Do you have a problem with money just slipping through your fingers, or with acquiring far more new possessions than you can possibly make use of? A startling five out of every six Americans do that, and the figure is even higher in younger generations, suggesting that the behavior is becoming more common. In total, Americans spend almost $18bn a year on unplanned purchases. The problem is that a lot of that is spent by people who can’t really afford it.
A serious problem
A worrying 45% of impulse buyers regret their shopping choices. Some 19% worry that they’ll struggle to pay for what they’ve just bought. When you listen to stories from past lottery winners you’ll find that even they can get into trouble due to impulse buying, with 70% spending all their winnings within a few years; these lottery winner stories make clear that the problem isn’t about how poor you might be to begin with, it’s about how easy to is to slide into poverty due to uncontrolled spending. What’s more, even people who retain enough money to live comfortably often report feelings of low self-esteem caused by their spending and the sense of loss of control that it brings. If you want to gain more control over your spending, the following tips may help.
Despite the fact that we now do more and more of our shopping on the internet, 68% of impulse buys are still made in traditional stores. That’s because they’re usually a response to emotional triggers such as scents which you can’t (yet) experience over the internet – and because when you’re in a store, it’s much easier to find yourself face to face with something you hadn’t thought about buying beforehand. Simply avoiding stores except when you must go there for necessities can significantly reduce the amount you spend unnecessarily. Online, you can make use of child protection filters to selective block your access to sites you find particularly tempting. Even though you could always change the software, having to do so creates a delay and can help you snap out of that impulsive mood.
Make yourself wait
Delaying tactics can also be applied in other ways. You can make a rule that if you’re going to buy something over a certain cost value, you’ll wait a week before doing so, and only buy it if you still really want it at the end of that time. If you worry that you might miss out on a good price by doing so, use some of that time to see if you can find it for a lower cost elsewhere.
Budget for treats
Because it’s impossible to stick to an austere budget all the time, allow for the fact that shopping can make you happy by setting yourself a sensible, limited budget especially for treats. If you stick to it, you can then enjoy the thrill of splashing out without the downside of feeling bad about spending too much. What’s more, you’ll know that if you manage to spend less one week, you can carry over the remaining money and treat yourself to something bigger the following week. That will help you to start feeling good about saving up money, getting you into healthier financial habits.
Get smart about saving
Did you know that 88% of impulse buys are motivated by seeing items on sale? We tell ourselves we’re saving money by getting things when they’re cheap but if that means we’re spending more overall, it’s counterproductive. It’s important only to buy things like this if you will definitely use them. If you find it hard to be clear about that, make a list of the things you need before you go out, and only buy what’s on the list.
Set financial goals
It’s easier to avoid spending all your money if you have clear financial goals, such as making improvements to your home, which mean you can easily see the value of putting money aside. Even if you have nothing specific to save up for, it’s sensible to keep a rainy-day fund, so you should aim to build your savings up to a certain amount and keep them there. Once you’ve done that, you can feel good about yourself, and you’ll have a bit more money free to enjoy each week while keeping your savings intact.
Getting control of your spending will, in turn, give you more control over your life. If you have children, it will also help them to develop better financial habits, improving their life chances – and that’s priceless.