No matter how economical you are, no one is immune from making impulse purchases from time to time. But the more you give in, the more harmful it can be to your financial life.
Overspending is a common barrier to achieving critical financial goals. Spending more than you can afford or buying things you don’t need can kill your financial stability.
To reduce the high tendency of impulse spending, here’s a quick exercise to help with impulse buys:
- Plan your purchases
Making a list before you go shopping is essential. Make it a habit to stick to that list, and you’ll eliminate a lot of little impulse buys. For other purchases, make it a habit to plan them, save for them, shop around, and even see if you can get it for free. Going through this process ensures that your purchases are more deliberate and less on impulse—plan for anything that matters to you. For example, your birthday and Christmas gifts and other large purchases you know are coming up in the month ahead.
2. Create a 30-day list
When you are having the urge to spend takes over, instead of indulging in a bout of shopping, add that item to your list. Note the item, date, and cost. Then, in 30 days, revisit that list, and see if you still desire that said item.
Adopting this rule helps you not make impulse buying (except necessities) until a 30-day waiting period has passed. Put a 30-day list on that item you want to buy, and when you have the urge to buy something, put it on the list with today’s date. After a month has passed, you can buy the item. Many times the urge will have passed, and you can cross the item off the list. The only exceptions would be groceries and other similar necessities.
3. Journal and talk about your money experiences.
Starting a money diary and talking about money with family and friends with whom you are comfortable will help you build self-awareness.
When you start having a money diary, you can figure out your money behaviour and know how you relate to money. Also, try and open up about money matters. I agree with you that the thought of having these conversations can be awkward or uncomfortable. However, not talking about money could lead to misunderstandings and even miss an opportunity to pass on necessary know-how to your kids and family members.
4. Create a separate account.
Let’s be honest: there are times when we come across a good deal like promos or discounts that you want to jump on, and we want to splurge. Create a separate savings account just for these spendy moments. It will help protect your emergency fund, which will make you less likely to feel like you’ve failed and abandoned your money goals entirely.
5. Keep the Goal in mind.
It’s helpful to have clear goals in mind at all times. Do you have financial goals that you’re trying to accomplish in the long-term and medium-term? Keep your savings goals in mind, and know when you’re purchasing how the purchase will affect your plans.