Impulse spending is often considered to be the gateway to mounting credit card debt. An impulse buy may seem innocent enough at first, but they can add up quickly, putting you in a financial bind.
In a recent poll of adult women, 60 percent revealed they had purchased something “on a whim” in the last year, including 39 percent who said they had purchased something on impulse in the last month and 15 percent who said they often bought things on impulse.
To make matters worse, these impulse purchases were on average more than $100. Here are five ways to help stop impulse buying.
1) Track your spending.
When you keep track of all your receipts, you may be surprised on how you spend your money. Those going on a diet are often told to keep track of what they eat to keep portions in control. The same goes for finances: Keeping track of your spending habits will help you keep your cash flow in control.
2) Identify your weak points. Once you track your spending, you may find a pattern or habit you are unaware of. Find out which purchases are planned through your budget or what is spur of the moment. You may overspend or have a weakness for certain items or even certain situations. Find out where your temptations are so you can learn to avoid them. In the same poll, 35 percent of the women stated they regretted the impulse purchases they made. One tip is to have shopping trips and just-looking trips. When on a looking trip, leave your money and credit cards at home to prevent impulse buys, and plan what you will purchase on your shopping trips.
3) Separate needs vs. wants. Some purchases may be things you may not really need. To help distinguish between wants and needs, do without it for certain period of time. If you still need the item, it may be a need. Also realize that what may be a need can turn into a want. Buying a car may be necessary to travel to work, but buying a luxury car may not be the best thing for your finances when an economical car will do.
4) Create and stick to a spending plan.
This will help you see the big picture to meet your financial goals. Impulse buying is unplanned spending or spending more on an item than you anticipated. When you create a budget, you assign each dollar you make to each dollar that you plan to spend or save. Determine how much discretionary spending you can afford per month and stick with that amount for anything you may want. Think in terms of cutting back, not cutting out.
5) Be accountable to family and friends.
Having a support network will help impulse buys. Your friends and family can pull for you, pull against you and pull with you to make sure you keep to your spending plan. They can help you see the big picture by reminding you of your long-term goals and take the emotions out of an item you may want to buy.
Creating a proper balance between spending on what we need and want is important. It takes work, reflection and self-awareness.
Spending time and working with others to prevent any unnecessary spending will be beneficial in the long run and ensure you meet your goals!