Impulse Buying: How to Control Your Spending When You ‘Want it Now’
Regardless of how strict your budget is, you may still be wondering how to control your spending. Impulse buying can tempt even the savviest saver. Advancements in technology have allowed businesses to capitalise on consumers’ need to ‘have it now.’ Gone are the days when shoppers needed to physically head to a department store to browse the latest trends. Online shopping means consumers can browse their favourite stores without ever having to leave the house.
Add credit cards and buy now pay later platforms to the mix and it’s no wonder impulse buying is an easy trap to fall into. If you struggle with spontaneous spending, here is how to make sure you remain in control.
Most of us are guilty about online shopping on occasion. However, it becomes an issue when it stands in the way of achieving your long-term financial goals. If you’re constantly finding yourself ‘adding to cart’, here are our top tips.
Give it time
When it comes to impulse spending, that’s all it comes down to – an impulse! One of the best ways to work out whether you truly want something is to give it time. Create a rule before purchasing anything that’s not a household essential where you give yourself time to think. 24 hours is a good amount of time and allows you to sleep on it. This lets your impulse settle down so you can approach the purchase with a clear mind if you really do need it.
If you’re physically at a store, take a picture of the item and price, and walk away – the sleeping on it rule still applies here! After your waiting period is over, you can revisit whether you still need it. A lot of stores allow 24 hour holds if you’re worried about your item selling out.
While 24 hours is sufficient time, the longer you wait, the better. If you see something you want to buy, write it down and put it somewhere safely out of sight. If in months you’re still thinking about it, go back and get it. Chances are though, you will have forgotten about it and can cross it off your ‘want’ list.
Unsubscribe and unfollow
Part of the reason our online shopping desires are constantly fulfilled is because of the rise in technology. Many of us have a constant flood of ‘junk mail’ in our email inbox from companies we’ve subscribed to, offering sales, discount codes and free shipping offers. 50 per cent off or even 20 per cent off sales lead us to believe we’re getting a great deal on something. It’s the fear of missing out that leads us to justify an impulse purchase based on the 20 per cent or 50 per cent we’ve saved, rather than looking at it for what it is: an unbudgeted-for impulse buy.
Unsubscribing from mailing lists and unfollowing your favourite store’s social media accounts means you won’t be tempted by these offers – out of sight, out of mind!
Revisit your purchases
A $100 pair of shoes here and a $50 indoor plant there may not seem like a lot, but in relation to your overall financial goals, it’s probably costing you a significant amount. To put your impulse buying into perspective, print out your bank statements from the past year. Go through each one and highlight anything that was an impulse buy before adding up your yearly total.
Physically seeing how much you could have saved throughout the year will put that indoor plant or pair of shoes into perspective – especially when it comes to meeting your larger goals.
Managing your money
Money management looks a little different to everyone. If you’re someone who constantly seems to find themselves in debt, or tends to overspend, here is our advice.
Delete buy now pay later platforms
First came in-store laybys, then came buy now pay later (BNPL) platforms. Sites like Afterpay and zipPay allow consumers to purchase an item and repay with interest-free payments over a specified period. These platforms fuel our ‘want it now’ behaviour and, in turn, increase our debt. While it’s appealing to have something instantly without paying straight away, is this impulse purchase something you’re still going to want by the time you’ve paid it off?
Shutting down and deleting your accounts is an easy way to avoid impulse buying. With an increasing number of online stores making BNPL platforms legitimate payment options, the temptation to shop has never been higher. However, while it might seem harmless if you’re paying everything off in time, having these accounts can create issues when trying to achieve long-term financial goals, such as buying a house or being approved for a loan.
For more information on buy now pay later platforms, visit our blog.
Cancel your credit cards
Like BNPL platforms, credit cards are another easy way to overspend and rack up debt. The worst thing is you can be hit with high interest rates which essentially means you end up paying more for the item you wanted originally. If a credit card is only enabling your negative spending habits, consider cancelling them. If you can’t live without one, try decreasing your limit or leaving the card at home when you go shopping to avoid temptation and unnecessary spending.
Make it difficult
The good thing about smartphones? They store all your information for you! The bad thing about smartphones? They store all your information for you. Usernames, passwords, and credit card details can all be securely stored on your phone. Because of this, it’s easy to spend without thinking or even having to get up.
Make purchasing on your phone difficult by deleting all saved credit card details on your phone, as well as any store apps you often find yourself browsing. Having your phone ‘forget’ these details, adds one more barrier to your purchase and makes you think whether what’s in your cart is worth getting off the couch to get your card for.
Keep your ‘splurge’ money separate
Impulse buying is a difficult thing to navigate as it provides you with instant gratification which makes you feel good. While it’s important to have good money habits in place, this doesn’t mean you can’t treat yourself. Put some money aside that can be used as your ‘splurge’ money whenever you like. However, once you use all this money, make sure you aren’t tempted to pull from other accounts.
Having long-term financial goals in mind, as well as smaller, short-term goals is key. Many of us create large, long-term goals that we often never plan for correctly. While the long-term goal is important, setting smaller, more achievable milestones to get there will help keep you motivated and feel a sense of accomplishment. For example, if your goal is to save enough money for a house deposit, break down the goal further to specific amounts you’d like to achieve by certain dates.
Not sure where to start? Plan your budget.
Impulse buying has become easier with the rise of technology and BNPL platforms. Consumers can purchase goods without barely even having to lift a finger – and it’s negatively impacting their long-term goals. Having well thought out goals will help to keep you focused and motivated to achieve them. Chat with our financial advisor team about goal setting today.