Saving money or being more financially secure is one of the most common new year’s resolutions. But in reality, most people fail in sticking to this resolution. One reason is impulse buying.
Impulse spending can be beneficial, but it’s rare. For example, impulse buying necessities on sale can mean saving money in the long run. But more often, impulse buying has negative consequences. The first one is buyer’s remorse. Another one is overspending. One survey found that in April 2020, Americans spent around $182.98 a month on impulse buys. This number increased from $155.03 monthly impulse spending in January 2020. If money’s tight, buying something impulsively can affect one’s daily budget.
To be financially stable in 2021, people need to cut their habit of impulse buying with the help of these strategies:
Three-day Rule
One way to avoid impulse buying is following the three-day rule: you need to wait three days before buying anything. This period will give you ample time to rethink things. The general rule is to only buy something if you still want it after waiting for three days. To make things more challenging, you can also consider if you really need the item you want to buy. Will you be able to use it more than once? What value will the item add to your life?
Stick to a Shopping List
A situation when you can potentially spend impulsively is when you go out to shop for groceries and other essentials. You might see something nice on a store window and be attracted to it so much that you To prevent impulse buying, make a shopping list, and stick to it. Hang a pad and pen on your refrigerator door. Throughout the week, when you find things that you need to buy, add them to your list. This way, you won’t forget anything when you shop, and you can commit to only buying what’s on your list and nothing else.
Expense Monitoring
You can also control your spending by diligently tracking what you earn and spend. Consider getting a notebook where you will write all your cash and card transactions.
Tracking your expenses will help you understand your spending habits and re-evaluate the things you spend on. For example, let’s say that in a particular month, you spent almost the same amount as the money you earned. This can be an issue, especially if you still have monthly bills to pay. And worse, if you overspend and are unable to pay your credit card bills on time, you won’t be able to apply for property refinancing when the need arises. You can then check your tracker to find unnecessary things you spent on that you need to avoid in the following month.
Check What You Already Own
Sometimes, you might want to buy something because you think you don’t have one yet. For example, Person A wants to buy a new notebook with nice, smooth pages. But it turns out they already have a few that they haven’t used in years. In this case, Person A wasted money on a duplicate item. Thus, before buying anything, check what you already have in your possession. Maybe you already have the item you want hiding somewhere.
You might even make an inventory of the things you own for easier checking. Consider what items you impulse buy often. List down the items you own. For example, say you have a book collection. List all the titles you have. Mark which ones you’ve read and haven’t read. When you feel the urge to buy a book on a whim, check your booklist first. Perhaps you have a book with a similar genre that you haven’t read yet. Seeing it will help you realize that buying a new book right now may not be a good idea.
Use Cash Whenever Possible
It seems impractical to use cash nowadays. Everyone’s shopping online to avoid going out. New research found that the coronavirus can stay in banknotes for up to 28 days. So you might want to keep using credit and debit cards for payments. But they are so easy to use that you can easily overspend and impulse buy items.
Thus, you’ll be able to control your spending by using cash whenever possible. Whether you’re going out to buy something or avail services, leave your credit cards at home and pay with cash. Even the physical act of giving someone your money as payment can trick your mind and make you less likely to spend more.
Impulse spending can be tough to avoid at first. But with the help of these strategies, you’ll be able to gain back control of your finances.