Inspired Woman Magazine

Impulsive Spending: Happy Now, Broke Later

By Annika Caldwell

I think it’s safe to say most people are guilty of the occasional impulse buy — you are browsing online and you see those words, “All summer apparel 60% OFF!” Soon, your cart is filled with numerous clothing items.

Or, you are grocery shopping while hungry and get home to find you purchased multiple unnecessary food items simply because your growling stomach condoned the purchases. I think it’s safe to say we are all guilty of making an impulse buy… or two… or three. 

Now, one impulse buy might not seem like a big deal, but when those seemingly insignificant impulse purchases continue, they really add up. A 2018 survey published on CNBC’s website, the average U.S. consumer makes three impulsive purchases every week, totaling about $5,400 spent impulsively every year. 

What if we took charge of our spending and replaced that impulsivity with some serious intentionality? What could we accomplish with our money then?

Let’s say a 2017 college graduate reading this article decides she is going to be really intentional with her spending. Rather than spending impulsively, she wants to pay off her student loans — the average 2017 college graduate with a bachelor’s degree graduated with just under $30,000 worth of student debt. By intentionally reallocating that money, she could pay off her student loans in about five years.

Let’s say a 30-year-old woman is reading this article and makes the decision to end her impulsive spending. If that 30-year-old took that $5,400 every year and put it into her Roth IRA or 401K, she could retire at the age of 67 with more than $1.5 million. Maybe you’re not 30, but you’re 50 instead — that’s still an extra $240,000 in your retirement fund. 

We have all done it. We have made purchases hastily without pausing to consider whether we really need that item or not, so how can we avoid impulse spending?

Make a plan.

Go to the store with a list in hand, and stick to it! When people have a plan, they tend to spend less, save more, and avoid impulse buys!

Sleep on it.

I can’t tell you how many times the items in the virtual shopping cart lose appeal by the next morning. If you have your online cart filled up, close your browser. Wait until the next morning to make the purchase. That gives you the night to think about whether you really need those items.

Stop and think.

When you are about to head to the checkout line or click the “submit order” button, stop yourself and think, “Do I need everything that is in my cart?” Think about what you already have at home. If you are not sure you need something, put it back! You can always return to that store or website and purchase the item later if you come to the conclusion that it is something you actually need. 

Delete retailer emails — or unsubscribe.

You know those emails, the ones from retailers that come with catchy subject lines like, “Biggest sale of the season: BOGO 60% off TWO DAYS ONLY” — if you open those emails, you will likely soon be browsing the retailer’s website and have a cart filled with unnecessary items. Do not shop when your email tells you to shop. Instead, shop when you need something.

Plan your splurges. 

Splurges are OK as long as they are in the budget, so plan your splurges. When splurges aren’t planned, they become impulse buys that negatively impact financial plans.

Keep your goals in mind.

I mentioned above that you should stop and think before making purchases. When you are thinking about a purchase, remember to consider your goals. Will making this purchase delay your goals? Is there something that you are saving for that this money would be better used toward? Consider your goals before making purchases.

Rather than spending your hard-earned money on impulses, be intentional and make a plan. Take time to dream and consider your goals. Whether being intentional means paying off debt, choosing to splurge, or saving for retirement, making a plan for your money before spending means that you are putting your money to work for you and your goals!

As a financial coach, author, and keynote speaker, Annika Caldwell is passionate about sharing the story of her own family’s debt-free journey and teaching people, young and old, about the importance of achieving financial freedom.

 

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