Ever see something at the mall that you cannot resist? It could be a new dress or a new product from Apple. Perhaps you find a stylish pair of shoes that you think you can’t live without. Before you know, you have blown a couple of hundred dollars on an impulse purchase.
When it comes to keeping a budget, one of the biggest potential problems is dealing with impulse buying. Understanding what triggers impulse buying and knowing the steps you can take to avoid spending at the drop of a hat.
What Causes Impulse Buying?
Impulse buying can be described as making an unplanned purchase. Some of the potential reasons for impulse buying are purely psychological. Here is a look at some of the top reasons why you may make an impulse purchase.
It has been shown that making a purchase can trigger stimulation in the brain. To put it simply, our body derives pleasure from acquiring. Stores and markets know this. Generally, products will be offered to you in ways that will make a purchase hard to resist. Product placement is key for retailers, they put very specific items in places you will walk past. The retailer knows impulse buying is real.
Lack of discipline
Another reason why people will make an impulse purchase is simply a lack of discipline. It is kind of like not being able to resist eating that second piece of cake or binge-watching a show when you should get work done. Some people are unable to resist spending more money than they expected.
The need to stockpile
Another potential psychological effect that leads to impulse buying - Is the need to stockpile. Our brain is a complex system that allows us to have several levels of thought. The most primitive parts of our brain are focused primarily on survival. Meaning, that we will acquire or buy certain things that we perceive as being essential to our survival.
One case in point is the outbreak of the COVID-19 pandemic. As the pandemic began to break out, people started to panic buying everything from toilet paper to antiseptic wipes. In this case, millions of people spent millions of dollars on more items than they needed at that time.
When shopping, there is also a need not to want to “miss out” on a purchase. This is why many marketers will build scarcity in their products. You have probably heard the phases, “offer will not last” or “limited supply.” These scarcity phrases can potentially trigger buyers to purchase out of fear of missing out on an opportunity.
You think you spotted a bargain
Many stores like to make it seem like a shopper is going to get a bargain. That is why you will see stores with promotions that will say things like, “Low prices” or “Weekly special.” People will end up purchasing something - that they don’t really need - just because it is on sale.
How to control impulse spending
Now that you are familiar with some of the top reasons people make impulse purchases, it is time to look at the potential ways to avoid impulse spending in your life. Here are five top methods to control impulse spending.
Make a budget
One of the first things that you should do is set a budget. When you set a budget, you are potentially less likely to make unplanned purchases. For instance, you can set a strict $100 or $200 on personal purchases. Doing this may prevent you from spending $300 at one store for items you really do not need.
Stop the comparisons
Another thing that can trigger impulse purchases is the feeling that you have to “Keep up with the Joneses.” This type of attitude can lead to lots of impulse spending. There is no need for you to buy that new $1,000 iPhone if your current phone is working fine. Prevent yourself from comparison with others, and you could potentially avoid major impulse purchases.
Wait before you make a purchase
It is a good idea to wait at least a day before making any decision on an unplanned purchase. Yes, this can be difficult, especially since stores are adding scarcity into their promotions. Consider taking the time and decide whether any unplanned purchase makes sense in your life. You might be surprised to find out you don’t really need that item after all.
Shop with a list or a plan in mind
A great way to potentially prevent overspending is merely bringing a list of things you know you need to the store. Doing this will potentially prevent you from making impulse purchases.
Avoid bringing credit cards to the store
You do not want to spend money that you don’t have. It’s a good idea to leave your credit cards at home when you go shopping. If you are on your computer, make sure that your credit cards are not within arm’s reach. Remember, credit cards allow you to spend money that you are borrowing at a potentially high-interest rate. You do not want that $300 impulsive purchase to potentially cost you another $300 in interest payments.
Don’t be emotional when shopping
When we feel sad or upset, there is a temptation to do something impulsive to deal with the bad emotions. Earlier, we discussed how purchases could trigger happiness in our brains. If you’re feeling emotional think hard before you hop in the car or on public transportation to shop. If you are looking to feel better, you can go for a walk, take a nap, or watch a funny video. All these ways to lighten your mood are potentially free.
Keep your financial goals in mind
Every time you make an impulse purchase, you can potentially push yourself further away from reaching your financial goals. Be sure to keep your big retirement and financial goals in mind before you make an impulse purchase.
Keep your spending in check
Shopping can be a fun experience if you keep your impulse spending in check. Be sure to never make any unplanned purchases on the spot and maintain a strict budget. By controlling your impulsive spending, you can potentially prevent yourself from wasting hundreds of dollars per month.