Buying on impulse and overspending can quickly consume any extra money you were saving to put toward those incredible goals. Have you ever opened your credit card statement and been shocked by the amount you owe? Maybe you've reviewed the charges and noticed several purchases that you don't remember making or that you don't need. This could be a sign of impulsive buying. A single impulse purchase may seem harmless, but overspending can add up and cause financial problems.
Read on to learn why impulsive spending can occur and how to break the habit. You'll be amazed at how helpful a plan can be!The first step to curbing impulse purchases is to plan ahead. Start by taking a look at your pantry, setting up a meal plan for the week, and then creating your shopping list based on that. In addition to focusing your shopping on the supermarket, this approach will also help you save money on takeout, self-service restaurants, and other spontaneous buys.
It's also a good idea to plan for gift-giving. For example, decide in advance how much you want to spend this year on birthday presents. Keep track of each person's spending and stop when you reach your limit. If you're having trouble with impulse purchases at big box stores or warehouse clubs, make a list first and then promise yourself to stick to it. You can limit or completely eliminate credit cards and store cards if they allow you to make reckless purchases.
According to the Consumer Financial Protection Bureau (CFPB), an impulse purchase is usually unplanned and can lead someone to spend more than they can afford. It's also useful to remove your credit card information from online stores, as it makes you think twice before making the purchase when you have to type in the number. If impulse buying is something that you recognize in yourself, it might be time to address the root cause. You can also create an amortization fund that you can add to every month to offset some of the costs of impulse purchases. If you like a neat and tidy home, you might find that you can avoid impulse purchases if you consider what you're going to do with the item once you take it home.
It's healthy to allow yourself some freedom in spending, as long as it's planned and budgeted purchases. When you're feeling down or depressed and are particularly drawn to reckless purchases, think about exactly what emotions are driving them. It's okay to leave room in your budget for impulse purchases; for this reason, call it “fun money”. This feature helps people understand their spending habits and locate areas where they might be prone to impulse buys. Allow 24 hours between seeing an item and making the purchase so that you can consider if it fits your personal and financial goals. Avoid going to the mall for a month or compete against yourself or your friends to see who can last the longest without making an online purchase.
Limiting impulse buys means sticking to a budget, setting savings goals, using shopping lists, and paying with cash. Impulse buying is a common problem that many people face. It's important to recognize when it's happening so that it doesn't become a habit that leads to financial problems. By planning ahead, removing credit cards from online stores, creating an amortization fund, considering what you'll do with an item once it's purchased, leaving room for fun money in your budget, avoiding malls or online stores for a period of time, and sticking to a budget with shopping lists and cash payments, you can break the habit of impulsive buying and save money. You'll be amazed at how helpful a plan can be!.