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Is Impulse Spending Ruining Your Financial Goals?

4 Minute ReadTopic: budget

Many of us, at some point, have made a spur-of-the-moment purchase that overpowered rational thought. In fact, more than 80% of us have!

According to a recent CreditCards.com survey, five out of six people admit they’ve made impulse purchases. That kind of spending can range from $100 purchases (which 54% of people admit to making) all the way up to $1,000 buys (which 20% of us have done).

It’s tough to resist the urge to buy when your brain gets a shot of dopamine after seeing a flash sale for a big-screen TV or a sweater at your favorite retailer. Whether you’re on Baby Step 1 or Baby Step 7, it can be tempting to spend money you haven’t budgeted for when you are happy, sad, stressed or anywhere in-between.

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With a little know-how, you can say “No way” to impulse purchases! Here are five tips to help you dodge the temptation to spend on a whim.

Related: Don't have a budget? Create one in less than 10 minutes with our free budget app EveryDollar!

1. Wait overnight.

Rachel Cruze said it best: “When you sleep on the decision, you put some time between your emotions and the transaction.” Give yourself a day to calm down when an unplanned spending opportunity gets you jazzed. Once you’re cool and have, as Rachel says, “a fresh perspective,” ask yourself if you’ll actually use the item or service and if you can pay cash for it. That’s a great way to put the purchase into perspective. Watch out for deals that are only good for 24 hours. Don’t be rushed into buying anything! Remember the offer, save some money, and be ready for it next time if you don’t go for it now.

Related: 2 Words That Will Change the Way You Shop

2. Shop with a plan.

Determine what you want to buy prior to leaving the house. That helps keep you grounded—which is a good thing, since the CreditCards.com survey shows 79% of people make most of their impulse purchases in a physical store location. A plan is all the more important when you factor in kids. According to the survey, 21% of respondents said the recipient of their unplanned purchase was a child. Your shopping list can range from grocery items to the Christmas gifts you plan to purchase for your extended family—just know before you go.

3. Take just enough cash.

Decide how much money you need for the items you want and only take that amount. You could even go a step further and leave your debit card at home (gasp!) so you don’t tempt yourself to buy more with plastic. According to Carnegie Mellon professor George Loewenstein, “Credit cards effectively anesthetize the pain of paying.” If you stick to your shopping plan and don’t have any extra moolah, you can’t make an impulse buy—more proof of the power of cash!

4. Don’t shop when you’re emotional.

You may be having a great day and make an impulse purchase in the high of the moment. It could also be the opposite—you’re having a rough time, you see something you want, and you tell yourself that you deserve it. Either of these scenarios can happen easily. Of those polled who made an impulse purchase, 47% said most of the time they bought something for themselves. Don’t let your emotions dictate your spending.

5. Bring someone with you.

Do you have a sibling or friend who is willing to get in your face and tell you not to buy something? Bring ’em on your shopping trip! Tell them what you plan to buy and ask them to talk some sense into you if you start straying from the strategy. Sweeten the deal by offering to buy a latte for them afterward.

The excitement of impulse spending never lasts. Control the urge to fork over money when you discover a jacket on sale or a sweet offer from an online deal. That discipline buys you something priceless—peace of mind. That’s one purchase you’ll never regret!

An envelope system is the smart and easy way to manage your money and stop overspending. Buy one now that suits your lifestyle and get a free downloadable guide to go with it!

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