leading to more money spent and less saved. When you buy on impulse, you're often dipping into funds allocated for other essentials or long-term savings.
- Avoid Debt: Relying on credit cards for impulse buys can rapidly escalate your debt. The interest on these purchases can significantly increase the actual cost of the item in the long run.
- Genuine Needs vs. Whims: By stopping impulse purchases, you can focus your spending on items and experiences that truly benefit and support your life, reflecting real needs over fleeting wants.
- Avoiding Buyer's Regret: How many times have you bought something on impulse only to regret it later? By giving any potential purchase a waiting period, say 24 hours, you allow yourself time to decide if you really need it.
- Discretionary Spending: By having a clear sense of your discretionary spending limits, you can make more conscious and intentional decisions about what you buy.
- Better Relationships: Money disputes, often stemming from impulsive buying habits, can strain relationships with spouses or partners. Discussing significant purchases and setting spending limits together can help maintain harmony.
- Clarity and Control: Impulse buying can make you feel out of control, especially when looking at an unexpected credit card bill or noticing the decline in your bank account. By resisting the urge to make impulse buys, you reclaim control over your finances and, by extension, your life.
Even though everyone is different, there are simple ways to stop impulsive spending in five easy steps.
How to Stop Impulse Buying: 5 Step Plan
Okay, so how the heck do you stop yourself from buying on impulse? This is where I really want to help you, so get comfortable. I’ve come up with five steps to help you dodge the temptation to overspend.
Step 1: Make a budget and stick to it
However, before you can move forward with saving, you need to take a hard look at your current financial status. Look at debit and credit card statements, along with cash receipts to fully understand where your money is going.
Start by breaking your purchases into two main categories: essential and non-essential. Your essential spending will include subcategories you can’t live without — rent, gas, food, etc.
Non-essential spending categories include gym memberships, magazine subscriptions, clothes purchases, streaming services, grooming, music downloads, etc.
Essential Spending
- Housing:
- Car:
- Food:
- Insurances:
- Utilities:
- Phone:
- Essential 1:
- Essential 2:
Non-essential Spending
- Streaming Services:
- Take-out:
- Bars/Nightclubs:
- Clothing Purchases:
- Gaming Purchases:
- Non-essential 1:
- Non-essential 2:
- Total Non-essential Spending:
Total up the amounts in each category.
Your largest non-essential line items are the ones you should tackle first and try to decrease future spending.
Step 2: Give yourself permission to spend
Next, look at all your income. Be sure to include any anticipated student loan refund checks, allowances, rental income, side hustles, gig work and child support payments.
You want to have a full picture of how much money you’re bringing in. You can use tools like Empower (review) to help you with this.
After you total your income, compare this number to your total expense budget.
Are you spending more than you make? For most, the answer is yes. To determine how much money you truly have to spend on your impulsive shopping, take your total income and decrease it by your essential spending total.
This number is called your discretionary income.
Total Income – Essential Expenses = Discretionary Income
In order to start saving, your non-essential spending must be less than your discretionary income. The following tips will highlight how you can accomplish this goal.
Take control of your finances with Empower's free personal finance tools. Get access to wealth management services and free financial management tools.
Step 3: Stop carrying debit and credit cards.
Debit and credit cards provide convenience for the everyday shopper. According to the US Bank Cash Behavior Survey, 50 percent of respondents reported carrying cash less than half of the time. However, ditching your plastic can have huge returns when you’re trying to save money.
Use the envelope method to keep track of your non-essential spending. Think about each of the categories listed under non-essential spending. Create an envelope for each.
In order to save money, determine how much you can afford to spend in each category. At the beginning of each month, put your budgeted amount in the corresponding envelope.
This is the money you will use to make your everyday purchases. When you run out of funds in the envelope, you can’t buy anymore! This is a simple method that requires discipline in order to work. At the end of the month, any money left over goes into savings.
Pro tip: Apps like Qube Money also implement the envelope method but offer a new way to budget via its app — it's worth checking out.
Qube Money offers affordable rates (including a free basic plan for individual users) and a host of useful features, which makes downloading this app a no-brainer. Budgeting doesn’t have to be complicated or unpleasant with this new budgeting app.
Step 4: Unsubscribe from retail email and mobile subscription lists
Retailers have a way of playing on shoppers’ impulsive behaviors. How many times were you sitting at work and received an email notification that your favorite store was having a 24-hour sale? What about a Happy Hour 50% off sale? Oh, and can’t forget about free shipping if you spend more than $50!
