There are a number of reasons why you should stay away from impulsive purchases. And most of them usually lead to you reaching your financial goals.
One thing impulsive purchases does is put you off budget. When you buy something without putting much thought into it, you end up damaging your budget or your savings. It might seem like a small amount but it would have a big effect on your overall goals. Once you adjust, it ripples down to your plans for the future.
Making purchases without a plan simply because you want to can reinforce the behavior. This increases the frequency of having the same thing happen in the future over and over again. One culprit is retail therapy where you believe shopping and buying what you want can help you overcome extreme emotional episodes.
When this happens, it becomes a lot more challenging to stay away from impulsive purchases. The moment you feel down or anxious, you might start looking for items to buy. Without knowing it, you already have a lot on your online cart if you are shopping online. Or you have one too many clothes in your basket when you are in your favorite shop.
It is tough to try and snap out of an impulsive buying behavior. Especially so when you have been doing it for a number of years. But there are a few things you can look into to ease your way out of this type of negative financial behavior. The sooner you get to address the issue, the better it will be for you and your financial goals.
Clearly define your needs versus your wants
If you really want to stay away from impulsive purchases, a good first step is to have a clear outline of your needs and your wants. It seems pretty simple but is actually a tough exercise to go through. The reason is that a lot of people seem to blur the lines between their needs and wants. It comes to a point that they are interchanging one with the other.
Take food for example where needs and wants usually get mixed up. Food is a necessity for daily living. You need to eat every day, but it does not mean you will splurge every last dollar on food. The goal is to eat healthy meals without spending too much. This means less takeout and expensive restaurants and more cooking your own meals at home.
One way of looking at it is focusing on the things you really want in the future and putting off those that you want now. Much like keeping your eyes on your goals and not letting distractions get the better of you. It takes a lot of discipline to stick to your goals but you can work on it slowly. You will make mistakes and slip up from time to time. The goal is to get back up and learn from your mistakes moving forward.
Have a comprehensive household budget
An effective way to stay away from impulsive purchases is by using your household budget. If you do not have one then this is an excellent time to put a budget together. It is easily one of the most underrated financial tools you will ever have at your disposal. The effectiveness comes from its simplicity to provide you with numbers at any given time.
A good start is to jot down all your expenses and payments on a monthly basis. It is important that you include every single expense. Regardless of how small the payment is, put it in your budget. This will help you get a clear picture of how much you need every month to cover all your expenses. The next step is doing the same thing with your income.
List down all your sources of income from your day job to your side hustles and even investments. The goal is to have more income than your expenses. Your budget will let you know if you can or cannot afford an item you want to buy. And most likely, impulsive purchases do not fit in your budget. If you can follow your budget, it lowers the chances of impulsive buying behavior.
Look for an accountability partner
One tip to stay away from impulsive purchases is to get an accountability partner. They can keep you on your toes when it comes to spending out of your budget. If you are married, the best accountability partner would be your spouse. Since you also budget every month together, this can be quite easy to accomplish.
The idea is to get that person involved with your plans to do better when it comes to impulsive purchases. At the least, they can check up on you from time to time to help keep you on the right track. Share with them your struggles and your plan to get out of them. Let them know how important their help will be in keeping you on the right path5.
If there was ever a time to procrastinate, this is it. When you feel the temptation to buy something out of budget, give it time. Walk away if you are in the mall or close your computer if you are browsing through online shops. Use the time to think about the purchase and if it is really something you need at that moment.
This move can help you stay away from impulsive purchases because you are not giving in to the temptation at the beginning. Moving away from the purchase gives you time to cool down and redirect your focus back to what is important. If you forget about it, then that is proof that it was never really an important purchase, to begin with.
If the purchase still bothers you, try saving up for it over a few weeks. It should give you enough time to think more about it. If not, then at least the purchase would not impact your budget all that much. If you save up for it, paying by cash makes you realize the amount you are using if you feel it by hand rather than swiping it with a card. This is also a great way to make you think twice about the purchase.
Money-saving tips you can do now
There are also a few things you can do now to help you stay away from those impulsive expenses and save money along the way.
Avoid bringing all your credit cards
Leaving your credit cards at home except for the ones you need can help save you money. Especially as Fortune shares that Americans have about 4 credit cards under their name on average. If you are heading out to the market to stock up on groceries at home, bring only the card you use for groceries. If you’re headed to the pharmacy for medicine, bring only the card you use for health-related expenses. This prevents you from buying unnecessary things as well as maximizes your rewards and points for the card.
Do not save your credit card info on your computer
If you use your computer or mobile phone to shop, make sure you do not have your credit card information saved on these devices. This makes it easier for you to shop for things you might not actually need. If you have to put in your credit card details every single time, it gives you enough time to think through the purchase.
It is tough when you try to stay away from impulsive purchases but there are tips you can look into to help make it easier for you to guard your finances.