It’s happened to all of us — we’re browsing online, and suddenly, we’ve spent more than we intended on fun little impulse buys. Or we go to the grocery store on an empty stomach, and before we know it, the shopping cart is full.
Impulse spending sneaks up on us in quiet moments, whether we're browsing online shops or waiting at the grocery store checkout line. Before we know it, a seemingly harmless pair of shoes or gadget has dented our bank account, and we're left grappling with buyer's remorse.
The impact of these impulse purchases goes beyond an immediate hit to our checking account. Each impulsive decision creates a ripple effect that can cause significant financial stress.
Savings meant for financial goals are often the first casualties. Instead of growing our emergency fund or saving for a much-needed vacation, we're left plugging holes in our budget caused by unplanned expenditures. This stress can further perpetuate the cycle of impulse buying as we turn to retail therapy to cope, leading us further from our goal to save money.
What causes impulse buying?
Impulse buying is often triggered by a variety of factors:
- Social media platforms, which use targeted ads to show us exciting new products.
- Seeing an influencer or friend's new purchase, which can cause us to splurge a little more than we mean to.
- Having a bad day, which can cause us to turn to retail therapy in order to feel better.
Product placements, particularly at the grocery store checkout lines or on the front pages of online retailers like Amazon, are also specifically designed to cause impulse spending.
Techniques such as one-click purchases, personalized recommendations, and time-sensitive deals can seduce even the most disciplined spender into buying items they hadn't planned on buying in the first place.
How can you identify your impulse spending habits?
Identifying your impulse spending habits is a key step toward making healthier financial decisions. It's essential to pay attention to when and why you tend to make unplanned purchases.
Consider questions such as:
- Do you tend to splurge more after a hard day?
- Is the checkout line at the grocery store a temptation hot spot?
- Do you find flashy ads for a new pair of shoes or the latest gadget irresistible?
Recognizing these triggers can help you develop effective strategies to counteract them. While you can’t always control whether or not you have a bad day, you can trade your online scrolling for a few episodes of your favorite show or a comfort meal.
Discretionary spending, or the part of your income left after paying for necessities, plays a significant role in impulse purchases. While enjoying this part of your income is completely fine, it's important to make sure you avoid making a habit of overspending — especially before your bills are paid off for the month.
How can impulse buying affect your financial health?
Impulse purchases, especially when made with a credit card, can quickly lead to credit card debt. This mounting debt can, in turn, harm your credit score, potentially affecting your financial stability in the long run.
Also, overspending on unplanned purchases can obstruct your path toward financial goals like homeownership, building retirement savings, or establishing an emergency fund.
How can you stop impulse buying?
While it may seem overwhelming, taking control of your finances and stopping impulse buying is achievable. Here are a few strategies you can try:
Create a shopping list
Creating a shopping list before heading to the store can prevent spontaneous items from making their way into your cart. Doing this can improve your shopping habits and help keep you focused on purchasing necessities, as well as provide a sense of structure around spending.
Sleep on it
Implementing a waiting period before making a purchase, particularly for higher-cost items, is another effective method to dodge buyer’s remorse. This pause gives you time to think about the item and decide whether or not it’s a necessary or worthwhile purchase. This isn’t about saying “no” to an item — it’s about saying “maybe tomorrow.”
Make purchasing difficult
Another strategy involves removing your credit card information from online accounts. By doing this, you create an additional step in the buying process, giving you time to pause and think about whether or not you truly need the item.
Set savings aside automatically
One way to help limit impulse spending is to have a set amount of money that automatically transfers to a savings account or emergency fund after your bills are paid. This can not only make sure that you’re taking care of your savings and building smart financial habits, but it can also help limit the amount of discretionary income available for you to spend.
Just make sure you account for this when using AutoPay — you could get stuck with fees if your automatic payments exceed the contents of your checking account.
Try a spending challenge
You can also consider using a "spend challenge," such as going a week or month without unnecessary purchases, to help you manage impulse spending. This can not only help you limit your spending, but it can also help you identify which items are truly necessities and get a better picture of what your necessary spending should look like.
Use a debit card
If you have a problem with overspending on credit cards, opting to use a debit card can also be helpful. This way, you’re only spending money that you actually have in your bank account. You can still use your credit card for your necessary expenses, like bills and rental payments — it may just be helpful to keep the credit card for emergencies while you’re building healthy financial habits.
Unsubscribe from services
Marketing emails with enticing deals and discounts can swiftly steer us toward unneeded purchases. By hitting the unsubscribe button on these email lists, you can shield yourself from these financial snares, dramatically reducing the odds of impulse shopping.
Yet, the path to controlling impulse buying doesn't stop with your inbox. Social media, with its crafty product placements and compelling influencers, can be a major instigator of spontaneous purchases.
Even if you're just logging in to catch up with friends or plan your next shopping trip, the onslaught of ads can lead you down the road of overspending. To help control impulse shopping, it may be worth it to limit your social media time or temporarily unfollow the accounts that cause you to spend more.
How can Vital help with impulse spending?
Vital Card can be a valuable tool in controlling impulse spending. Its features encourage responsible sharing and spending, helping you to remain conscious of your spending habits. Regularly using your Vital Card App can help you identify your spending habits and become more aware of your financial behavior.
As a part of its design, Vital rewards good spending habits, and can even help you bolster your credit health over time. Using the card with awareness and intention can help you align your spending with your financial goals, potentially reducing impulsive purchases. By paying attention to the Vital Card App's spend tracking and credit health monitoring features, you can not only control impulse buying but also support your overall financial well-being.
The bottom line
Understanding and mitigating impulse spending is a key step toward achieving better personal finance. Each time we resist an unplanned purchase, we're not just saving a few dollars; we're investing in our future financial stability. It's about shifting our perspective and seeing beyond the immediate allure of a potential buy.
Ultimately, it's about taking control. We have the power to shape our spending habits, turn our financial goals from dreams into realities, and break free from the chains of impulse buying. It's not an easy journey, but it's one worth taking. By taking these steps, we can transition from spontaneous spenders to savvy savers, one shopping list at a time.
If you’re ready to take that next step, consider using Vital Card. To learn more and join our waitlist, browse our website today.
Sources
How to Avoid Credit Card Overspending | Experian
What Is Emotional Spending? | Experian
8 Savings Challenges to Try in 2023 | Experian
5 Bad Money Habits and How to Break Them | Experian
Vital Card blog posts are intended for informational purposes only and should not be considered financial or any other type of advice.