How to Tame the Impulse Shopping Beast

Most consumers are well-aware of the financial risks associated with impulse shopping. But knowing about something and being able to avoid such behavior can be two very different things. Nothing can derail your financial goals quicker than unplanned purchases made in haste.

Impulse buying used to be associated with small the gauntlet of items you have to navigate to check out in any major grocery store or other retail outlet. Candy, soft drinks, magazines, lint rollers- you name it and it is probably going to be there to tempt you to throw it into your shopping cart. The stores know what they're doing. Any time you have to wait to check out, what else is there to do but look at all the things offered right in front of you?

There are some interesting statistics which suggest that impulse shopping now has moved into the realm of big purchases, such as cars and homes. A paper published by the National Bureau of Economic Research indicates that impulse buying is a real psychological occurrence and is much more widespread than originally thought. Just look at some of the surprising results:

  • Homes for sale which have swimming pools sell for more than $1600 more in the summer months than during the winter.
  • When the temperatures are extremely hot, fewer black cars are sold.
  • 6% more four-wheeled drive cars are sold in the three weeks following a major snowstorm.
  • A day which is 9 degrees hotter than average will generally result in an 8.5% increase in the sale of convertibles, even during winter months.

An important detail to remember is that impulse buying is irrational. Purchases made in the heat of the moment rarely coincide with your long-term financial plans and if you are living on a tight budget or working towards financial independence, they can be utterly devastating.

Ways to Stop Impulse Buying

We live in an instant-gratification culture. Savvy marketing people know exactly how to entice consumers into purchasing things they don't need or won't ever use or both. Let's face it- buying something can make you feel good (at least in the short-term). And there are times when you need to purchase an item. The key is planning for these times so that they don't wreck your budget and put you into a deep financial hole.

The following suggestions should help you avoid impulsive shopping by understanding what may trigger it and knowing what to do to guard against it.

  • Make shopping lists. Whether you are going to the grocery store or to a department store, make a detailed list of what you need and stick to the list.
  • For items over $100, give yourself a month to think it over. Write down the item on a list but wait at least thirty days before actually making the purchase. You will probably find that you don't really want the item after the waiting period or perhaps you can find it for at a better price. The important lesson here is to delay the purchase and allow the initial excitement to dissipate.
  • Don't watch too much television. Advertisements make up a significant portion of regular television programming. When you are constantly bombarded with ads touting products which will make you happier, thinner, or younger-looking, it's easy to succumb to the hype. There's a reason that these advertisers have billion-dollar budgets!
  • Make impulse buying as difficult as possible. Leave your credit cards at home. Only take enough cash to purchase what you need.
  • Never shop when you're hungry or upset. Studies have consistently shown that people overspend when they are hungry. This is especially true at the grocery store but is also relevant when you are shopping at other retail stores. If you're feeling sad your mind may tell you that buying something will make you feel better. Don't believe it.
  • Shop alone. The last thing you need is a partner in crime. If someone has a bad influence on your spending habits, don't invite them along when you shop.
  • Be leery of special offers and deals. If it's not on your list (which means you don't need it) it's not a bargain and you're not saving money!
  • Always track your spending. If you have no idea where your money is going every month, you need to start tracking your expenditures now. It's impossible to maintain a budget or work towards your financial goals without knowing what you're spending.

There is a quote from Oscar Wilde, the brilliant Irish writer and poet, which says: "I can resist everything except temptation". That pretty much sums up impulse buying... it can feel very good in the moment. But the aftereffects can be sobering... unexpected expenses... additional debt... a budget in disarray. Keep your financial goals within reach by understanding impulse shopping and actively working to avoid its pitfalls. You (and your bank account) will be glad you did!