All of these promotions are ways for retailers to entice shoppers into thinking they’re receiving a deal in exchange for their purchase.
If you’re an impulsive shopper, the best way to not give in to the pressure is to remove yourself from all email and mobile subscription lists.
Out of sight, out of mind. If you aren’t being bombarded will sales messaging, then you are less likely to spend your discretionary income on these items.
Step 5: Use the 24-hour rule.
Our final tip is one that requires commitment. Most impulsive shopping is coupled with a fleeting thought that most give in and fulfill. Before making any non-essential purchase, wait 24 hours.
If you still feel strongly about making the purchase, then go back to the store to buy it. You will be surprised how many items you never think about certain items again.
The 24-hour rule combats our impulsive nature and forces us to think before taking action. It can be applied in a variety of ways to help with wise decision-making. As you see your non-essential spending decrease, you should also see an increase in savings.
Other Tips to Help Stop Impulsive Shopping
Becoming frugal stems from simple lifestyle changes such as not cutting the gym membership and exercising at home or bigger commitments such as cutting down to one car for a single household.
I'll share some changes you can make in your spending life in order to save more and spend less.
Track your spending
While it may sound tedious, start by monitoring your spending. This will help you see where your money is going and to pinpoint any “money pits,” areas in your budget where you’re spending too much and finding ways to save. These days, there are plenty of great budgeting apps such as Empower or Mint at your disposal to make it easy. While tracking your spending gives you information on your spending woes and saving wins, it’s putting the work into changing your habits so you become a successful saver that makes the ultimate difference.
Take inventory of what you have
While taking inventory of your possessions, use it as an opportunity to do some decluttering. It’s a great way to see firsthand how much stuff you end up not using and can stop you from buying stuff you don’t need. To start your purge, you can apply Marie Kondo’s ever-popular KonMari Method. Make sure you get rid of stuff shortly after you’ve decided to toss or donate it. Otherwise, you may find yourself having second thoughts.
Go on a digital cleanse
The Internet can be a huge gateway to impulse shopping. Sometimes all it takes is an email notification to pop up about a flash sale to trigger an impulse buy. To curb buying things you don’t need, Flanders suggests unsubscribing from your favorite stores’ email newsletters and unfollowing them on social media. Be sure to also unsubscribe from lifestyle blogs, as they can also create unnecessary material wants. “Don’t feel bad about it—even if you know the store owner,” says Flanders. “You need to remove all temptations.”
Keep a list of your spending regrets
We’ve all experienced buyer’s remorse at one time or another. We would suggest creating a list of recent purchases you regret. Keeping this list in your wallet or on your phone to serve as a reminder will help you from continuing the same habits.
It’ll also help give some insight to when you made emotional purchases and impulse buys. Were there certain times during the past year where you were going through a difficult time in your life, such as stress on the job or a bad breakup, and splurged to boost your mood? Or maybe you tend to fall prey to super sales? By pinpointing circumstances that caused you to make these purchases, you may think twice the next time.
Go on a fiscal fast
To help you change your bad money habits, you can go on a “fiscal fast,” which is when you stop spending money for a week. This forces you to make do with items you already have in your home. You can turn it into a group event, where you do it with your family, friends, or co-workers.
Once you’ve completed your fiscal fast, you may find out that there’s a lot you can do without. It can also help you realize that a lot of the times we may spend out of habit and not from necessity. You can do this once or twice a year for a week or commit to a longer amount of time.
Stay accountable
During your financial cleanse, you may find it difficult at times to stay on track. If you’re determined to stick to your financial cleanse, stay accountable by partnering with a friend or make an agreement with someone. Besides support, your friend can also offer you financial tips. If you fall off the bandwagon and relapsing into a bad habit, don’t be too hard on yourself. It happens to the best of us. Just recommit to your goals create checkpoints to help you along.
Going on a financial cleanse will help you develop a better relationship with your money and develop saving habits. By going through a cleanse, it will put you back the driver’s seat so you can take control of your finances.
Remember This Before You Impulse Buy
Although these tips will provide you with guidance as you try to save money, it all starts with your willingness to make changes to your financial habits. It is okay to make a few impulsive buys as you start your journey toward saving.
As you make steps forward (and sometimes backward), find a friend you can talk with, who will help keep you on track toward reaching your savings goals.
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