You work hard for your money and impulse spending, or unplanned purchases on things that you probably don't need can be a huge drain on your finances. According to Insider, Americans spend an average of $450 per month on impulse buys, adding up to $5,400 per year and almost $324,000 throughout someone's life.
Managing these impulses can have a potentially huge effect on your financial situation, helping pay off debt, accumulate savings, and develop healthy money-saving habits for the future. Knowing how to avoid this type of spending is key and we have accumulated a few vital tips and tricks to avoid impulse spending to ensure your financial health isn't affected.
Make a Budget
Maintaining and sticking to a budget is absolutely vital for financial health and success. If you do not already have one, make a budget as soon as possible. There are a ton of free budget creating apps and sites out there, but all you really need is a spreadsheet or pen and paper. Following your budget is really the only way to know where you stand each month, how much you can contribute to your savings, and how much debt you can pay off while still paying all of your bills.
Shop with a Plan
Dave Ramsay suggests knowing exactly what you need and approximately how much you will be spending before even entering a store. There are shopping list apps that will even find the best prices on items that you need to buy, so you know you are getting the best deals. Most grocery stores have list functions on their apps and websites that tell you your totals and the aisles where you can find your items after you complete your list. This will help you avoid the temptation of strolling through unnecessary aisles and know exactly what your total will be when it comes time to pay. You can even avoid the store completely by ordering online and picking up in-store: bypass those impulses completely.
Cut Out Emotional Shopping
According to My Money Coach, certain moods and emotional states make us more prone to impulse buying. Knowing when we are more apt to spend based on our moods and finding other ways to channel these emotions is a much healthier way to cope, mentally and financially.
Be Aware of Retail Tricks
Retailers know exactly how to rope us in to spend more money when we are in their stores or on their websites. Insider warns us to be aware of common strategies like free samples, buy one get one sales gimmicks, out of reach cheaper options, and visual and smell tactics designed to be irresistible.
Sleep on It
Chances are, when you've put the item down and walked away, it isn't so enticing anymore. After you've had 24 hours to think on it, you can approach the purchasing decision with a clear head, if you still need the item, then work it into your budget. This also allows you to walk away from other retailer tactics such as the 24-hour sale or short-term deals that add a false sense of urgency to the purchase.
Keep a Visual Reminder of Your Goal
Before making those impulse purchases that add up, think about your financial goals. Do you want to pay off credit card debt, save for a large purchase, or save for retirement? Lifehack suggests that we think about how long it would take to pay off an impulse purchase before swiping that credit card. Another great suggestion from Insider is to create visual reminders of your goals like an image of your dream house as the background on your phone; that way you can always have a visual reminder of your goal.
With the potentially huge financial impacts that impulse spending can have on Americans, it is important to be vigilant when shopping. Keep these tips in mind and you could avoid accumulating possibly massive debt while achieving your financial goals.