Over half of Gen Zs and Millennials make an impulse purchase every few weeks to treat or reward themselves, according to GWI Research. If we get promoted at work, have a hard day or meet a fitness goal, we reward ourselves with a purchase. And with buy-now-pay-later schemes like Klarna and ClearPay, it is easy to do it.
However, at the end of the month, we are left with a collection of possessions and a huge credit bill that sends us way over budget. Whether it is a spur-of-the-moment online shopping spree or an unplanned purchase at the checkout line, these impulsive buys can significantly impact our financial health.
At the core of impulse spending is a psychological trigger that prompts us to make immediate purchases. Our emotions and environment often influence this behaviour and the clever tactics retailers use to encourage impulse buying. Retail therapy, for example, is a common justification for impulsive purchases, where we seek comfort in buying items we do not necessarily need.
Recognising our spending habits, especially impulse buying behaviour, is the first step in managing them. It is not just about the occasional indulgence but the frequent, unplanned purchases that can add up.
Impulse purchases, while seemingly harmless in the moment, can have long-term effects on our financial stability. These unplanned buys can quickly derail budgets and lead to financial strain. Understanding the impact of impulse buying on our finances is crucial in developing a strategy to counteract it.
Here are a few practical strategies that will stop your impulse spending, at least for a little while.
Awareness is key in curbing impulsive spending habits, and it is time to start acknowledging your shopping behaviour patterns. Are you more prone to impulse buys in a particular store environment or during online shopping sessions? Recognising these patterns can help you avoid situations that trigger impulsive purchases. You could unsubscribe from your favourite brand's newsletters and social media accounts, so their upcoming offers do not tempt you.
Establishing clear boundaries for spending money is an effective way to manage impulse shopping. This might involve setting a budget for different spending categories or allocating a specific amount for discretionary purchases. If you have a lot clothes you don't wear, you could start selling them on Depop and Vinted and assign this money to any new pieces you want. That way, you can still purchase items, but you are not building up a huge collection and binging on fast fashion sites.
The checkout line is a hotbed for impulse buys. Retailers strategically place tempting items here to encourage last-minute purchases. Be mindful of this tactic and resist adding these items to your basket unless you need them.
You could also leave your basket for 24 hours to decide whether you really need the items. If you can’t stop thinking about something, then you know it is something you want! But the chances are you may also forget about it and stop yourself from making the purchase.
While retail therapy can offer temporary emotional relief and instant gratification, it is essential to find healthier and less expensive ways to cope with emotions. This might involve seeking alternative activities that provide comfort and satisfaction without the financial repercussions of impulsive buying.
If you need to get a handle on your finances, you could try a no-spend challenge. Only spend money on things you need for one month, like bills and food, and save everything else. This will force you to stop impulse buying for the time being and experience saving more money instead.
Managing impulse spending is about understanding the psychological triggers and environmental factors that lead to impulsive purchases. By being mindful of your spending habits, setting clear financial boundaries and recognising the tactics used by retailers, you can develop a more disciplined approach to shopping. This behaviour shift protects your wallet and promotes a more intentional and fulfilling shopping experience.
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