In today’s consumer-driven society, impulse buying has become a common phenomenon that often leads to financial stress and instability. We’ve all been there – we look at a certain item in a storefront display, it piques our interest, and right then and there, we buy it from the store! While it may provide a temporary sense of satisfaction, it can wreak havoc on personal finances.
Today let’s take a look at what impulse buying is, understand its detrimental effects, and discuss practical strategies to finally check or stop the urge to spend on impulse buying.
What is Impulse Buying?
Impulse buying is characterised by making purchases on a whim, driven by emotions and desires rather than rational decision-making. It often occurs when individuals are swayed by attractive advertisements, peer influence, or succumb to the thrill of immediate gratification. From that trendy outfit to the latest gadget, impulse buying can quickly drain your bank account and hinder your progress towards financial stability.
In Australia, some people admit that impulse buys are a serious “sickness,” given the country’s economic prosperity and the opportunities to spend that wealth on. Data from Savings.com.au back in 2021 indicated that 60 per cent of Aussies bought on impulse at least once in the 12 months prior, with as much as $108 changing hands. A Finder study from 2022 looked at social media planting some seeds for impulse buys; 40 per cent of 1,054 respondents admitted they bought a product on impulse after seeing it in a social media ad – and 28 per cent had buyer’s remorse.
Effects of Impulse Buying
Impulse buying can strain your financial resources, leaving you with insufficient funds for essential expenses and long-term financial goals. It creates a cycle of debt, as impulsive purchases are often made using credit cards or loans, accumulating high-interest charges that are difficult to pay off.
While impulse buying may provide a temporary sense of happiness and excitement, it is often followed by feelings of regret, guilt, and stress. This emotional roller coaster can negatively impact your overall well-being and create a vicious cycle of impulsive spending to alleviate those negative emotions.
Ways to End Your Impulse Buying
Some people may see impulse buying as an ugly scourge of shoppers, but it doesn’t have to end that way. There are ways to beat that urge.
Create a Budget
Developing a comprehensive budget is the foundation for effective financial management. Start by listing your monthly income and categorise your expenses, including essential needs, savings, and discretionary spending. Allocate a specific amount for discretionary spending and commit to sticking to that limit. Canstar’s Effie Zahos said applying the 70/20/10 formula – 70 per cent for essential expenses, 20 per cent for savings, and 10 per cent as disposable income – works when you need to seriously manage your budget, as money for impulse buys may come out of the disposables, but you can still decide on buying by impulse.
Set Financial Goals
Establishing clear goals provides motivation and direction for responsible spending. Whether it’s saving for a dream vacation, paying off debts, or building an emergency fund, having tangible goals will help you prioritise your spending and resist impulsive temptations.
Wait 24 Hours
Before making any non-essential purchase, apply the 24-hour rule. Wait for at least 24 hours before buying the item. This cooling-off period allows you to reconsider the purchase, evaluate its importance, and determine whether it aligns with your financial goals. There are cases where holding off the purchase can help you realise you don’t need it after all or it is not yet the time to get it.
Take the case of a major online hobby store selling rare kits, toys, and accessories. While browsing, you chance upon a few items you’ve been wanting to buy for a while but never had the money for and have not appeared in stock for some time. You bookmark them in your account’s watchlist, but when you check back the next day and press the “delete SOLD OUT items” button to identify which items in your watchlist are still available, the specific items disappear because somebody already bought them. While you may be regretting not placing the order, you gradually accept that it’s ok.
Make a Shopping List
When heading to the store, always make a shopping list and stick to it. This simple yet powerful strategy helps you stay focused on what you truly need and prevents impulsive purchases of unnecessary items.
Avoid Temptation
Recognise your triggers for impulse buying and take proactive steps to avoid them. Unsubscribe from retailer newsletters, limit exposure to advertising, and avoid window shopping or browsing online stores aimlessly. By reducing exposure to temptation, you can curb impulsive urges.
In some cases, the ad copy has its own way of reeling you in. How many times have you seen large discounts on some items, including at least one item you wanted to buy before if not for the huge price tag?
Practice Mindful Spending
Cultivate a habit of mindful spending by questioning your motives before making a purchase. Ask yourself if the item is a genuine necessity that can help you in the long term or simply a desire driven by emotions. Some responsible sellers may sum up that in a maxim of “just because you have the capability to buy doesn’t mean that you should.”
Seek Support and Accountability
Enlist the support of family, friends, or a financial advisor who can hold you accountable for your spending habits. Discuss your financial goals with them, share your challenges, and seek guidance in making responsible decisions.
Conclusion
There’s nothing wrong with spending some of your hard-earned cash on certain products and in the process help stimulate the local economy.
Impulse buying may provide momentary gratification, but its long-term consequences can be detrimental to your financial future. By understanding the nature of impulsive spending and implementing practical strategies to control it, you can tighten the reins on your wallet and move towards financial stability and peace of mind.
DISCLAIMER: This article is for informational purposes only and is not meant to be official financial advice. QUICKLE has no relationships with any company or individual mentioned in the article.
