Have you ever made a purchase you weren’t intending to make? Maybe you saw a beautiful handbag and thought to yourself — I need that! Well, you aren’t alone. This type of purchase is called an impulse purchase, and Americans are estimated to spend $182.98 a month on them. In fact, research shows that in 2020 we spent 18% more on unplanned purchases as the pandemic went on.
Obviously, shelling out nearly $200 in unplanned expenses a month isn’t a good idea for your budget. That’s why we’ve compiled this list of tips so you can learn how to stop impulse buying.
What is an impulse purchase?
First of all — what exactly is an impulse purchase? In short, it’s anything you bought that you weren’t intending to. While we used the example of a fancy handbag above, it doesn’t always have to be something so interesting. For example, the top impulse purchase in 2020 was cleaning supplies, with 42% of Americans buying them needlessly. Naturally, this was followed closely by hand sanitizer, toilet paper, and hand soap.
There are many reasons you might make an impulse purchase. Some people have a shopping addiction that they use to cope with negative feelings. Others may fear missing out on a big sale or promotion. But either way, when you shop without planning to, you’re putting your financial health at risk.
Why is impulse spending so bad?
When you make an impulse purchase, you can harm your savings and financial outlook. First, if you use a credit card to pay the bill, that may make your statement harder to pay off at the end of the month. Sure, you can choose to pay only the minimum balance, but then you’ll be hit with interest charges. If you’re not careful, you could snowball yourself into debt.
Even worse, if you end up missing that credit card payment, you’ll be hit with fees and possibly even a penalty interest rate. And that’s just short-term damage. In the long-term, you’ll damage your credit score, which can limit your future loan opportunities. That’s why we’re here to help you avoid impulse spending at all costs.
How to stop impulse buying
Here are some key tips to help you stop impulse buying when you feel the urge creep up!
1. Avoid temptation
The best way to stop an impulse purchase? Avoid places that sell things you want to buy! Especially those with "buy now, pay later" options! This might mean avoiding the mall or blocking your favorite shopping websites. When you’re constantly surrounded by shiny new objects, you’re bound to be attracted to them. Don’t risk the temptation, and that way, you know you’ll only be buying things you really need.
2. Stop and consider
Before making any purchase, ask yourself — do you really need this item? Up to 53.8% of women make an impulse purchase because they have a fear of missing out on a sale or good deal. Perhaps even worse, 36.4% of women said they made an impulse purchase because they had no reason not to. We beg to differ on that one!
Our take? Stop and wait a day to see if you still want it then. If you still absolutely can’t live without it, see if you can move your budget around a bit to make the purchase work.
3. Create and stick to a budget
Budgeting should be one of your top goals. There are a number of budgeting methods to try. Regardless of which plan you pick, you’ll likely separate your money into an emergency fund, debt fund, essential needs fund, and life goals fund. Then, if you have enough leftover, you can create a category for personal spending. That way, you can limit your impulsive buying to however much you allot to this category.
4. Think about your motivations to make an impulse purchase
For some people, impulse spending is about looking good in the eyes of others. You may be concerned about how others perceive you. Sometimes, having new things can elevate your image.
For other, an impulse purchase can stem from being overly emotional. You might have a hard time controlling your feelings or have anxiety about certain issue. An impulse purchase can be a way to try and make yourself feel better.
If any of these are the case for you, you might want to work on the root of your problem instead of patching it up with a new purchase. Take a deep breath and think about your motivations before taking out your credit card.
5. Limit your cash and credit
If you’re going out, only take cash with you so you can’t impulsively rack up credit card debt. Credit card users spend up to 83% more than cash users on a given purchase. Or if online shopping is your problem, you may want to freeze your credit cards. You can do this by contacting your credit card issuer directly.
6. Stay off social media
These days, social media is more about product placement and influencing than it is connecting with friends. Even if you’re just using it to see how your loved ones are faring, you’ll be exposed to tons of ads along the way.
And those ads are effective. Research shows 55% of consumers have bought a product through a social media channel. To avoid becoming part of that statistic, your best bet is to avoid social media altogether (or use an ad blocker).
7. Remind yourself of your goals
Chances are, you have a lot of financial goals. Maybe that’s retiring early or saving up for a big vacation. You won’t be able to reach these goals if you’re not spending according to plan.
Sure, spending a little extra here or there might not seem like a big deal. But every impulse purchase you make takes away from all of your hard work. It will take you that much longer to get out of debt or build up your emergency fund. Are you willing to sacrifice these goals for a few moments of shopping bliss?
Put a permanent end to impulse spending
Treating yourself every once in a while is fun, but only when it fits in your budget. Regular impulse spending is not a good financial habit. Hopefully, you’re now armed with the tips you need to know how to stop impulse buying and avoid your next impulse purchase. We also have more tips to help you learn how to stop spending money and get on the path to financial freedom.